Start an LLC in Washington, DC

Ready to fulfill the dream of owning your own business, but don’t know how to make the process of starting an LLC in Washington D.C. comfortable and easy? This article is just what you need!

For your convenience, we’ve broken down the formation process into 7 simple steps. By following them, you will be able to quickly start an LLC that meets all of the state’s requirements and get to work, making your first deals.

Step 1: Name Your LLC

One of the key decisions you should make to create an llc is choosing the right name. A good LLC name should be creative and meet the requirements for a Washington DC business entity name, such as:

  • Identifier: the name should have words or abbreviations that specifically identify the business as an LLC: “limited liability company,” “limited liability co,” “LLC,” etc;
  • Availability: to have an LLC registered in Washington D.C., you need to find a unique business name, which is not used by other companies in the state. To do this, use Check Name Availability by doing a Name Search on the business database on the Secretary of State’s website;
  • No prohibited words: the name of a limited liability company should not hint any connection with the state. Moreover, to include words such as “attorney,” “bank,” and “university”, you will need appropriate licenses.

Once you are sure that a DC LLC name meets all of the above criteria, you can start the registration. To do this, you will have to submit the Articles of Organization to the Department of Consumer & Regulatory Affairs (DCRA). Once the company is approved, it will get exclusive rights to the name assigned automatically.

If you’re not ready to officially open yet but want to keep your chosen name, a Name Reservation is a good option. A reservation in Washington D.C. lasts 120 days.

Step 2: Choose a Registered Agent

According to the law, to create your Washington D.C. LLC, you will need a Registered Agent. His main responsibility is maintaining legal communications between the business and the state.

Any person or entity who meets the following requirements can become an LLC registered agent:

  • Being a resident;
  • Having a physical address and a post office box;
  • Availability at the registered office during business hours.

The range of people who may become registered agents in the District of Columbia is quite broad:

Once you have selected the right registered agent and obtained their approval, enter their personal information in the Articles of Organization. Then send the documents to the District of Columbia Department of Consumer and Regulatory Affairs to officially launch an LLC.

Step 3: File the Formation Documents with the State

The basic document required to create a limited liability company and commence business is Articles of Organization for Domestic Limited Liability Company DLC-1. The form is publicly available on the Secretary of State’s website. Usually,  the following information is required:

  • LLC name;
  • A reason why the LLC was formed (This can be a general statement);
  • An LLC’s duration;
  • The street address of the LLC’s principal office;
  • The name and address of your registered agent;
  • Management structure;
  • The effective date of the Articles of Organization;
  • Signatures of the persons establishing the LLC.

You can submit documents to the District of Columbia Corporations Division for approval in one of the following ways:

Online

Filing online is the fastest and most affordable option. Simply visit the Department of Consumer and Regulatory Affairs website and fill the required form. The mandatory filing fee is $220, and it can be paid by credit or debit card.

By mail

If you prefer paper documents, you can mail your completed Articles of Organization and a check for payment of the state fee to:

Department of Consumer and Regulatory Affairs
Corporations Division
PO Box 92300
Washington, DC 20090

In-person

In case you live in or plan to travel to Washington, you can deliver the documents to the following address:

Department of Consumer & Regulatory Affairs
1100 4th Street SW
Washington, DC 20024

Please note that this option will require an additional $100 for expedited handling.

Once officially registered, the state will require a Washington D.C. Certificate of Formation needed for:

  • EIN;
  • Licenses;
  • A commercial bank account, etc.

Step 4: Create an Operating Agreement

Although according to the District of Columbia business law, creating an operating agreement is not mandatory for conducting business, it is highly advisable. 

An operating agreement is an internal LLC document that states the basic principles of its operation and the rights and obligations of its participants. It is one of the LLC’s most important internal documents, and usually contains such key points:

  • Duration of the LLC;
  • Distribution LLC’s assets;
  • The procedure for admitting and outgoing members;
  • The way profits and losses will be divided;
  • Structure and method of management;
  • Voting procedure;
  • Members’ responsibilities and compensations;
  • Company closing procedure etc.

As it’s not a mandatory document, there is no official form. You can ask an attorney to draft an Operating Agreement or write one yourself using free Internet templates.

Step 5: Get an EIN

Once you register an LLC, in most cases you will need to obtain an Employer Identification Number (EIN). Sometimes, it is also called a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), depending on the state.

An EIN is a unique nine-digit code that the IRS assigns to a company for quick identification.

You will need an EIN if you plan to:

  • Hire employees;
  • Pay taxes;
  • Open a business bank account, etc.

You can get an EIN using one of these three options:

Online

Visit the IRS website, fill out and file IRS Form SS-4, and then you can start using your EIN right away. 

There is no state fee.

By Mail

Download Form SS-4 to your computer, fill it out and print it. Mail your Form SS-4 to:

Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax 

You may fax the completed paperwork to: 

(855) 641-6935.

Step 6: Taxes and Licensing 

Even though LLC formation in the District of Columbia is done by filing Articles of Organization, in most cases, it is not enough. To run a business legally, many LLCs in DC have to obtain applicable licenses and permits. Their number and type depend on the location and the business.

The most common type is a basic business license (BBL). You can get it to conduct business for a period of 2 years.

To learn more about what you need to comply with federal, state, and local government regulations, choose the following options:

Also, in addition to licenses and permits, you need to remember about D.C. LLC Tax Filing Requirements. You need to follow them to maintain good standing.

Depending on the specifics of your business, it may be subject to taxes such as:

  • Sales and Use Tax: a company should register with the Washington D.C. Office of Tax and Revenue website to obtain a seller’s permit.
  • Employer Taxes: if you hire employees, you have to register with the Department of Employment Services to pay Unemployment Insurance Tax. You will also need to contact the Washington D.C. Office of Tax and Revenues to pay Employee Withholding Tax;
  • Franchise Tax: all state-registered LLCs have to pay an annual franchise tax. Its amount depends on the company’s income. Multi-member LLCs with income of $12,000 or less should file Form D-65. For those whose income exceeds $12,000, there is a Form D-30.

Step 7: LLC Biennial Report

Unlike some other states, Washington D.C. requires LLCs to report to the Superintendent of Corporations of DCRA once every two years. 

The Biennial Report generally contains the following information about the company:

  • The LLC’s name;
  • The LLC’s principal office address;
  • A summary of the LLC’s business operations in the District of Columbia;
  • The name and address of registered agent;
  • The names and addresses of managers.

Each DC LLC should submit its first Biennial Report by April 1 of the year following the LLC formation year and then, regularly every 2 years. A $300 processing fee should be paid to the Department of Consumer and Regulatory Affairs. Please mind that there is no refund if there are mistakes in the document.

You should also remember that a company can get a $100 penalty if it fails to file another Biennial Report by April 1. If the violation is not corrected within 60 days, the state has the right to subject the LLC to involuntary dissolution.

Online 

Filing a Biennial Report Online is a quick and easy process. You can do it with Washington DC CorpOnline by paying the required fee by card.

In-person 

If for some reason, you don’t want to file the documents online, download a form to your computer, fill it out, and deliver it to:

Business License Center
1100 4th St., SW.
2nd Floor
Washington, DC 20024

Please don’t forget that personal delivery will require an extra expedited fee of $100 that can be paid by card or check.

Conclusion

To summarize, launching an LLC in Washington D.C. is pretty easy, as long as you know how to obtain, fill out, and file all the necessary documents. 

If you have doubts or just don’t like paperwork, consider hiring an LLC formation service that will take care of it on your behalf. 

A professional online company will help you create your DC LLC quickly and efficiently, meeting all the state requirements. In addition, most can open a Limited Liability Company in Washington D.C. and make its subsequent operation more comfortable. For example, keep an LLC compliant by reminding you in advance of current reporting deadlines so that your business’s reputation is always great.