Fact Checked by Editorial Staff
Perhaps you are hoping to form an LLC in DC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in DC.
DC LLC Cost of Filing
Here are the costs involved in forming an LLC in DC.
Cost of Filing Formation Certificates
The DC Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the DC Secretary of State.
DC Domestic LLC
- Online Filing costs $220.
- Expedited Filing Fee $320
- By mail: Fill out the application form, and send it to Department of Consumer and Regulatory Affairs Corporations Division PO Box 92300 Washington, DC 20090. costs $320
- In-person filing: Fill out the application form, and send it to the Department of Consumer & Regulatory Affairs, 1100 4th St. SW, Washington, DC 20024. costs $320.
- Biennial Report filing costs $300.00. Late filing of the report bears a penalty of $100.00.
DC Foreign LLC
- Online Filing Costs $220
- By mail: Fill out the application form, and send it to the Department of Consumer and Regulatory Affairs Corporations Division PO Box 92300 Washington, DC 20090, costs $220.
- Biennial Report filing costs $300.00. Late filing of the report bears a penalty of $100.00.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
DC LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in DC, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
LLC Service | Our Rating & Pricing | Top Features | Learn More |
#1 TOP PICK  | $0 + State Fees |
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 | $0 + State Fees |
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Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the DC Department of Revenue for regulatory boards or agencies requiring licensing.
Business taxes
Apart from the filing of the Annual Report, the DC LLCs are also subject to state tax filing obligations. Though the taxes vary from place to place. There are different types of taxes imposed on entities operating their businesses in DC, such as federal income tax, payroll tax, sales tax, etc.
Income Tax
The income tax in the State varies between 4%-8.95% depending on the amount of income earned. If your business sells products into the State, it shall also attract sales tax at the rate of 6%.
Self-Employment Tax
DC Federal Self-Employment Tax is imposed on the business members who take profits out of the LLC. The current tax rate is 15.3%.
Federal Income Tax
DC Federal Income Tax is paid only on the income that you extract from the profits of your business, reducing the allowances and other deductions. The bracket for this is the same as the State Income Tax.
Withholding Tax
If you employ any person in your business, you must withhold the payroll tax from your employees at the rate of 7.65% of their taxable salary.
Other Mandatory Costs
DC LLC Name: It costs $50 to reserve the name of your LLC for 60 days.
Home Occupation Permit: The application for a Certificate of Occupancy for a DC LLC costs $72.60.
Business License: Obtaining Basic Business License costs around $200 for DC LLCs. Assessment of the licenses is done every two years and the licenses can be renewed at a cost of $70 with $25 for each endorsement. The DCRA Government website provides updated costs information to set up an LLC in DC.
Comparison with the Neighbouring States
Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to DC, check out the table below:
| States | DC | Maryland | Pennsylvania | Delaware | West Virginia |
| Online filing fee | $220 | $100 (Mail) $150 (online or in-person) | $125 | $90 | $100 |
| LLC Annual fee | $300 (Biennial) | $300 | $520 times the number of members of the LLC | $300 | $25 |
| Name reservation fee | $50 | $25 | $70 | $75 | $15 |
| Sales Tax | 6% | 6% | 6% | No sales tax | 6% |
The Department of Consumer and Regulatory Affairs offers several programs for the District of Columbia to support businesses. Those who want to start an LLC in DC can explore different sectors and trade as per their preferences. The major sectors contributing to the GDP of DC are retail trade, wholesale trade, construction, and utilities.
Other Costs
- DC Name Reservation: $50 by mail
- Doing Business As (DBA): $55 for online filing or by mail
- Certified Document Copies: $50 per document.
- Certificate of Good Standing: $50
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of DC LLC: $220
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in District of Columbia
To maintain an LLC in District of Columbia you will need to pay a biennial fee of $300 along with sales tax at 6%, income tax (4-8.95%) and federal taxes.
One of the initial costs of forming an LLC in the District of Columbia is the filing fee to register the business with the Department of Consumer and Regulatory Affairs (DCRA). This fee is required to officially establish the LLC and varies depending on the type of entity and other factors.
In addition to the filing fee, LLCs are also required to pay an annual report fee to the DCRA. This fee is necessary to update the state on the latest information about the business, such as changes in ownership or address. Failing to file the annual report on time can result in penalties or even the dissolution of the LLC.
LLCs in the District of Columbia are also subject to a minimum franchise tax, which is based on the company’s assets or gross revenue. This tax is calculated and paid annually to the DC Office of Tax and Revenue. While the minimum franchise tax might not be a significant expense for some LLCs, it is still an additional cost to consider when budgeting for the business.
Another ongoing expense for LLCs in the District of Columbia is the registered agent fee. Registered agents are responsible for receiving important legal documents on behalf of the LLC and ensuring they are delivered promptly. While some business owners choose to serve as their own registered agent, hiring a professional registered agent service can be beneficial for those who prefer to have a third party handle this responsibility.
Beyond these specific costs, LLCs in the District of Columbia may also incur other expenses related to maintaining compliance with state regulations. This can include obtaining business licenses, permits, or certifications, which may be required for certain types of businesses or industries.
While the costs of maintaining an LLC in the District of Columbia are necessary for ongoing operations, it is important for business owners to consider these expenses when budgeting and planning for the future. By staying informed about the financial obligations associated with running an LLC, owners can avoid unexpected fees or penalties and ensure the continued success of their business.
Overall, the costs of maintaining an LLC in the District of Columbia can vary depending on various factors, but it is essential for business owners to understand and budget for these expenses to ensure their company remains in good standing with the state. By carefully managing these costs and staying compliant with state regulations, LLC owners can focus on running and growing their business without any unnecessary financial burdens.
In Conclusion
The cost of D.C. is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.