How to Start an LLC in District of Columbia (DC LLC 2024)

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 🙂

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 2024. 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 Corporations Division 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.

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.

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.

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.

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.

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.

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.

Applying for EIN in DC 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

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.

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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.

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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.

The LLC formation processing time in the District of Columbia is 2-4 weeks if filing offline (by mail). The process takes 5 business days if filed online. Check how long it takes to form an LLC to know about the tentative timelines.

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
Biennial Report	$300
Sales Tax	6%

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.

Tax Benefits

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.

Recycled Material

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.

Subscription-Based Businesses

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.

Legal Services

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

F.A.Qs

In Conclusion

When it comes to forming an LLC in D.C. it is much simpler than other business structures. In D.C., starting a small business or a start-up is easy because of its diverse resources. For small budget holders, forming a limited liability company is desirable. The steps explained in this article are generic steps for starting a business in D.C.. It is recommended to consult an attorney or service provider.

In D.C., while establishing an LLC, make sure you check with the local bodies like the city council and district office to get updated with local regulations. We recommend ZenBusiness, one of the best LLC services that offers LLC formation at $0 (+ state filing fees). Hiring a professional service would make things easier. From having a registered agent to complying with the local and state government, everything will be smoother than doing things all by yourself.