Washington DC LLC
Everything You Need to Know About Washington DC LLCs:
Washington DC LLC Formation Options
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How to Start an LLC in Washington DC
To start an LLC in Washington DC, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Articles of Organization with the Department of Consumer & Regulatory Affairs. You can file the document online, by mail, or in person. The articles cost $220 to file. Once filed with the district, this document formally creates your Washington DC LLC.
According to DC Code § 29–104.02, every Washington DC LLC must appoint and maintain a registered agent. You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your articles wherever possible to ensure maximum privacy.
If you’re starting a new business, you probably already know what you want to name your LLC. But you’ll need to know if your preferred name is available. To find out, visit https://corponline.dcra.dc.gov/Account.aspx/LogOn?ReturnUrl=%2F and search until you find the perfect name for your LLC.
Once you know who your registered agent will be and what your LLC name is, you’re ready to file your Washington DC Articles of Organization. Follow along with our filing instructions below:
Filing the Washington DC LLC Certificate of Formation
Learn more about each Articles of Organization requirement below. Note that the information you provide becomes part of the public record—permanently.
Or skip the form entirely and hire us to form your Washington DC LLC. We provide a free business address to list whenever possible throughout the filing to better keep your personal address private.
1. Company Name
You have to include “Limited Liability Company” or an abbreviation like “LLC.”
2. Principal Office
Your principal office must be a street address, not a PO Box. It’s important to remember that your Articles of Organization are a matter of public record, so putting a personal address could jeopardize your privacy and security. When you hire Northwest, you can list our address here.
3. Registered Agent’s Name and Address
Your Washington DC registered agent must be available during business hours at a physical DC address to accept legal notices for your LLC. You can list yourself, someone else, or a service like Northwest. Naturally, we recommend Northwest.
There’s not actually anything for you to do here. Your Washington DC LLC must have at least one member, and this reality needs to be stated in the articles. But, DC has taken the liberty of including this statement in the articles for you, so you can skip ahead.
5. Effective Date
Skip this section if you want your LLC to start right away. Want to wait a bit (maybe the current tax year’s almost over)? You can list a start date up to 90 days in the future.
6. Miscellaneous Provisions
Use this section for any additional, optional provisions applicable to your Washington DC LLC. If you’re forming a professional LLC, you’ll use this section to state the professional service you’ll be offering. If you’re forming a series LLC, that would be stated here, as well.
7. Member and Manager Information
Washington DC requires you to list the names, residence addresses, and business addresses of every member and manager that has interest or control over the company. This means that people need to be listed if their ownership exceeds 10%, they control financial or operational decisions, or they have the ability to direct the LLC’s day-to-day operations.
8. LLC Organizer
Your organizer is just whoever signs and submits your articles. Organizers must include their name and address. Hire Northwest, and we’ll be your organizer.
Why Have a Registered Agent Form Your Washington DC LLC?
Professionals in Washington DC hire registered agent services like Northwest Registered Agent to start an LLC—but why?
Standard filing companies don’t have employees or offices in every state (or district, in this case). But as a national registered agent, it’s a requirement for us, which is a benefit for our clients. We have an office in DC, in Dupont Circle. We’re on a first name basis with the people who work in the Department of Consumer & Regulatory Affairs. We know all the fastest filing methods, which translates to fast, professional service—without extra fees.
As your registered agent, we list our DC registered office address on your LLC’s formation documents. Why? If you’re starting a business from your apartment in Georgetown, do you really want your apartment address as your business address? (Hint: the answer is no.) We’ll list our address, so you don’t have to list yours. Plus, we never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all standard and part of our commitment to Privacy by Default®.
Free Mail Forwarding and Business Address
We already accept your legal mail—so why not take it a step further? In every state, we include limited digital mail forwarding for your regular mail too (5 pieces of regular mail a year; $15 a doc after that). Plus, you can list our address as your business address. That means you can have all business mail routed through our office. With both mail forwarding and a business address included, you get a level of security unmatched in the formation industry.
We know the in’s and out’s of each state (and district)—and we use this knowledge to help you when you need it most. Our team of Corporate Guides® has over 200 local business experts. You can call or email us for answers to all your questions about your LLC in Washington DC. Our Corporate Guides are dedicated solely to helping you with your business—not selling you services or meeting quotas.
What Do I Do After My Washington DC LLC Is Formed?
After your Washington DC Articles of Organization are approved, you still have a few more important steps to take, including getting an EIN, drafting an operating agreement, opening a bank account, funding the LLC and learning about district reporting and tax requirements.
Get an EIN
An EIN (“Employer Identification Number”) is a federal tax ID assigned to your business by the IRS. The IRS uses your EIN to easily identify your business on tax filings.
Does a Washington DC LLC need an EIN?
You’ll need an EIN if you have employees, you’ll likely use your EIN when you open a business bank account, and you’ll need your EIN when you apply for business licensing.
How do I get an EIN for my LLC?
You can apply for an EIN directly from the IRS at no cost. Most businesses are able to apply online, but if you don’t have a social security number, you’ll need to apply with a paper form. Want one less thing to do? Add on EIN service when you hire us, and we’ll get your EIN for you. Or choose our VIP service—an EIN is included.
Write an LLC Operating Agreement
Operating agreements put into writing how your business actually operates—how much each member invested, how profits and losses will be allocated, how voting works, and what happens if there’s a dispute or if the whole business (knock on wood) falls apart.
Do I need an operating agreement for a Washington DC LLC?
There is no legal requirement for your Washington DC LLC to have an operating agreement. DC Code § 29–801.02 describes an operating agreement as an agreement that can be oral, implied, or recorded in some way. However, no statutes dictate that such an agreement must be made.
That said, an operating agreement is so much more than just tedious paperwork. It’s one of your LLC’s most important internal documents. Creating one can help your LLC with small events (like opening a bank account) to big events (like how to handle dissolution).
What should be in an operating agreement?
An operating agreement should explain how the business will handle “big picture” situations—everything from allocating profits and losses to dissolving the business. Below is a list of common topics that operating agreements should cover.
- Initial investments
- Profits, losses, and distributions
- Voting rights, decision-making powers, and management
- Transfer of membership interest
- Dissolving the business
Your operating agreement can cover pretty much anything as long as it isn’t contrary to Washington DC law. Topics not allowed to be changed in the operating agreement are listed in DC Code § 29–801.07, which forbids changing the registered agent requirement or eliminating the obligation of good faith and fair dealing.
How do I write an operating agreement?
To write an operating agreement, you need to address how your business will handle money, members, votes, management, and more. Not sure how to get started? At Northwest, we’re here to help your LLC get off on the right foot. When you hire us, we provide your business with a free LLC operating agreement, specific to your management style. We’ve spent years developing these agreements and other free LLC forms—which have been used by over a million LLCs.
Open an LLC Bank Account
Your LLC needs its own bank account. Why? An LLC gets its limited liability from being a distinct entity, separate from its members. If you mix personal and business finances, you could lose your liability protections.
How do I open a bank account for my Washington DC LLC?
To open a bank account for your Washington DC LLC, you will need to bring the following with you to the bank:
A copy of the Washington DC LLC Articles of Organization
The LLC operating agreement
The LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC. Northwest can help with this as well—LLC bank resolutions are one of the many free legal forms we provide to ensure you can get your LLC started fast.
Fund the LLC
Time to put some money in that new LLC bank account. What money? For starters, your initial contributions to your LLC’s capital. LLC members are owners, and each owner needs to pay for their membership interest to fund the LLC.
What is membership interest?
Membership interest is your percentage of ownership of the LLC. Membership interest is normally proportionate to your investment. So how does this work?
Imagine your LLC has 5 members. 4 members each invest $1,000 in the business. One member invests $6,000. The total contribution of all members is $10,000. The 4 members each own 10% of the business. The moneybags member who shelled out $6,000 owns 60% of the business.
Typically, this also means that the 4 members would each get 10% of any profits, and moneybags would get 60%. Exactly how profits and losses are allocated, however, can be adjusted in the operating agreement as long as changes are in line with IRS requirements and Washington DC laws.
File Washington DC Reports & Taxes
Washington DC LLCs are required to file a report every two years. This report is basically an information update you file so the District of Columbia knows who currently runs things and how to contact your business. Washington DC LLCs are also subject to district tax filing requirements.
How much is the Washington DC Biennial Report fee?
The fee for the Washington DC Biennial Report is $300. File late, and an extra $100 is tacked on.
When is the Washington DC Biennial Report due?
Your Washington DC Biennial Report is due by April 1 every other year. The first report is due the year after your business forms. So, if your articles are approved in February 2021, your first report would be due on April 1, 2022.
When you sign up for Northwest, we send you reminders for your biennial report due dates. Want one less thing to worry about? With our business renewal service, we can complete and submit your biennial report for you for $100 plus DC’s fee.
What should I know about Washington DC LLC taxes?
The Washington DC personal net income tax rate is marginal, with six distinct tax brackets:
$350,001-$1 million: 8.75
Over $1 million: 8.95%
DC also has a general sales tax of 6%. However, some goods and services are taxed at higher rates. Restaurant food and drinks are taxed at 10%, hotels are taxed at 14.95%, and parking in commercial lots comes with a whopping 18% tax. (As if parking in DC weren’t hard enough.)
Most Washington DC LLCs will also have to pay the Unincorporated Business Franchise Tax each year. The current rate is 8.25%. For unincorporated businesses making more than $12,000 in gross receipts, but less than $1 million, the minimum tax payment is $250, rising to minimum $1,000 when gross receipts exceed $1 million.
As you sort through the nuances of DC’s tax system, we can make sure your LLC is formed without a hiccup. At Northwest, we can form your Washington DC LLC for as low as $445. Or, pay just $45 out the door with our VIP monthly payment option.
Do LLCs have to register with the Washington DC Office of Tax and Revenue?
Yes. You will need to register with the DC Office of Tax and Revenue prior to obtaining business licensing. You can register online at MyTaxDC.
Washington DC LLC FAQs
How can I submit the Washington DC LLC Articles of Organization?
You can file Washington DC articles online, by mail, or in person. Hand-deliveries can be dropped off at the Business License Center at 1100 4th Street SW, 2nd Floor, Washington, DC. Keep in mind that hand-delivery comes with an extra $100 fee, though your articles will be expedited. Mailed articles can be sent to:
Department of Consumer and Regulatory Affairs
PO Box 92300
Washington, DC 20090
How much does it cost to start a Washington DC LLC?
The filing fee for your Washington DC LLC Articles of Organization is $220. Add $50 for expedited 3-day service, or $100 for same-day service.
Hire Northwest for a one-time fee of $445 ($495 for 3-day expediting; $545 for 1-day expediting). This includes district filing fees, a year of registered agent service, limited mail forwarding and loads of useful forms and tools to help get your Washington DC LLC up and running. Or, pay just $45 out the door with our VIP monthly payment option.
How long does it take to start a Washington DC LLC?
Online Articles of Organization filings typically take 3-4 business days to process although this varies with volume. Mailed filings take significantly longer—plan on waiting a minimum of two weeks, though it could take longer. When you pay extra to expedite your filings, they are processed in 1 or 3 days.
Does a Washington DC LLC need a business license?
Yes. All entities conducting business within the District of Columbia are required to have a business license. Before you can even apply for a license, several steps must be completed. An EIN number must be obtained, your LLC must be registered with the DC Office of Tax and Revenue, and you must have received a Home Occupation Permit or Certificate of Occupancy.
Most LLCs will be sufficiently licensed with a Basic Business License (renewable every 2 years unless you pay for a 4-year license). These licenses generally cost in the hundreds of dollars, though the actual fee is determined by your specific industry and service. Or, as the form refers to it, your “endorsement.” If you have multiple endorsements—aka your business does multiple things—you will have to pay multiple fees. For example, the licensing fee for bakeries is $517. The fee for caterers is $348.70. If you run a bakery that also caters, you would have to pay both fees. If your business doesn’t fall under any of the specific endorsement categories, you would apply for the General Business license endorsement, which costs $324.50.
Need an EIN or a certified copy of your formation docs for your license applications? Northwest can help. You can easily add on these items to your LLC formation order.
Can a Washington DC LLC help me live more privately?
While you can’t remove all ownership information from Washington DC public filings (like you can in states like New Mexico, Delaware, and Wyoming), a Washington DC LLC can still help you reduce your public footprint. Though you do have to list some members and managers in the Articles of Organization, hiring Northwest means being able to use our name and address on public filings whenever possible. Check out our page on living privately with an LLC to learn more.
What is a foreign Washington DC LLC?
A foreign Washington DC LLC is any LLC formed outside of Washington DC but registered to do business in the district. For example, if you formed an LLC in Maryland but wanted to conduct business in Washington DC as well, you would register as a foreign LLC in Washington DC by filing a Foreign Registration Statement with the Department of Consumer and Regulatory Affairs. Like domestic LLCs, foreign LLCs in the district have to file Washington DC biennial reports. Northwest can register your foreign Washington DC LLC for you today!
How to Order LLC Formation Service
Our Washington DC LLC formation service is designed to be fast and easy—signing up takes just a couple minutes. Here’s how it works:
With Northwest, we give you flexibility on how to pay. You can pay all the fees up front (this includes one full year of registered agent service). Or, pay just $45 out the door with our VIP monthly payment option. With our VIP option, we also include an EIN. Just choose one of the buttons below, answer a few easy questions about your business and submit your payment.
We’ll prepare your Washington DC Articles of Organization and send them to the Department of Consumer and Regulatory Affairs for approval. In the meantime, you’ll have immediate access to your online account, where you can find useful forms, pre-populated with your business information.
Once the Washington DC Department of Consumer and Regulatory Affairs has approved your filing, we notify you that your Washington DC LLC has been legally formed. You can now take any necessary next steps, like getting an EIN and opening a bank account.