How to Form an LLC in DC
A DC LLC (limited liability company) is a flexible business structure that—when correctly formed and maintained—protects its owners from being held personally liable for business debt. By default, LLCs are taxed as pass-through entities. To form an LLC in DC, you’ll need to file a form called Articles of Organization with the Department of Licensing and Consumer Protection (DLCP), which costs $99. But first, you’ll need to choose a business name and a registered agent. It can take DLCP up to 15 days to process your paperwork, whether you file online or by mail. If you file in person, they’ll process your documents while you wait for an extra $100. Filing the paperwork makes your LLC official, but that doesn’t mean you’re done—there are several further steps needed to get your LLC ready for business. Here, we’ll break down the entire process.
Ready to Start an LLC in Washington DC?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
First things first: your LLC needs a name. And not just any name. It’ll need to comply with DC’s naming rules as outlined in Code of the District of Columbia § 29-103.01 and 29-103.02. Basically, your LLC name needs to:
- Include an LLC indicator like “Limited Liability Company,” “Ltd. Co.” or the classic “LLC.”
- Be “distinguishable” (different from) any other business name registered or reserved in DC.
- Not include words like “bank” or “insurance” without proper approval.
Already have a business name? Create a profile and check to see if it’s available.
Can I reserve a business name in DC?
Yes. If you want to put a hold on your business name while you’re preparing to form your LLC, you can reserve your business name for up to 120 days in DC. All you need to do is file the Name Reservation Registration & Transfer (Form GN-3) and pay the $50 filing fee.
What’s the difference between my LLC’s name and a trade name?
The name you list on your Articles of Organization will become your LLC’s legal name.
A trade name (also known in some states as a DBA or doing business as name) is any name other than your LLC’s name (or your own name, if you’re operating a sole proprietorship) that you use to do business.
An LLC might use a trade name for marketing purposes or just because the owner prefers a shortened version of the name. For example, Claire’s Boot and Sole Repair, LLC might use the trade name Claire’s Boots because Claire likes the sound of it. Claire could also decide to start crocheting and sell knitwear under the trade name Claire’s Granny Squares. Claire can do all of this without forming a new LLC!
But Claire (and anyone else who uses a trade name) is legally required to register their trade name by filing a Trade Name Registration form either online, by mail, or in person. It costs $55 per trade name.
Find out more about How to get a DBA Name for Your Business.
2. Designate a Registered Agent
A Washington DC registered agent is someone who accepts legal mail on behalf of your LLC in person. Your registered agent could be you, a member or manager, or someone outside of your LLC altogether—like a professional registered agent. Whoever you appoint will need to supply a street address in the District of Columbia for your your Articles of Organization (a public document).
Learn why the pros use a registered agent service.
What does a registered agent do?
A registered agent serves as your LLC’s official point of contact for service of process, so they need to meet some special legal requirements. Basically, your registered agent must:
- Have a physical address within the District of Columbia.
- Be present at that address during regular business hours.
- Agree to accept and forward your LLC’s legal mail—fast.
Can you be your own registered agent in DC?
Definitely. If you can meet the criteria detailed in Code of the District of Columbia § 29-104-04, and listing your residential or commercial address on the public record doesn’t phase you, you can be your own registered agent.
But the thing is—listing your address on the public record is not something you should do lightly. Once your private information is online, you can’t hit “undo.” It’s there forever and will probably be posted on a janky “public records” website or two or three. Oh, the junk mail you’ll get! Hiring a registered agent is an effective way to dodge this.
Another benefit of hiring a registered agent is peace of mind. A professional registered agent will accept, scan, upload, and notify you of any scary legal mail that shows up for your LLC. This means you’ll see it right away—even if you’re away from the office.
Can I change my registered agent after I start an LLC?
Yes. To change your registered agent in DC, you just need to file a Statement of Change of Registered Agent Form with DLCP. It costs $50.
3. Submit LLC Articles of Organization
If you have a business name and registered agent, you’re ready to fill out your Articles of Organization. This is the form that—once processed by DLCP—officially establishes your LLC. It’s a big step! You’ll need to fill out this form just right or else DLCP will reject it and you’ll be back at square one. Here’s how to do it.
Everything on this form will go on the public record.
You’ll need to provide:
- Business name. Remember—it should be unique and include an LLC indicator.
- Registered agent information. Whoever will accept legal mail on behalf of your LLC—they’ll need a street address in DC.
- Effective date. If you want to delay the start of your LLC, you can do so for up to 90 days by adding a future date here. Tip: Most LLCs skip.
- Miscellaneous provisions. This is where you can include anything extra. If you’re forming an LLC that offers licensed services (a PLLC), you’ll list your professional service here. If you’re forming a series LLC, you’ll need to state that here.
- Member and manager information. You’ll need to list the names and residential and business addresses of every member or manager with interest or control over the company. Say what? Anyone who holds more than 10% membership interest or controls financial, operational, or day-to-day dealings must be listed.
- Organizer. Whoever forms your LLC needs to provide a name, address, and signature. This doesn’t have to be someone in your LLC.
Once you complete your articles, you need to submit them to DLCP by mail, in person, or online. You’ll also need to pay the $99 filing fee (add $50 for 3-day service or $100 for same-day processing).
How can I keep my personal information off the public record?
It’s tough. Your best bet for protecting your private information, well, private, is to keep it off this form altogether. But if you leave any of the required fields blank, DLCP will reject your filing. What’s a privacy-minded business owner to do?
Find a registered agent who will list their business address everywhere allowed on this form. We’re that registered agent.
What’s the difference between a member-managed and manager-managed LLC?
When it comes to managing an LLC, there are two choices: member-managed or manager-managed.
- In a member-managed LLC, members (owners) share the day-to-day responsibilities of running the business—tasks like managing payroll, hiring and firing employees, ordering inventory, entering into leases and more fall to the owners to handle.
- In a manager-managed LLC, the members hire one or more managers to handle the LLC’s daily operations. A manager can be a member as long as they’re properly compensated.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
What’s a series LLC?
A series LLC a special type of LLC only available in some states and in the District of Columbia. In a series LLC, there’s a parent or umbrella LLC with one or more divisions within it. When properly formed and maintained, each division (called a “series”) has its own liability, so that the debts of one series aren’t counted against the finances of another series. In other words, forming a series LLC is an effective way to separate out assets without forming multiple LLCs.
Intrigued? Read more about How to Start a DC Series LLC.
How do I file the DC Articles of Organization?
You can submit your Articles of Organization to DLCP online, by mail, or in person.
Department of Licensing and Consumer Protection
PO Box 92300
Washington, DC 20090
1100 4th St, SW
Washington, DC 20024
4. Write an LLC Operating Agreement
Your LLC needs an operating agreement. It’s the backbone of your LLC—a legally binding document that establishes the rules and procedures for how your LLC will handle big picture situations. Processes for things like voting, allocating profits and losses, dissolving the business, and more are defined in your operating agreement. It’s an internal document that you’ll keep on file with your other business records.
Check out our attorney-drafted Washington DC LLC Operating Agreement.
Does DC require an LLC to have an operating agreement?
Nope. The Code of the District Columbia defines the powers and limitations of an operating agreement (see § 29-801-07), but there are no statutes requiring LLCs to adopt an operating agreement. No one legally requires you to brush your teeth, either. If you want a healthy, well-functioning LLC, you need an operating agreement, whether its required or not.
That said, any lawyer worth her salt would tell you to get an operating agreement. Without one, you won’t be able to open a bank account, you’ll have trouble defending your limited liability status, and you’ll have no road map for fairly resolving disputes.
What should be included in an operating agreement?
A solid operating agreement will plan for every major situation your LLC is likely (and maybe even unlikely) to face. Here’s a list of the topics most operating agreements address:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Does a single-member LLC need an operating agreement?
Yes. Without an operating agreement, a single-member LLC can appear perilously similar to a sole proprietorship (a business type without liability protection) in the eyes of the court, should you ever face a lawsuit. And although you won’t need to resolve a dispute with yourself, you will need an operating agreement to open a bank account for your business.
5. Get an EIN
An employer identification number (sometimes called a FEIN), is a nine-digit number the IRS will assign to your LLC for tax identification purposes. You’ll apply for your EIN directly with the IRS online or by mail. Like with most things, filing online is fastest, but if you don’t have a social security number, you’ll need to file by mail.
Do I need an EIN for my Washington DC LLC?
Yes. Legally speaking, your LLC only needs to obtain an EIN if it has employees or elects to be taxed as a corporation. However, you’ll need an EIN to open a business bank account. And your EIN spares you from the need to give out your social security number out to vendors and other business associates.
What To Do After Forming Your DC LLC
6. Open a Bank Account
You have an LLC, but you’re not done yet. You need to take a few more steps before you’re ready to do business, and the first is to open a business bank account. This will ensure you can keep your business money separate from your personal money, which is a crucial step in maintaining your limited liability status and protecting your personal assets.
When you open a bank account for your DC LLC, be sure to bring the following:
- DC LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account template.
7. Fund the LLC
You have a shiny new business bank account for your LLC—time to pony up. Each member should make an initial contribution to pay for their percentage of ownership in the LLC (called membership interest). You can do this by having each member write a check or set up a bank transfer to the LLC’s bank account. Members can also make initial contributions in the form of property or services, but doing so often triggers a tax event.
What is LLC membership interest?
Membership interest is the percentage of the LLC that a member owns. Most of the time, it’s determined by how much a member invests. So if you put $25 into your LLC but the other member puts in $75, you’ll have 25% membership interest and the other member will hold 75%. Unless another arrangement is spelled out in the operating agreement, membership interest usually correlates directly with voting power. So in this example, the other member would hold decision-making power in the LLC.
8. File State Reports & Taxes
The District of Columbia requires your LLC to file a report every two years. The purpose is basically to keep DLCP up-to-date on who owns your LLC and how they can get in touch with you. It costs $300 to file and can be submitted online or by mail.
Worried you’ll forget? Let us file your DC annual report for you.
When is the DC biennial report due?
The DC biennial report is due April 1st every other year. April Fools! No, just kidding, it really is.
If you’re more than five months late, DLCP could administratively dissolve your LLC. Yikes!
How are DC LLCs taxed?
Washington DC LLCs are taxed as pass-through entities by default. This means that any money the LLC makes “passes through” the LLC itself, right to the members. The members report the income on their personal tax returns and is subject to the federal self employment tax of 15.3%. LLCs have the option to file with the IRS to be taxed as an S-Corp or C-Corp.
Learn more about S-Corp Vs LLC tax designation.
Does my DC LLC need a business license?
Probably. Most LLCs in DC will need to apply for a business license from DLCP. There are specific licenses for certain business activities—if your LLC doesn’t fit one of these categories, you’ll need a general business license. You can apply for a business license online, in person, or by mail.