LLC DC: Everything You Need to Know
To form an LLC in DC, you’ll need to follow all the necessary steps and then, you can begin conducting business in the state.3 min read
To form an LLC in DC, you’ll need to follow all the necessary steps. Then, you can begin conducting business in the state.
Before you take the steps necessary to form your business, keep in mind the costs associated with starting your LLC. This includes a $220 registration fee (along with an optional $50-$100 fee if you choose to expedite your registration request). You’ll also have to pay additional fees to obtain business license and applicable permits.
You have a few choices for submitting your registration information, including:
- By mail (processing time of 3-4 weeks)
- Online (10 business day processing time)
- In-person (one-day processing time)
- Online/by mail and expedite your request (3 business day processing time)
Choose Your Business Name
Before anything else, you will need to choose a name for your business. Washington, D.C. has certain requirements for naming your LLC. Most importantly, your name must be available, and not already in use by another D.C. LLC. You can find out if a name is already in use by searching the District of Columbia Corporations Divisions Business Name Database.
Once you have satisfied the requirements for naming your LLC, i.e. finding a name that is available for use, not using certain prohibited words (Doctor, Lawyer, Bank, University, etc.), and including the LLC designator (L.L.C., LLC), you can reserve the name for a period of up to 120 days by submitting a request (GN-3) along with a $50 fee.
File the Articles of Organization
The next step is to file the Articles of Organization. Included in this document will be the business name, principal address, the date in which you want to effectively begin business in D.C., member names and addresses, the date when the person/business will become a member (this can be a delayed date), the registered agent name and address, and the drafter’s signature.
While a lot of states require that all members sign this document, the District of Columbia only requires that the party drafting the document sign and date the paperwork.
Choose a Registered Agent
As previously noted, information regarding the registered agent must be included in the Articles of Organization. The agent will accept legal papers on the LLC’s behalf. The following criteria must be met in order for the third party to be an agent:
- An individual residing in D.C.
- A business with a physical office in D.C.
- A commercial registered agent that is registered in D.C.
- The address must be a physical address and not a P.O. Box
Draft the Operating Agreement
While this document is not required in the District of Columbia, it is highly recommended. If you do choose to draft this agreement, you don’t need to file it with the Articles of Organization. You should draft this agreement with all members in the LLC.
Obtain an EIN
If you are forming a multi-member LLC, then you must obtain an EIN (Employer Identification Number) from the IRS. If you are a single-member LLC being taxed as a sole proprietorship, you need not obtain an EIN, unless you plan on hiring employees. However, even if you don’t plan on hiring employees, but choose to be taxed as a corporation, then you will need an EIN.
Business Licenses & Permits
In order to conduct business in the District of Columbia, the company must be licensed by the Department of Consumer and Regulatory Affairs. The license you might need depends on the industry in which you plan on operating in.
For example, if you plan on selling products to the public, then you will need to collect sales tax, which means that you will need to register with the District of Columbia Office of Tax and Revenue. You will also need to register if you hire employees.
The District of Columbia requires LLCs to submit reports twice a year with the Department of Consumer and Regulatory Affairs, along with a fee of $300. The report must include the business name/principal address, state where it was formed, registered agent name/address, a statement regarding the LLC’s industry and affairs, and member names/addresses. The first report for the year is due by April 1st of the year following the year of formation (or the year when the business registered in the State).
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