How to Start LLC in Washington DC Step-by-Step Guide
To form an LLC in Washington DC:
- Choose an LLC Name
- Select a Registered Agent
- File the Articles of Organization
- Create an Operating Agreement
- Obtain an EIN
- File for Tax Registration
- Get a Certificate of Occupancy or Home Occupation Permit
If you want to handle the formation yourself, follow our free, detailed guide below. For information on LLC costs in Washington DC, check out the specifics of LLC expenses.
How much does it cost to start an LLC in Washington DC?
It costs $99 to start an LLC in Washington DC.
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Follow these steps to set up your LLC:
1. Ensure Your Washington DC LLC Name is Available
Follow these steps to make sure your LLC name is unique and meets state requirements:
Use the Entity Search tool on the Washington DC Department of Licensing and Consumer Protection website to check if your desired name is already in use. Two businesses in Washington DC cannot have the same name.
Verify if the domain name for your LLC is available. This is important if you plan to create a website for your business.
Select a name that is easy to remember and reflects your brand effectively.
How can I verify if my preferred LLC name is available?
To check if your desired LLC name is available, search the online database provided by the Washington DC Department of Licensing and Consumer Protection.
What are the naming rules for an LLC in Washington DC?
Your LLC name must include "Limited Liability Company," "LLC", or "L.L.C." It must be unique and distinguishable from other registered business names in Washington DC and cannot contain restricted words without proper approval.
Is it possible to reserve an LLC name?
Yes, you can reserve a name for your LLC for up to 120 days by submitting a Name Reservation application, which costs $50.
2. Find a Registered Agent
The next step is to select your Washington DC Registered Agent.
You must choose a Registered Agent for your LLC in Washington DC. This person or organization will handle your LLC's official notices and legal communications. The Registered Agent must have a physical address in Washington DC to perform this role effectively.
Who Can Be a Registered Agent?
- You: If you have a physical address in Washington DC.
- A Trusted Friend or Family Member: Must have a physical address in Washington DC.
- A Professional Registered Agent Service: Useful if you prefer privacy or don’t have a physical address in Washington DC.
Receives official notices and legal documents for your LLC. Must have a physical address in Washington DC (PO Boxes are not accepted). The Registered Agent’s information will be part of the public record.
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What is a Registered Agent?
A Registered Agent is a person or entity appointed to receive legal documents and official government communications for your LLC.
Who can serve as a Registered Agent in Washington DC?
In Washington DC, a Registered Agent can be either an individual who resides in the state or a business entity authorized to operate in Washington DC The agent must have a physical street address in the state (P.O. boxes are not acceptable).
Can I be my own Registered Agent?
Yes, you can act as your own Registered Agent if you fulfill the residency and physical address requirements.
3. File Washington DC LLC Articles of Organization
To start your Washington DC LLC, you need to prepare and send the Articles of Organization to the Washington DC Department of Licensing and Consumer Protection.
This form includes basic information about your LLC, such as your name and who your registered agent is. Filing this form online costs $99. This fee is a one-time payment to officially create your LLC.
How do I file the Articles of Organization?
You can file the Articles of Organization either online or by mail with the Washington DC Department of Licensing and Consumer Protection. It costs $99 to file.
What information do I need to include?
The Articles of Organization should include:
- Your LLC's name
- Address of your main office
- Details of your registered agent
- Names and addresses of the people who are starting the LLC
How long does it take to process?
Online filings usually take a few business days. Mail filings might take longer.
4. Create an Operating Agreement
The purpose of a Washington DC LLC Operating Agreement is to specify who owns the LLC and how it will be operated. While your LLC is created by the certificates, the internal operations of the LLC are outlined in the Operating Agreement.
When you wish to open a business account, banks may request it. It is also useful for demonstrating to the court that your LLC is operating in compliance with the law.
Because of this, having an operating agreement is a smart idea for any LLC, even if it's just you and your business.
This paperwork can serve as proof that your LLC is being handled appropriately, which can shield you from liability.
The Operating Agreement is not required to be submitted to the IRS. Simply maintain a duplicate in your company.
What is an Operating Agreement?
An Operating Agreement is a document that outlines the ownership, management structure, and operating procedures of the LLC.
Is an Operating Agreement required in Washington DC?
While not legally required, it is highly recommended to have an Operating Agreement to establish clear rules and prevent disputes.
What should be included in an Operating Agreement?
The Operating Agreement should include details on member roles and responsibilities, voting rights, profit distribution, management structure, and procedures for adding or removing members.
5. Get an EIN (Employer Identification Number)
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How do I apply for an EIN?
You can apply for an EIN online through the IRS website, or by mail or fax.
How much does an EIN cost?
Obtaining an EIN is free. There are no charges for the application.
How long does it take to receive an EIN?
If you apply online, you will receive your EIN within about 15 minutes. Applying by mail or fax may take 1 to 3 months.
Why do I need an EIN for my LLC?
An EIN is necessary for federal tax purposes, hiring employees, opening a business bank account, and meeting other business requirements.
6. Register with the Office of Tax & Revenue
In Washington, DC, you must register as an LLC operator with the Office of Tax & Revenue (OTR).
First, get your Employer Identification Number (EIN) from the IRS.
You can complete the registration online for free at the OTR’s MyTaxDC website. After you register, your LLC will be set up for all the necessary taxes. You’ll also receive updates about tax deadlines.
Within 3 to 5 business days, you should get a Notice of Business Tax Registration by mail. This notice will have a Notice Number, which you’ll need to get your Basic Business License.
7. Get a Certificate of Occupancy or Home Occupation Permit
In Washington, DC, all LLCs need either a Certificate of Occupancy or a Home Occupation Permit (HOP) to operate legally.
Certificate of Occupancy: Required if your LLC uses office or commercial space. The cost is generally $75, but it can vary based on the size of the space. You usually apply by emailing the forms to the DC Department of Buildings.
If your company operates out of a residential structure, you must obtain a Home Occupation Permit (HOP). Regardless of whether you own or rent your house, you are required to obtain a HOP, which costs $122.
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After Your LLC is Approved
Business Bank Account For Washington DC LLC
Get a business bank account for your Washington DC LLC to keep your personal and business finances separate. This helps you track your money better and simplifies tax reporting.
Licenses and Permits
Your LLC might need certain licenses or permits based on what type of business you run and where you operate. Check the local requirements to make sure you’re compliant.
Taxes For Washington DC LLC
Your Washington DC LLC will need to handle various taxes. This includes federal and state income taxes. If you have employees, you’ll also need to pay payroll taxes. Know what taxes you need to pay to stay in good standing.
Annual Report
Each year, file an Annual Report with the Washington DC Department of Licensing and Consumer Protection. This report updates your LLC’s information and comes with a small fee. Keeping this report current helps keep your LLC active and compliant.