How to Form a District of Columbia LLC
By Bazal Razzaq
Updated: August 16, 2023, 12:30pm
Editorial Note: We earn a commission if you use the services recommended on this page. Commissions do not affect our opinions or recommendations.
- Pick a name for your District of Columbia LLC
- Draft a business plan for your District of Columbia LLC
- Choose your registered agent
- Prepare and file your Articles of Incorporation with the Secretary of State
- Set an Operating Agreement
- Apply for business licenses and permits
- Obtain the nine-digit EIN from the IRS
- Submit your Biennial Report
- Register your LLC with the State’s tax agency
- Final Word
- How To Form An LLC In 50 States
- Frequently Asked Questions (FAQs)
Looking to form an LLC in the capital state of the US where the nation’s history, politics, and innovation meet? Well, you’re at the right place! Our comprehensive guide aims to do just that!
#1 Pick a name for your District of Columbia LLC
Before beginning the filing process, you must first choose the perfect legally compliant name for your company. This name will also be included in your Articles of Organization document.
Some general facts to remember before picking a name for your Columbia LLC are:
- Choose a name that’s related to your products and services. It’s always fantastic if your LLC has a clear and original name.
- Also, ensure that the name is easy to remember and spell. Avoid complex spellings or using obscure words that may confuse potential customers.
- Include terms like “LLC” at the end of your business name. It should end with one of the following short forms to comply with Washington DC’s naming regulations:
- Limited Liability Company
- Limited Company
- LLC(Most entrepreneurs stick with this one)
- Avoid using words like “corporation,” “bank,” and “university” that may be restrictive or require additional approvals.
- Avoid using terms like “association,” “corporation,” “incorporated,” or any abbreviations of either term (“assoc.” “corp.” or “inc.”)
- Your name shouldn’t include or be indicative of any obscene, vulgar, or forbidden words.
- Make sure that your chosen LLC name isn’t the same as any other registered company’s domain name. If unsure, you can check the United States Patent and Trademark Office (USPTO) database and then make a decision accordingly. Or, do a quick name search on the DC website.
If you still don’t feel confident about your chosen LLC name, here’s a complete list of the District of Columbia’s naming rules.
Lastly, if you do have a legally compliant name in your mind but aren’t ready to kick start your LLC just yet, there’s always an option to reserve it. In D.C., you can reserve a business name for up to 120 days by paying the required fee of $55 and filing Trade Name Registration Form to the Secretary of State.
#2 Draft a business plan for your District of Columbia LLC
After deciding on a name for your LLC, you need to draft a proper business plan discussing the key elements of your LLC. While not all LLCs in D.C. have a business plan, most successful ones do!
A clear, concise, and thoughtful business plan is like a blueprint for your LLC’s success. It outlines your goals, target market, competition, financial projections, and strategies for growth.
Some elements you can include in your LLC business plan,
- The name, address, and contact details of your company
- A brief summary outlining the mission and unique values of your LLC
- Financial forecasts, including income statements, balance sheets, and cash flow projections.
- Research analysis about your target market, competitors, and industry trends.
- Your Products or Services
- Funding Request, if any
- Marketing and Sales Strategy
The best part about drafting a business plan is you can create one according to your specific needs and budget. If implemented properly, an affordable but reliable plan can take your company to unbelievable heights.
#3 Choose your registered agent
Like all other states in the USA, Washington D.C. also requires you to assign a registered agent for your LLC. You can think of the agent as your official contract since this person will be responsible for receiving all your important legal, official, and financial documentation and notices on behalf of your LLC.
The registered agent for a District of Columbia LLC needs to be at least 18 years or older, have a physical street address in the District of Columbia, and be available during regular business hours(9:00 AM to 6 PM).
Remember to mention the name and address of your statutory agent in your LLC formation documents(like the Articles of Organization) and file them with the DCRA (DC Department of Consumer and Regulatory Affairs).
#4 Prepare and file your Articles of Incorporation with the Secretary of State
You’ll typically need the following details to include in your form,
- LLC name.
- Street address of the main office.
- Name and address of the registered agent.
- General reason for forming the LLC.
- LLC duration (often perpetual) or specified end date if applicable.
- Effective date of the Articles (upon filing or later).
- Management structure: member-managed or manager-managed.
- Signature of the person forming the LLC.
Department of Licensing and Consumer Protection
P.O. Box 92300
Washington, DC 20090
The official address is,
Department of Licensing and Consumer Protection
1100 4th St. SW
Washington, DC 20024
The filing fee is $99 for online or by mail submissions and $199 if you submit it in-person. The charge is payable to the Department of Licensing and Consumer Protection and is nonrefundable.
After filing, the secretary of State will review your submission. Once they confirm your application, the LLC will officially be a legal entity.
#5 Set an Operating Agreement
Even though it isn’t mandatory in Washington D.C. to set an Operating Agreement, we strongly suggest you create one in case of future fights, misunderstandings, and confusion between the members/owners of your LLC.
A solid operating agreement can include,
- Name and primary location of the LLC
- Names and contact details of members/owners within the LLC
- Intended timeframe of your company
- Identity and location of the registered agent
- Details concerning the Articles of Organization
- Business objectives and mission
- Contributors to the LLC and their respective inputs
- Ownership portion, voting privileges, and profit distribution for each member
- Arrangements for sharing profits and handling losses
- Process for accepting and departing members
- LLC administration and decision-making
- Terms of dissolution
- Clauses related to indemnification and liability
Without a formal agreement, the courts decide matters according to state regulations, which may not always align with what’s best for the LLC and its members/owners.
#6 Apply for business licenses and permits
Every LLC in the District of Columbia need a Basic Business License (BBL) once they’ve filed their Articles of Organization document and obtained their EIN. You can apply for this license either online or in person.
If you’re applying for your BBL offline, you can directly visit the Business License Center and complete your form at a My DC Business Center kiosk.
You can also find a list of all the businesses on the Department of Licensing and Consumer Protection website, along with the fees and licensing requirements of their specific industry. In case your LLC isn’t listed anywhere on the list, you need to register for a General Business License(GBL), which is a kind of BBL.
#7 Obtain the nine-digit EIN from the IRS
For the next step, you need to obtain a federal Employer Identification Number from the IRS(Internal Revenue Service) for free. This nine-digit number is quite similar to the Social Security Number(SSN) and identifies your LLC for taxation purposes. It also keeps track of your company’s tax reporting.
The main purpose of an EIN is to help with the following purposes:
- Hire employees
- Apply for business licenses and permits
- Conduct daily business operations
- Meeting federal and state tax obligations
- Opening professional business bank accounts
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
#8 Submit your Biennial Report
All District of Columbia LLCs need to submit a report biannually to the Department of Consumer and Regulatory Affairs. It should include the following details:
- The name and address of your LLC
- The state where it was formed
- Principal office address
- The names, addresses, and contact details of the LLC members/owners.
- A statement of all the business operations and activities carried out by your District of Columbia LLC.
The report needs to be filed on or before April 1, the following year, your LLC was formed. From then on, the reports will be due every second year on April 1. The filing fee is $300 if you submit online or by mail and $400 in person. The mail-in fillings should include a cover letter.
#9 Register your LLC with the State's tax agency
Once everything is done, you need to register your LLC with the appropriate state tax authority. Doing this ensures that the state recognizes your LLC as a legal entity for taxation purposes.
You also need to remain updated about the different taxes your LLC is liable to pay. For instance, all LLCs in D.C. need to pay an annual franchise tax by filing Form D-30(for LLCs with an income of more than $12,000). And for Multi Member LLCs(MMLLCs) with an income of $12,000 or less, Form D-60 needs to be submitted.
All payments should be made to the DC Treasurer. Also, if you operate on a calendar-year basis, you need to file Franchise tax returns by April 15, and for fiscal-year filers, submit returns by the 15th day of the fourth month after the tax year closes.
Likewise, you need to take note of plenty of other taxes like Washington D.C. Sales Tax, Washington D.C. Employer Taxes, and Income Taxes.
Once your Washington D.C. LLC is up and running, you need to go ahead with the rest of the formalities, like,
- Opening a business bank account.
- Getting a business credit card.
- Buying business insurance.
- Safeguarding your name and logo with a trademark.
Also, if you plan on hiring employees for your company, you need to stay compliant and focus on doing the following,
- Obtain your EIN (Employee Identification Number).
- Ask your employees to fill out the Employee Eligibility Form.
- Set up a process for the collection and payment of taxes.
- Make sure you have workers’ compensation insurance
- Report to the state about new hires within 20 days of hiring them.
For any more information, here’s a full directory for your convenience.
And that’s it! That was all the initial information you may need before finally starting an LLC in the District of Columbia.
- New Hampshire
- South Carolina
- South Dakota
- West Virginia
Frequently Asked Questions
Your chosen name must be distinguishable from existing businesses and include “Limited Liability Company” or its abbreviation. You can check name availability on the DCRA website.
Articles of Organization are official documents that legally establish your LLC with the DCRA. You can file online or by mail, providing essential details about your business and paying the necessary filing fee.
Yes, you can dissolve your LLC by filing the necessary paperwork with the DCRA. This process involves winding down your business affairs, settling debts, and notifying creditors.
Staying compliant requires submitting reports, renewing licenses, and adhering to tax obligations. Regularly check the DCRA’s website and consider working with legal and financial advisors to stay informed and compliant.
Forming an LLC provides personal liability protection, which means that your personal assets are generally shielded from business debts and liabilities. This separation safeguards your personal finances in case your LLC faces legal issues.