How To Form an LLC in Washington D.C. in 7 Steps
When starting a new limited liability company in the District of Columbia you must choose a name for your LLC, appoint a registered agent, file articles of organization, draft an operating agreement, get an EIN from the IRS and set up business and tax accounts.
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When starting a new business, one of the first things you should decide is which business structure best suits your company. LLCs are a popular choice for small businesses as they provide personal liability protection, pass-through taxation, and simple filing requirements.
You can create a Washington D.C. LLC yourself by following the steps below.
7 Steps to Form an LLC in the District of Columbia
Name Your LLC
To make your business stand out from the competition, you should choose a memorable and unique LLC name. Under the law of the District of Columbia (D.C.), your new LLC name must:
- Be unique (different from all other District of Columbia business entity names) under D.C. Code §29-103.01
- Make it clear that your company is an LLC (your LLC name must contain the words “Limited liability company”, “Limited Company”, “L.L.C.”, “LLC”, “L.C.”, or “LC”) D.C. Code §29-103.02
- Not include restricted language (like words that would confuse it with a government agency or financial institution)
You can conduct a business name search on CorpOnline, the District of Columbia’s website for businesses, to see if your LLC’s name is available. If you have a name in mind but aren’t quite ready to register your LLC, you can file a Name Reservation Registration & Transfer Form with the Department of Licensing and Consumer Protection to reserve your business name for 120 days. The filing fee is $50.
Get a Registered Agent
In the District of Columbia, all LLCs must have a registered agent under D.C. Code §29-104.01. A registered agent is an individual or entity that agrees to accept legal documents on behalf of your business. This includes service of process if someone sues your business.
Your registered agent needs to be a person or entity with a physical street address (not a P.O. Box) within Washington D.C. They should be available at this address during standard business hours. You can also consider using a registered agent service to ensure you receive legal notices and critical mail.
File Articles of Organization
To formally create your District of Columbia LLC, you need to file articles of organization with the Superintendent of Corporations in the Department of Licensing and Consumer Protection Division (DLCP). Under D.C. Code §29-802.01, your LLC articles of organization require the following:
- Name of LLC
- Business address of LLC’s principal office
- Registered agent’s name and address
- Statement that LLC has at least one member
- Effective date of articles
- Members’ names and ownership percentages
- Organizer’s name, address, signature, and date
- $99 state fee
You can file online or use Form DLC-1 to file by mail or in person as a walk-in customer. Online filings must be paid by credit card. There’s an additional $100 expedited fee for one business day service and a $50 expedited fee for three business days.
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Draft an Operating Agreement
Although it’s not legally required in the District of Columbia, having an LLC operating agreement creates a contract between you and your LLC members regarding important business operations and provides clarity in the event there is an issue. It can include:
- Member rights and responsibilities
- Ownership percentages
- Voting procedures
- Management style
- Procedures for adding or removing members
- Any other agreements among members
An LLC operating agreement promotes more organized operations in your company. It establishes clear expectations for LLC members, preventing confusion down the line.
Get an EIN
Applying for an Employer Identification Number (EIN) is quick and easy. You can get an EIN through the Internal Revenue Service (IRS) by fax, mail, or online at no cost. It’s like a Social Security Number but assigned to businesses for federal tax purposes. You can learn more about your federal business tax obligations by visiting the IRS Small Business and Self-Employed Tax Center.
Set Up Business and Tax Accounts
Depending on the type of business your LLC conducts, you may be subject to certain federal and state tax laws. You should contact the IRS or visit their website to find out what federal taxes apply to your business. You may also need to register your LLC with the Office of Tax and Revenue to file, report, and pay state taxes.
Your LLC is required to obtain a business license according to the kind of business activity it conducts. You should apply for a basic business license (BBL) with DLCP’s Business Licensing Division after you register your LLC with the Corporations Division and the Office of Tax and Revenue. Visit the DLCP’s business licenses page to determine which type of licenses you will need for your LLC.
Check for Additional Federal or State Requirements
Check state and federal websites to determine if there are any specific rules for your business. For example, some LLCs may have to file a Beneficial Ownership Information Report (BOIR) with FinCEN. Under current law, LLCs created in the United States are “domestic reporting companies” and are exempt from the BOIR requirement.
However, laws may change, so stay up to date with state and federal requirements.
Business and Tax Requirements in the District of Columbia
There may be jurisdictional taxes that apply to your LLC. You should familiarize yourself with D.C.’s tax requirements for active businesses.
State Business Tax
Unincorporated businesses in the District of Columbia may be subject to the business franchise tax in some situations. Unless an exemption applies, an LLC could be required to report income separately from the business owner and pay the unincorporated business franchise tax if certain requirements are met. For example, if an LLC’s net income on a combined reporting basis has gross receipts totaling more than $12,000. More information about the business franchise tax is on the Office of Tax and Revenue’s website.
State Employer Tax
If your LLC has employees, you must withhold the District of Columbia income taxes on wage payments made to Washington, D.C. residents who work in the District of Columbia. If you employ one or more employees for performing services in the District of Columbia, you have to contribute to the unemployment insurance fund by paying the unemployment tax. You also probably need workers’ compensation insurance coverage. You can learn more about employer requirements on D.C.’s Department of Employer Services (DOES) website.
Sales and Use Taxes
If your LLC sells or rents tangible personal property or provides certain services to businesses or individuals in the District of Columbia, it’s subject to sales tax. Use tax is imposed at the same rate as the sales tax on purchases delivered outside of the District of Columbia and then brought into the District of Columbia for use, storage, or consumption. The general sales and use tax rate is 6%.
Business Licenses and Permits
LLCs in the District of Columbia are licensed according to the type of business they provide. You should apply for a basic business license to determine what kind of license your LLC requires. If you conduct your business out of your home in the District of Columbia, you should apply for a home occupation permit. If you operate out of an office located in the District of Columbia, you should apply for a certificate of occupancy. If your LLC offers a non-health professional service, you should also submit a license application to the Occupational and Professional Licensing Administration. A list of the applicable categories can be found on their website. License applications for health professionals are available on the D.C. Department of Health’s website.
Biennial Requirements in the District of Columbia
Instead of annual reports, to keep your business in good standing you need to submit biennial reports to the Corporations Division of the DLCP every two years. The fee for this report is $300. You should submit your first report in the calendar year after registering your LLC, which will be due by April 1st of that year. After your first report, you should file biennial reports every two years, before April 1st. To file your biennial report, you submit Form BRA-25 by mail, in person, or online.
FAQs About District of Columbia LLC Formation
To form an LLC in DC, you have to file articles of organization and pay the $99 filing fee.
After you file your articles of organization, you apply for a basic business license. This fee varies depending on your LLC’s business activities and accounts for the application, endorsement, license category, and 10% technology fee. You also have to file biennial reports every two years and pay a $300 fee.
- Single-member LLC: A single-member LLC is owned by one individual or entity that has total control of the business. Typically, a single-member LLC in the District of Columbia is a disregarded entity and taxed similarly to a sole proprietorship if owned by an individual. The owner reports the LLC’s income and expenses on their personal tax return.
- Multi-member LLC: A multi-member LLC is owned by two or more members or managers who share control of the business. In the District of Columbia, a multi-member LLC is member-managed unless the operating agreement provides it will be manager-managed. If it’s member-managed, each member has equal rights in the management and conduct of the LLC’s activities and affairs. If it’s manager-managed, any matter relating to the activities and affairs of the company is decided only by the managers.
- Professional LLC: If your LLC offers a professional service, you can form a professional LLC (PLLC). This requires a professional license to practice in the District of Columbia. Some of the professions in the District of Columbia include dentists, doctors, attorneys, engineers, architects, and accountants. There may be other professions that fall into this category too. All of a PLLC’s members must have the required license. The PLLC’s name must contain the abbreviation “PLLC", “P.L.L.C." or the full words “Professional Limited Liability Company".
- Series LLC: A Series LLC is a special type of LLC in which the members, managers, or interest holders have separate rights, powers, or duties with respect to specified property or obligations of the limited liability company. It’s generally a two-step process to form a series LLC in the District of Columbia. The organizer will answer “yes" to the series question on the articles of organization form. To designate the actual series, you also file the Certificate of Series Designation Form (Form DLC-4). The LLC has one or more series that are treated as a separate entity which limits the debts, obligations, and other liabilities to the assets of a particular series.
A certificate of organization is issued upon the successful filing of your LLC’s articles of organization. You may be required to present your certificate of organization to open a business bank account or secure business loans. You should save your LLC’s certificate from the initial filing in case you need it later. If you want a certified copy, you can make your request online or in-person at the Business License Center. The fee is $50.
A certificate of good standing shows your LLC is legally permitted to conduct business in DC and meets the regulatory requirements of the DLCP’s Corporations Division. This certificate is often needed to register as a foreign LLC in a different state or jurisdiction and obtain financing for your business. You can get a certificate of good standing from the Corporations Division in person or online. The fee is $50.
You need to file the articles of organization to form a new LLC in the District of Columbia. Although it’s not required, preparing an operating agreement to establish rules and guidelines for your LLC is typically also part of the formation process. You should register for federal taxes with the IRS. Additionally, you should register for state taxes and apply for a basic business license with the District of Columbia Office of Tax and Revenue. This will determine the specific type of business license your LLC needs based on its business activities. If the LLC is operated out of your home, apply for a home occupation permit. If you operate out of an office, apply for a certificate of occupancy instead. If your LLC engages in a professional service, apply for the appropriate professional license.
One of the main benefits for small business owners who choose LLCs is their limited liability protection. With limited liability protection, LLC owners are only responsible for business liabilities up to the amount they invested into the company and their personal assets are protected.
Another potential advantage of the LLC structure is the option of pass-through taxation. LLCs can pay taxes through their members’ personal income tax returns. This is similar to partnership taxation, which can be preferable to corporate taxation. Corporations can be subject to so-called double taxation. This occurs when the corporation pays taxes on its profits at the corporate level, and stockholders then pay individual taxes on their dividends.
You’re required to file biennial reports within the first year of registration by April 1 and every two years after to maintain an LLC in the District of Columbia. You should also be sure to renew any required business licenses for your LLC to operate. Ensure all taxes are filed and paid and comply with all regulations for businesses in the District of Columbia.
No. The certificate of organization is issued once you successfully file your LLC’s articles of organization (which are required to form and register your LLC in the District of Columbia). An operating agreement is optional and does not have to be submitted to the District of Columbia. It’s an internal business document for the owners, members, and managers.
Yes. If you’re doing business under a fictitious name that does not include the full legal name of all the owners or is different from your LLC’s registered name, you need to get a trade name in Washington, D.C. Submit the Trade Name Registration Form to the D.C. Department of Licensing and Consumer Affairs. Your LLC can only have one registered business name but can have as many trade names as you want.
Certain types of businesses may need federal licenses if your LLC engages in activities that the federal government regulates. This includes broadcasting, aviation, agriculture, and more. You can find a complete list of business activities that require federal licensing on the Small Business Administration (SBA) website. LLCs should apply for a basic business license through the D.C.’s Office of Tax and Revenue to determine the specific type of business license required for the LLC’s type of business. If you run your LLC out of your home, you’re required to have a home occupation permit. If your business has an office in the District of Columbia, you need to obtain a certificate of occupancy. LLCs that engage in a professional service should also have a professional license.
Yes. You can start an LLC online by filing articles of organization using the CorpOnline service. Create a profile, access the online services main page, and proceed with filing your articles of organization. Online filers are required to pay by credit card. If you prefer, you can use an LLC formation service to handle the filing of your LLC in the District of Columbia.
The Department of Licensing and Consumer Protection (DLCP) Business and Professional Licensing Administration Corporations Division serves as the Office of Corporate Registrar for the District of Columbia. The address is:
1100 4th Street SW
Washington, DC 20024
Some business owners recognize the benefits of designating a registered agent service for their service of process. The advantages include:
- Lawsuits are not served at your business or in front of your customers
- Privacy
- Ensure LLC compliance and keep your business in good standing
- Availability
A domestic limited liability company in the District of Columbia is an LLC formed with the Corporate Registrar of the District of Columbia. A domestic LLC is formed in the District of Columbia when it registers in its home jurisdiction of the District of Columbia and receives its certificate of organization.
If you want your LLC to conduct business outside of the District of Columbia, it must meet the requirements of that state or jurisdiction. Contact the business licensing authority in the appropriate state or province to find out the process. Typically, you’ll register as a foreign LLC, pay the filing fee, and provide proof of your LLC’s lawful status in its home state or jurisdiction, probably by providing your LLC’s certificate of good standing.
A business registered in another state or country must complete the Foreign Registration Statement Form to transact business in the District of Columbia. A certificate of good standing/existence dated within 90 days of filing and issued by the corporate registrar in the state or jurisdiction where the LLC was originally formed must also be submitted. The filing fee is $220.
To dissolve your LLC in the District of Columbia, you should close any business tax accounts with the D.C. Office of Tax and Revenue. You must also file a statement of dissolution with the Department of Licensing and Consumer Protection Corporations Division. The filing fee is $220. You can file the articles of dissolution online, by mail, or in person. A foreign LLC files a withdrawal on dissolution or conversion to a non-filing entity.
Anonymous LLCs cannot be formed in the District of Columbia. The only states that currently allow the formation of an anonymous LLC are Delaware, Nevada, New Mexico, and Wyoming. Entrepreneurs who do not want to disclose their names on articles of organization can protect their privacy by using a professional registered agent service instead.
Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
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