LLC in DC: Forming LLC in District Columbia is a bit different from other states. Unlike in any other state, If you are to form a multi-member LLC in DC, it will be considered the same as single-member LLC, so the steps to form both a single and multi-member LLC are also the same. let’s have a look at how you can successfully form your LLC in DC with these simple 7 steps.
An LLC in Washington D.C. basically links an organization’s limited liability with the liability and shortage of formalities. All these are offered by any sole proprietorship or an association.
We would recommend setting up an LLC in DC for any entrepreneur whose objective is to restrict liability for professional lawsuits and debts.
Not from Washington D.C.? Learn to form an LLC in any other State.
Tip of the Day: Washington D.C. LLC formation by yourself is mostly hectic and time taking. Hiring a reliable LLC formation service is not only a good choice, but saves you from overspending. Therefore we recommend you to:
Introduction:
Now, what is an LLC? A Limited Liability Company (LLC) unites the best of partnerships, sole ownerships, and corporations into one organizational entity providing full protection to liabilities, tax incentives or flexible business structures, etc.
It only costs almost 220 USD to initiate an LLC in Washington D.C..
All you’ve to do is to submit a certificate of your new business with the State Minister. An entrepreneur can either apply online, drop a mail, or visit the office in person to build a new LLC.
In this article, we will explain the LLC formation method in Washington D.C.. So let’s get started!
Outlining the LLC Formation Process
(7 Steps)
- Pick a Name for Your Washington D.C. LLC
- Find a Registered Agent for Your LLC
- Submit the Articles of Organization
- Establish an LLC Operating Agreement
- Follow the Tax and Other Administrative Requirements
- Fulfill Your State Tax Commitments
- Submit Annual Reports
Next, we are going to discuss the steps one by one to make to clear for all of the viewers and new entrepreneurs.
#1: Pick an LLC Name
The first and foremost part of building an LLC in DC is to pick up the right company name. Try to select a name that corresponds to Washington D.C. standards and is conveniently accessed by prospective customers.
What Instructions Should Be Followed While Naming an LLC?
- Every business owner should include “Limited Liability Company” to his new company or the abbreviation of it, LLC.
- Avoid using the words that can mystify your LLC name with the government agencies, such as State Organizations, Treasury, FBI, etc.
- Make sure to choose a unique name from other corporations, Washington D.C. LLCs, or limited liability parties.
- If you want to fit in a few confined words like an attorney, bank, university, etc., it might demand hiring a licensed lawyer or doctor for additional documentation.
The next step is to verify access to your chosen name in Washington D.C. Make sure if the name is still available or utilized by another entity.
You can visit Washington D.C.’s official state website to check on Business Registry Search. Furthermore, one can also generate a name through an LLC Name Generator online.
#2: Find a Registered Agent
Another vital step is to find a reliable Registered Agent to form an LLC in DC.
There are some limitations when choosing a registered agent in Washington D.C. The person should be a Washington D.C inhabitant who would be able to perform your business tasks from within the state.
You may also nominate yourself for the official documentation, but we personally recommend going for ZenBusiness. Besides offering a free first year of their registered agent services, the company will form your Washington D.C LLC only for $49 plus the state filing fee.
#3 File an Articles of Organization
During the formation of an LLC in DC, it’s crucial to submit your articles of organization linked with the Secretary of its State. A general article should cover up the following:
- Name and web address of your LLC’s planner
- The official name and address of Washington D.C LLC
- Details of your LLCs registered entity
- Details of your company members
- The official LLCs emails
- Entrepreneur’s signature
DIY Cost of Forming an LLC in District of Columbia ($220-$320)
The main LLC formation cost through the DIY route is the state filing fee of your Article of Organization. Currently, the District of Columbia charges you $220 online or by mail and $320 in person. These fees may be subjected to revision by the state.
#4: Establish an LLC Operating Agreement
An LLC operating agreement is constitutional paperwork that sketches the rules and regulations for a new company and also outlines the entrepreneur’s operating procedures to form a new LLC in DC.
Although not necessary, creating an operating agreement will benefit a company for sure.
This legal agreement guarantees all entrepreneurs to remain on the same boat, which ultimately lessens further business clashes.
#5: Follow the Similar Tax and Other Administrative Requirements
A few extra taxes and other administrative requirements might implement to your new LLC that includes:
Employer Identification Number – It is just like a Social Security Number, so if your company has more than one employee, you can get this EIN by paying extra. This nine-digit code will check into your tax issues and assist you in creating a new bank account, hiring new staff, etc. One can submit an online form at the IRS website to get an EIN for his company.
Official Licenses – Sometimes, your new LLC in Washington D.C might demand the official state licenses or other approvals, depending on the business type and its location. So, there are Economic Resource Units in Washington D.C leading you to authorities to guarantee proper licensing, registration, or permissions within the state.
#6: Fulfill Your State Tax Commitments
After getting a Washington D.C LLC, there are several responsibilities on a business entity that should be fulfilled. For instance, in a few cases, one has to check with the Washington D.C Department of Revenue (DCDOR) for selling products or assembling sales tax, etc.
For your convenience, DCDOR has an online platform, so you can register yourself from there through Business Taxes Registration Application. For more information, you can review detailed LLC articles on our website.
#7: Responsibly Submit Annual Reports
All limited liability companies in District Columbia, after their creation, are obliged to submit their annual (or biennial) reports. For more details on how to file an annual report or state-specific fee, read our article on LLC annual (or biennial) report.
Due Date: In District Columbia, you need to submit your Washington D.C. LLC biennial reports with $300 due by April 1 every second year.
Late Filings: In case you are unable to submit the Washington D.C. LLC biennial reports after the due date, you have to pay a $100 late fee. Failure to file a biennial report may result in the dissolution of your LLC in District Columbia.
Additional Information on Forming an LLC in District of Columbia
Register a Foreign LLC in District of Columbia
Entrepreneurs often form an LLC in a state other than the state of their residence to have some tax benefits and reduce LLC formation cost. Moreover, some business owners have their LLC franchises in multiple states. In such cases, they register their LLCs or franchises as foreign LLC in all states where they operate their business.
If you have an LLC in any other state and wish to open a franchise in the District of Columbia or want to form an LLC in the District of Columbia while you are a nonresident of the District of Columbia, you can form a foreign LLC online or download a foreign LLC application and mail it to:
Mailing Address
Department of Consumer and Regulatory Affairs,
Corporations Division,
PO Box 92300,
Washington, DC 20090.
District of Columbia Foreign LLC Filing Fee: ($220 – nonrefundable)
Hiring Employees in the District of Columbia
To run your business in a compliant manner, you have to follow the Washington D.C. Directory of New Hires guidelines while hiring employees for your existing business or new LLC. Some of the major points are stated below;
- Verify the employment status of individuals, such as whether the potential employee is a US resident; if not then are they permitted to work in the US, are they of a certain age to work for that particular job, etc
- Report new hiring to the state
- File quarterly reports on wages and taxes
- Report job refusal
Acquire Relevant Business Licenses and Permits to Operate in the District of Columbia
To successfully operate your LLC in the District of Columbia, you must acquire permits and license to comply with federal, state, and local government regulations. For instance, to operate a pest control business, you need to acquire a license from the department of agriculture and fulfill the state’s certification requirement, etc
The requirements and fees for business licenses and permits vary from state to state. Work thoroughly on prerequisites and compliance-related information for your business before officially filing your LLC with the state. However, the following resources may help;
- Hire a reliable, professional service like ZenBusiness to do a license and permit search for you. Many LLC formation services do this as a part of their LLC formation packages.
- Visit the US Small Business Administration (SBA) guide for federal license and permit information.
- DC Business Center website helps you learn the state’s license requirements.
- Visit your local county clerk’s office and seek information about local licenses and permits.
Obtaining a Certificate of Good Standing in the District of Columbia ($50- nonrefundable)
A Certificate of Good Standing, aka Certificate of Compliance in the District of Columbia, verifies that your LLC has been legally formed and is being operated and maintained in a compliant fashion. This document is needed for;
- Filing your business as a foreign LLC
- Seeking fundings and investments from banks or other people
- Acquiring or renewing relevant business licenses or permits
You can request the certificate of good standing online from the District of Columbia Secretary of State’s official website.
Dissolve Your LLC in the District of Columbia ($220 – nonrefundable)
In case you no longer wish to continue your LLC in the District of Columbia at any point in the future, you must officially dissolve it; otherwise, you may face tax liabilities, penalties, and legal troubles. In the District of Columbia, you can dissolve your LLC by following 3 basic steps:
- Comply with your LLC operating agreement
- Close all business tax accounts
- You can hire LLC services to make the LLC dissolution process seamless and easy for you. If you want to file yourself, follow the Washington D.C LLC Dissolution guide.
Final Verdict
We hope this article has helped you in every aspect of forming an LLC in the District of Columbia. If you still have any questions or confusion, please ask in the comment section
Alfie Wilson, Esq., is a legal content writer with expertise in business formation, criminal law, veterans disability, family law, DUI law, personal injury, animal welfare, and legal writing. He holds a J.D. from Emory University School of Law and has experience in appellate advocacy and regulatory matters. Alfie’s passion lies in breaking down complex legal topics for a non-lawyer audience. He currently writes for law firms and non-profits on various issues and resides in Arlington, Virginia.