How to Start an LLC in Washington D.C.: If you’re looking to start an LLC in D.C., you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC at a very low cost in District of Columbia. Though, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost almost negligible.
On this page, You’ll find all the steps that must be taken to ensure that your District of Columbia LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Washington D.C.
- After Starting Your Washington D.C. LLC
- Washington D.C. Foreign LLC
- District of Columbia LLC Formation Review
How to Start an LLC in Washington D.C.
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC in D.C., you must file your Certificate of Formation with the State and pay a filing fee of $220. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in District of Columbia. Below mentioned all 5 steps that explain everything you need to do to start a D.C. LLC in 2023. Let’s get started! You can always hire a professional LLC formation service in District of Columbia to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Washington D.C. LLC
The first step while forming an LLC in DC is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Washington D.C. LLC Naming Guidelines
There are a few specific requirements all the LLCs in Washington D.C. have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Washington D.C. can have the same name. ZenBusiness offers unlimited business name searches without any hassle.
- “Limited Liability Company”, “LLC”, “L.L.C.”, “LC”, “L.C.”, and “Limited Company” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Washington D.C. State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|D.C. Business Entity Search – Online Name Search|
Name Reservation Form – PDF
D.C. LLC Name Search Guide – Instructions
Name Availability Standards – Guidelines
|Department of Consumer and Regulatory Affairs|
P.O. Box 92300
Washington D.C. 20090
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided on, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $50 to reserve your name with the Washington D.C. Secretary of State. For more information read our guide on Washington D.C. LLC Name Search.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Washington D.C. Secretary of State by submitting the Trade Name Certificate by mail, or you can file it online along with the filing fee of $55.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
ZenBusiness – ($0 for LLC Formation)
Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Washington D.C.
The second step to forming an LLC in D.C. is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Washington D.C. Hence, hiring a competent Washington D.C. Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of D.C. or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0), you also get registered agent service and other services at a very reasonable price.
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in D.C. Some LLC formation services also offer standalone Washington D.C. registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
A person above 18 years of age and has a physical address in the state of Washington D.C. can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent if you are a resident of the state of Washington D.C. and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Washington D.C.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in D.C., in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Step 3: File Articles of Organization in Washington D.C.
The third and most important step in forming a Washington D.C. LLC is to file the Articles of Organization. This Washington D.C. Articles of Organization is a legal document that is required to register your business with the Washington D.C. Secretary of State. It costs $220 (online and by mail filing) and $320 (In-person drop-off) to file your formation certificate in Washington D.C.
The Certificate of Formation includes details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in D.C. LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Washington D.C., you must register as a Washington D.C. Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the Home Page. If you have subscribed to their official portal then Sign-in with your credentials. If you are not a subscriber yet, then you need to sign-up. Click the button below to sign-up on the portal. Read more about the Washington D.C. Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Washington D.C. LLC registration, then you can download form DLC-1. Read the form thoroughly, fill it out, and send it to the address mentioned below.
Mailing Address: Department of Consumer and Regulatory Affairs
P.O. Box 92300
Washington, D.C. 20090
Department of Consumer & Regulatory Affairs
1100 4th St. SW
Washington, D.C. 20024
Processing Time: Normally, it takes around 3 weeks (approx) to get your LLC formed in Washington D.C. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Every LLC owner has to pay the filing fees to register their business in Washington D.C. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Washington D.C.
Step 4: Create Your Washington D.C. LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Washington D.C. LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Washington D.C. LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Washington D.C.
The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business.
EIN is needed when the LLC hires employees. Hiring employees in Washington D.C. LLC requires following specific rules and regulations. On the other side, EIN for Washington D.C. foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulations, you are now done with all the necessary steps to form your Limited Liability Company in Washington D.C. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Washington D.C. LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account.
- File Washington D.C. business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees.
- File a Washington D.C. LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Washington D.C. LLC
LLCs can be formed by spending very less price. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Washington D.C. must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in D.C.,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$50 for 120 days|
|Certificate of Formation Fee||$220|
In Washington, LLC name reservation is mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then a Name Reservation is needed. It can be registered by paying $50. Your LLC name will be reserved for 120 days. In some states, Name Reservation is not mandatory. Read more in our guide on LLC cost in Washington D.C.
Washington D.C. Foreign LLC
If you are interested in forming a Foreign LLC in Wahington D.C. then you need to file the Certificate of Foreign LLC to the Washington D.C. Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Washington D.C. SOS to form your foreign LLC in D.C. To know more in detail, check out our guide on Washington D.C. Foreign LLC.
Reasons to Start an LLC in the District of Columbia
Starting an LLC or any type of business in the District of Columbia, also known as Washington D.C., will be profitable for small businesses. With a capital investment of $3.36 billion, Washington D.C. has become one of the strongest economies in the United States. Being the capital city of the United States, D.C. offers many benefits to the businesses while they start their LLCs in Washington, D.C.
There are a series of tax benefits provided by the state government to the LLCs and new businesses. Read more on the D.C. classification of LLC tax. Following are the tax incentives one can expect –
- Job and employment opportunity benefit of $15,000 per year
- Tax benefits up to 10-years for using personal property to operate your LLCs in the state.
- First 5-years no corporate franchise tax is to be paid. From the 6th year, it would be a 6% annual rate.
- No tax on the real property for up to 5 years
Main Street Programs
In Washington D.C., there are some comprehensive programs which are called Main Street Programs. Under this program, traditional businesses are encouraged to revitalize again. Any new LLC registered in the state can enjoy these programs’ benefits if they are involved in D.C.’s traditional businesses. Georgetown, Eastern Market, North Capitol are some of the main street programs.
Loans and Grants for Small Businesses
Another reason for starting an LLC in Washington D.C. is the loans and grants the state government provided to the small businesses. Some of the important loans and grants programs are as follows –
- On the Job Training Program – Under this program, up to 75% of the total wage paid to the trainees can be reimbursed. Up to 1040 hours can be reimbursed under this program. Any new LLC can register under this OJT program if they have a size of a minimum of 100 employees.
- Anacostia Economic Development Corporation Program – The program, initiated by the AEDC, is administered for small businesses. Under this program, if the LLCs are involved in facade improvement projects, they can get up to 75% of the project’s total capital cost.
- The Community Development Financial Institute Program – This program is designed to improve financial institutions and structures in the state. The government has already spent $2.3 billion on this program. They provide loans and grants to small businesses to improve the financial structure of the state.
Best Businesses in the District of Columbia
If you want to form an LLC in the District Of Columbia, then you possibly have a business idea in your mind. If not, then you should look at the best options available below.
If you look around in the District of Columbia’s industries, many people are fond of using showcases and furniture made of old and recycled materials. If you think you have some extra innovative skills, you can enter the recycled materials business and make products out of waste. If people start liking what you are offering, you can charge according to your skillset and maybe more.
Environmental Friendly Product Business
District of Columbia’s residents keep extra care of the environment. Their love for the environment can be easily seen through the products they are using. That is why there is a huge scope of starting the business of environmentally friendly products. All you need to do is find the best products in the market and start the business.
The next business that is rising in the District of Columbia is subscription-related businesses. Every month there is a growth of 1% in subscription-based businesses. That is, there is a never-ending demand for subscription-based businesses. The subscription may be related to anything like food, accessories, etc. You have to select the niche in which you have the maximum interest and earn the maximum profit.
The next business that is gaining massive popularity in the District of Columbia is legal services. It is the capital state of the United Nations of America due to which the legal work in the state is at its peak and also the demand for a reliable legal services business. That is why to enter the business; you need to offer value to your legal clients and see how your business booms.
Here are businesses with some low investment
- Breweries business
- Nursery Farms
- Online advertisement business
District of Columbia LLC Formation Review
Time needed: 5 minutes
Just to recap, here are the easy steps again when forming an LLC in D.C. Click on the steps in this list to read the full detail.
- Name your Washington D.C. LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Washington D.C., it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in D.C. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Washington D.C. but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in District of Columbia
When filing via mail, Washington DC LLC may take upto 3-4 weeks. While online filing procedure may take 5-7 business days. For speeding up the process, you can pay an additional fee to the state.
The first step in forming an LLC in the District of Columbia is choosing a name for your business entity. It is important to select a unique name that has not been taken by another organization. Conducting a name search is highly recommended to ensure exclusivity and avoid misleading similarities with existing businesses. This initial phase is crucial as it forms the foundation of your company’s identity and brand.
After securing a unique name, the next step is to file the necessary formation documents with the appropriate government authorities. In the District of Columbia, this requires submitting the Articles of Organization to the Department of Consumer and Regulatory Affairs (DCRA). The articles typically include essential details such as the business name, address, purpose, the registered agent’s information, and other additional requirements as prescribed by the state. Once these documents are reviewed and approved by the DCRA, the LLC is officially formed.
It is crucial to appoint a registered agent, who acts as a point of contact between the LLC and the government. An eligible registered agent can either be an individual residing in the District of Columbia or a registered business entity with a physical address. Their role is to receive legal and official correspondence on behalf of the LLC, ensuring timely communication with the state authorities. Appointing a reliable and responsible registered agent is a mandatory legal requirement for LLC formation, and careful consideration should be exercised when making this choice.
Another important consideration is the Employer Identification Number (EIN) from the Internal Revenue Service (IRS) since most LLCs need this identifier for tax purposes and other legal obligations. This number is commonly used when filing federal tax returns, opening business bank accounts, hiring employees, and conducting certain financial transactions. Obtaining an EIN is a straightforward process, and it can often be obtained immediately through the IRS website.
The duration of forming an LLC in the District of Columbia primarily depends on the accuracy of the submitted documents, completeness of information, and the volume of applications at the time of submission. Generally, if all requirements and paperwork are complete and in order, LLC formation in the district can be completed within a few days. Potential business owners are advised to follow the guidelines closely to ensure a swift and smooth process.
In conclusion, forming an LLC in the District of Columbia can be a reasonably efficient and straightforward process. Provided that legal requirements are met and necessary information is accurately included in the documents, entrepreneurs can establish their businesses without unnecessary hurdles or delays. Seeking professional advice and utilizing the available online resources can further simplify and expedite this process, enabling aspiring business owners to focus on developing their ventures without undue administrative burdens.
If you are a resident of Washington D.C., then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $220 (domestic LLC) and $220 (foreign LLC), LLC costs in Washington D.C. include $300 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
It takes 5-7 business days to get an LLC in D.C. if you file it online. For the mail filing, it takes 3 weeks to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands which has impeccable turnaround time.
Every year all the LLCs have to submit a Biennial Report instead of Annual Report and pay $300 to the Washington D.C. Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Washington D.C. Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in District of Columbia at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.