District of Columbia S Corporation Formation
How it Works
M. Greg Braswell
Alonso Sarmiento Llamosas
District of Columbia S Corporation Formation
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Why use UpCounsel to form an S Corporation in the District of Columbia
Starting an S Corporation in the District of Columbia with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our S Corporation attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for S Corporation.
When forming an S Corporation in the District of Columbia with UpCounsel, the attorney you choose to help you will conduct a business name search for your the District of Columbia S Corporation and assist you in preparing your S Corporation Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Organization have been prepared and successfully filed with the the District of Columbia Corporations Division, your District of Columbia S Corporation has been formed and begins its existence as a Corporation entity.
Requirements for Forming a the District of Columbia S Corporation
Choosing a Company Name for Your S Corporation
One of the first steps in the process of forming your District of Columbia S Corporation is to choose your business name.
The business name that you choose must contain the words "S-Corp" or the abbreviation "S-Corp" or "L.L.C." as the last words in the name of the S Corporation. A professional S Corporation must contain the words "professional S-Corp" or the abbreviations "P.L.L.C.", "P.L.C.", "PS-Corp", or "PLC." The words "limited" and "company" may be abbreviated to "Ltd." and "Co.", respectively.
It must be distinguishable (not the same as or deceptively similar to) the name of an the District of Columbia S Corporation or foreign S Corporation reserved or registered and the words "Bank", "Banc", and "Bancorp", must be for a company that is a bank and must be approved by the Department of Banking.
Your S Corporation name may contain the name of one or more members.
By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your District of Columbia S Corporation before filing to see which names are available. Once you have chosen an available name, your chosen S Corporation attorney can help you properly register your name with the District of Columbia.
Articles of Organization: When forming an S Corporation in the District of Columbia, the Articles of Organization must be filed with the the District of Columbia Corporations Division. District of Columbia law requires that certain information be included in your Articles of Organization when forming your the District of Columbia S Corporation.
This information must include:
- The S-Corp's name and address.
- The S-Corp's purpose.
- The S-Corp's registered agent's name, address, and signature (accepting the position).
Additionally, a District of Columbia S Corporation formation generally requires inclusion and/or consideration of the following:
S Corporation Operating Agreement: Although the S Corporation Operating Agreement is not required with the Articles of Organization, it is a good idea for every S Corporation with more than one member to have one. The Articles of Organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. the District of Columbia recognizes operating agreements as governing documents.
Membership: A S Corporation must have one or more members.
Eligibility Requirements: A natural person or an entity.
Procedure for Membership: The member may acquire an interest in the S Corporation directly from the S Corporation at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Organization or the operating agreement or, if not provided, only upon the vote of a majority in interest of the S Corporation members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the S-Corp's operating agreement.
Business Licenses: Business licenses and/or permits are required for most S-Corp's offering specific professional services. Contact the the District of Columbia Corporations Division for specific licenses.
Resident Agent needed for a the District of Columbia S Corporation
Remember, every District of Columbia S Corporation must have a registered agent in the state, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. The registered agent may be a full-time resident of the District of Columbia or a business entity that has authority to transact business in the District of Columbia. A physical District of Columbia street address is required of the registered agent.
The District of Columbia Corporations Division
Once you create an S Corporation in the District of Columbia, the District of Columbia Corporations Division will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below.
For further information, contact the the District of Columbia Corporations Division.
Recurring Responsibilities and Duties for the District of Columbia S Corporations
Biennial Reports: Every District of Columbia S Corporation must submit a biannual report to the Department of Consumer and Regulatory Affairs. This must be accompanied by a registration fee of $300. You must file using the Two-Year Report for Domestic & Foreign Filing Entity, Form BRA-25. Your first biennial report should be filed by April 1 after the year of S Corporation formation. After that, you will be required to file biennial reports every other April 1st. You should include in the report:
- S-Corp's name
- State where S Corporation first organized
- S-Corp's principal office address
- S-Corp's registered agent name and address
- Names and business addresses of managers (if applicable)
Records: Each the District of Columbia S Corporation must keep complete Corporation records open to inspection at its principal office.
Filing Fees for a the District of Columbia S Corporation
The processing fee for the Articles of Organization is generally about $220. Also, the filing and reservation of the S-Corp's name is $50. These fees can change so it would be best to check with the the District of Columbia Corporations Division on what the latest fees are. You may pay these fees in many different forms including cash, check, money orders, or debit and credit cards.
Taxes for a the District of Columbia S Corporation
A the District of Columbia S Corporation is not required to be a separate tax entity like a corporation; instead, it can be considered a "pass-through entity", so that the owners of the S Corporation report business losses or profits on their personal tax returns, just like in a partnership.
The District of Columbia state law follows federal law for income tax purposes. Therefore if the S Corporation is classified as an association taxable as a corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.
Federal Income Tax: Unless you elect to tax the S Corporation as a corporation, the IRS will treat a single-member S Corporation in the District of Columbia as a sole proprietorship for tax purposes. This means that the S Corporation itself does not have to pay taxes or file a tax return. Unless you elect to tax the S Corporation as a corporation, the IRS treats multi-member S Corporations as partnerships for tax purposes. This means that S Corporation owners will each need to pay taxes on their lawful share of the profits on their personal income tax returns, not just on the S Corporation itself.
Federal Tax Identification Number: Your S Corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). An EIN is similar to an individual's social security number. You will need an EIN for your S Corporation as long as there is one member, even if the S Corporation does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.
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