Start a District of Columbia LLC

The state fees for forming a District of Columbia LLC can range from around $220 to $370, depending on factors such as whether you choose to reserve your business name and whether you choose expedited filing.

Note that fees change over time, so you should check the District of Columbia Secretary of State website for the most recent fee schedule.

Additionally, in the District of Columbia, LLC owners must obtain a Certificate of Occupancy before acquiring space for their office.

This application can be filled out online and must be approved by the government before an office space can be leased. You can view the full requirements on the DCRA website.

If you run your LLC out of your D.C. home (regardless of whether you own or rent), you’ll need a Home Occupation Permit (“HOP”). Follow the instructions on the DCRA site for applying.

These permits are only for residentially zoned buildings.

When starting a business, there are different types of companies you can choose from. Many small businesses opt to form an LLC because of the flexibility this business type offers.

An LLC makes it easy to keep your business assets and liabilities separate from personal accounts. This type of company also offers tax benefits. Lastly, forming an LLC is relatively easy and can be done quickly, even by first-time businesses.

Here are the primary benefits of setting up an LLC in the District of Columbia:

• Separation of your LLC’s business finances and liabilities from all members’ personal finances and debts.
• Exemption from double taxation. With an LLC, you’ll only be required to pay federal income taxes on the business’s profits on your personal taxes, rather than being taxed at both the business and personal levels.
• Flexibility to structure and manage your LLC how you choose, offering better adaptability for small businesses than corporations.
• Very few reporting requirements compared to corporations.

Would you like to learn more about the LLC business structure? Get the full scoop in our comprehensive guide on LLCs.

The processing time for your LLC will vary depending on how your Articles of Organization are filed. If you apply online, expect your request to take anywhere from five to seven business days.

If you file via mail, it can take up to three weeks.

The District of Columbia has options for expediting your filing for an additional fee.

If you’re in a hurry to form your LLC and don’t want to jump through the hoops of D.C.’s expedited filing processes, we can handle it for you with our faster filing speeds service.

While there are many forms you will need to file with the District of Columbia, when setting up your LLC, you do not need to file your operating agreement.

This agreement will help detail how your LLC is run and managed but does not have to be provided to the government since it is not required by law.

Before deciding how your LLC should be taxed, it’s important to weigh your options. 

Most LLC owners opt to have their business taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs).

This method only requires owners to pay taxes on their percentage of the profits on their personal tax returns. The company itself is not taxed.

This avoids the “double taxation” that corporate shareholders pay, in which profits are taxed both at the business level and the personal level.

For certain LLCs, it may make more sense to be taxed as a corporation. A qualified accountant can help you determine what’s best for your LLC.

As mentioned above, forming an LLC has many tax benefits, such as exemption from double taxation. However, you’ll want to learn how your LLC will be taxed in D.C. and what decisions you’ll need to make to keep your company tax compliant.

Although tax rules for LLCs are pretty straightforward, many LLCs opt to work with a trusted accountant or tax specialist to ensure they’re following all tax laws required in the District of Columbia.

We’ll walk you through a few federal and D.C.-specific tax requirements for LLCs:

• All LLCs formed in the District of Columbia must register with the D.C. Office of Tax and Revenue, which is also a prerequisite for getting the mandatory Basic Business License. This must be done online.
• LLCs with a gross income of more than $12,000 will be expected to pay a franchise tax. This tax is calculated at a flat rate, but there is a minimum $250 franchise tax. You’ll have to pay this tax to the Office of Tax and Revenue.
• You might opt to be taxed as a corporation. If you do, you’ll be required to fill out and submit an 8832 tax form as a C corporation and Form 2553 as an S corporation. Each year, you’ll be required to file your D.C. and federal business tax return by detailing all of your business investments, profits, losses, expenses, and employee wages. Your personal income will be detailed separately on your individual tax return.
• You’ll also be responsible for making estimated quarterly tax payments each year. Doing this will help you avoid tax penalties at the end of the year. You can pay your D.C. and federal taxes online. In addition, if you have employees, you’ll need to set up withholding accounts to collect federal, D.C., Social Security, and Medicare taxes from their wages. You’ll be responsible for submitting these withholdings to the IRS. You can do this by setting up a wage withholding account online via the Office of Tax and Revenue.
• Finally, if your LLC sells items or services that warrant sales tax, you’ll want to set up a sales tax account via the Office of Tax and Revenue by registering for a MyTax.DC.gov account.

Also available to you is our Free Accounting Assessment to help determine your bookkeeping, accounting, and tax needs during your first year of business.

Some states permit what is called a Series LLC. A Series LLC refers to one or more LLCs that are nested under a parent LLC.

This business structure can be appealing to many investors or entrepreneurs. In the District of Columbia, you’re allowed to form a Series LLC.

Before doing business in the District of Columbia, all LLCs must have a Basic Business License (BBL).

There are several prerequisites for getting a BBL, including having your Articles of Organization approved, registration with the Office of Tax and Revenue, an EIN, and either a Certificate of Occupancy or Home Occupation Permit.

You can apply in person, by mail, or online. The fees will depend on what category your business falls into.

In addition to the BBL, your LLC may need other federal, local, or industry-specific licenses and permits, so you’ll have to research your business’s needs.

The DCRA also has a page with information on licensing in D.C. 

You’ll need to make sure your LLC has all the licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal and local levels, there’s no central place to check to see if you have all the licenses and permits you need. You’ll have to do some research.

If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.

The insurance your business will need depends on a variety of factors, such as whether you have employees or have company vehicles.

D.C. requires your business to have workers’ compensation insurance if you have at least one employee. For more on what types of insurance your company may need, visit the District of Columbia Department of Insurance, Securities and Banking.

A couple of terms you may have come across are “foreign” and “domestic” LLCs. A foreign LLC is a company that was created outside of the District of Columbia that carries out business and services in the D.C. territory. 

A domestic LLC is one that was formed in the District of Columbia and carries out business and services in the D.C. area. 

It’s important to always register your LLC in the state or territory where you intend to conduct business.

Over time, your operation might change. You may have new members join, decide to switch your registered agent, or adopt a new business name.

Whenever there’s a substantial change to your business, you’ll need to file an amendment with the District of Columbia government.

Follow the below steps for each change you need to report:

Change your registered agent’s information

• To update your registered agent’s address or remove and add a new registered agent, you’ll need to fill out a Certificate of Amendment.
• This will allow you to update your registered agent’s name and/or address.
• You’ll be required to pay a fee for each amendment.

Change your LLC name

• To update your LLC name, you’ll need to register a new one by filling out the Name Registration and Renewal form. Be sure you follow all the directions in step one of this guide to ensure your new name is available.
• You’ll be required to pay a fee for this name change.

Add or remove an LLC member

• To update your LLC’s member list, you’ll need to fill out a Certificate of Amendment.
• This will allow you to update all member names and information.
• You’ll be required to pay a fee for each amendment.

To avoid substantial fees, try to make all updates at one time, so you’re only amending your Articles of Organization once.

In addition to amending your documents with the District of Columbia government, you should also update your operating agreement to reflect the new changes.

Your D.C. biennial report is due every other calendar year by April 1. This form asks for the name of your LLC, the state or territory where it was formed, your principal operating address, your registered agent’s name and address, a brief statement of business conducted in the past two years, details on all members, and your signature. 

You can submit this form online via the District of Columbia business portal or via mail. You’ll be required to pay a filing fee and an additional fee if your report is late.

We can help you with your biennial report in a couple of ways. Our annual report service will help you file your biennial report, and our Worry Free Compliance service not only helps with filing your biennial report, but also sends you other important compliance reminders and helps you with two amendment filings each year.

You might find that you need to dissolve your LLC. Whether you’re forming a new business or closing your doors, to end your LLC, follow the below steps:

First, you’ll need to transfer or close any LLC financial accounts. Always do this first because once your LLC is dissolved, it can be difficult to access these accounts.

Reach out to the District of Columbia Office of Tax and Revenue to determine if there are any steps you need to take to officially dissolve your LLC. Your accountant can also help with this process.

Lastly, you’ll need to file your Statement of Dissolution with the District of Columbia government. This form disbands the company you initially formed when filing your Articles of Organization.

You’ll need to pay a fee when dissolving your LLC. You can file and pay online or through the mail.

For more information, visit our District of Columbia business dissolution guide.