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.
On this page, you’ll learn about the following:
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 primary costs of maintaining an LLC in the District of Columbia is the annual report fee. Each year, LLCs in D.C. must file an annual report with the Department of Consumer and Regulatory Affairs (DCRA) and pay a filing fee. This report requires companies to provide updated information about the business, including details about members and managers. Failing to file the annual report on time can result in late fees or even administrative dissolution of the LLC.
In addition to the annual report fee, LLCs in D.C. are also required to pay a biennial report fee every two years. This fee is in addition to the annual filing and covers the cost of updating information with the DCRA on a less frequent basis. While these fees may seem minor compared to the overall expenses of running a business, they are necessary to maintain the LLC’s good standing in the eyes of the state.
LLCs in the District of Columbia are also subject to various taxes and fees, depending on the nature of the business and its activities. For example, LLCs with employees must register for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS) and file quarterly employment tax returns. Additionally, certain LLCs may be required to obtain business licenses or permits from the D.C. government, which can incur additional costs.
Another important cost to consider when maintaining an LLC in the District of Columbia is the cost of legal and accounting services. While not mandatory, many business owners choose to work with professionals to ensure compliance with state regulations and to handle any legal or financial issues that may arise. Attorneys and accountants can assist with drafting operating agreements, filing taxes, and responding to government inquiries, but their services come at a cost.
Overall, the cost of maintaining an LLC in the District of Columbia can vary depending on the size and complexity of the business. While some fees are fixed, such as the annual report fee, others may fluctuate based on the company’s activities and regulatory requirements. Business owners should carefully budget for these expenses to ensure they can remain compliant with state laws and avoid any unnecessary penalties or fines.
In conclusion, maintaining an LLC in the District of Columbia comes with various costs that business owners must take into account. From annual report fees to taxes and legal services, these expenses are necessary to keep the LLC in good standing and operating smoothly. By understanding and planning for these costs upfront, business owners can ensure that their LLC remains compliant and continues to thrive in the competitive D.C. marketplace.
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.