Want to join the 2,494,279 small businesses in  District of Columbia? Then look no further. With a state filing fee of [] and a low cost formation service like ZenBusiness, starting your LLC in  District of Columbia today is easy.

A limited liability company (LLC) is one of the ways that you can structure a business in the state of  District of Columbia. This popular business structure provides limited liability, similar to a corporation, but with much less formality than a sole proprietorship or partnership.

When you form an LLC, it is a separate entity from the owners, which means that the members of the LLC (what the owners of an LLC are called) are protected from personal liability. Members can’t be held personally responsible for business debts or liabilities of the LLC.

In fact, a creditor can’t come after a member’s personal assets like their house, bank accounts, etc.) just to settle a business debt. This level of protection for the LLC members makes it a very wise decision if starting a business in  District of Columbia.

Another advantage with this business structure is that the income isn’t taxed at the entity level, but you will need to complete a tax return for the LLC if there is more than a single member. Any income or loss is passed through to the member or members. Each member will then need to report that income or loss on their personal tax returns.

So, let’s discuss exactly how to start an LLC in  District of Columbia.

How do I create an LLC in  District of Columbia?

Creating a  District of Columbia LLC is a pretty simple process that involves paperwork with the  District of Columbia Division of Corporations.

We’ll walk you through it step by step to make sure you understand exactly what you need to do to create a  District of Columbia Limited Liability Company.

Once you’ve read through it all, you will be all ready to get your LLC created and business running in  District of Columbia.

As a brief overview, below are the six steps for  District of Columbia LLC formation:

  1. Name Your Limited Liability Company
  2. Choose a Registered Agent
  3. File an Articles of Organization
  4. Create an LLC Operating Agreement
  5. Get an EIN
  6. File an Annual Report

Step 1: Name Your Limited Liability Company

The first thing you need to do is decide on a name for your  District of Columbia LLC. In the state of  District of Columbia, you must include the words “Limited Company” or “Limited Liability Company” or the abbreviations “L.C.” or L.L.C.” You can also shorten “Limited: to “Ltd.” and “Company” to “Co.”

You will want to make sure that the name you choose is unique and distinguishable from the other business names already on file with the  District of Columbia Division of Corporations.

Once you think you have the right name for your  District of Columbia LLC, it’s probably a good idea to go ahead and check the business name database to make sure it is available. Hopefully yours isn’t taken yet! You can search the records on the  District of Columbia Division of Corporations website.

Did you know that you don’t have to use your LLC’s legal name that is registered in the articles of organization when you do business? Well, you don’t! You can use a fictitious business name or “DBA,” which is short for “doing business as.”

You just need to register your fictitious name with the  District of Columbia Department of State, Division of Corporations either online or through the mail. Keep in mind that this will cost you $50 as a filing fee, but the registration lasts five years.

Tips for Selecting an LLC Name

  • The name must be unique. It can’t be the same as another LLC or corporation on file
  • It shouldn’t be similar to the name of another LLC or corporation
  • If you try to add “the” or “and” or “&” to distinguish it from another similar name, that won’t work
  • Adding the words “of  District of Columbia” or a city’s name will not make it distinguishable from another similar name
  • The LLC name can’t imply that it is connected to a government agency

Foreign LLCs

A foreign LLC is required to register with the  District of Columbia Division of Corporations if it intends to conduct business in  District of Columbia.

A foreign LLC will need to make sure the current LLC’s name is available in  District of Columbia, and if it is not, then it must use a different name in the state of  District of Columbia.

The foreign LLC must include a copy of the consent of the managers or members of the LLC adopting the alternate name.

Step 2: Choose a Registered Agent

When you want to form an LLC and you have a name selected, you will need to appoint a registered agent for your LLC.

The registered agent can accept legal papers and tax documents on behalf of the LLC and notify members of the LLC. This is a service provided by an “agent” of the LLC “registered” with  District of Columbia, which is why this person is called a “registered agent.”

A list of specific services a registered agent may perform are:

  • Receiving legal documents and forwarding them to LLC members
  • Receiving franchise tax and annual report forms and forwarding them to LLC members
  • Accepting and forwarding service of process

So who can be the registered agent?

You can choose an individual person or a business entity to be the registered agent. You can even choose to appoint yourself! Just make sure that the registered agent has a physical street address in  District of Columbia.

You will also want to make sure that the registered agent is available during business hours since they may be receiving important documents.

The registered agent for the LLC must have a valid street address within  District of Columbia and be available during normal business hours to receive documents. A P.O. box will not suffice as it must be a physical address.

If you are forming an LLC and don’t meet the requirements mentioned above to be the registered agent, you can always pay a professional registered agent to provide the service for you.

Our top choices are:

Step 3: File an Articles of Organization

When we are talking about how to start an LLC in  District of Columbia, the action that creates the LLC is the filing of articles of organization, which are filed with the  District of Columbia Division of Corporations. The articles of organization include the basic details of your company. These business details include:

  • the street and mail address of the LLC’s principal office
  • the name, address, and signature of the LLC’s registered agent
  • the names and addresses of the LLC’s managers
  • the effective date of the LLC
  • signature of a member or authorized representative

Your business articles of organization will be reviewed and could be rejected. However, articles of organization are usually rejected if there is an issue with the name you chose for your LLC. It’s important to make sure that the name of your  District of Columbia LLC is distinguishable and not similar to any other names currently on file.

Step 4: Create an LLC Operating Agreement

Once you’ve got your articles of organization, you need to establish an operating agreement.

What are LLC operating agreements?

An operating agreement is a legal document that establishes how the  District of Columbia LLC will be managed. It outlines the responsibilities as well as the rights of the members and managers of the LLC.

Here’s an idea of some of the information operating agreements could contain:

  • The names and responsibilities of the members and managers of the LLC, including the ownership percentages
  • Signatures of the members and managers of the LLC
  • Profits and losses of the LLC, as well as any distribution of money, banking resolutions, taxes, or other legal agreements
  • A statement of value for any property or services that members of LLC contribute
  • If any additional contributions made by members will occur, including the details of when
  • Details as to what would happen if the limited liability company were to be dissolved

Not all states actually require you to create an operating agreement for your LLC.  District of Columbia is one of those states, in fact. Among the few states that require one are California, Delaware, Maine, Missouri, and New York.

However, it is generally advised that you set up an operating agreement even though it’s not required for a  District of Columbia LLC. If you do establish an operating agreement (which, again, we highly recommend), it will be recognized as a governing document by the state of  District of Columbia.

If it’s not required for forming an LLC in  District of Columbia, why do you need one?

Even though it’s not required, creating an operating agreement is a very important aspect of LLC formation. If your  District of Columbia LLC has more than one member, it’s a good idea to have an LLC operating agreement in writing so that each person knows the expectations of the LLC.

Since things like responsibilities and contributions are clearly outlined in the operating agreement, this document can help to prevent any conflict between managers and members for multi member LLCs.

Step 5: Get an EIN (Employer Identification Number)

What is an EIN?

An EIN is short for Employer Identification Number. It’s a nine-digit number that the Internal Revenue Service issues to identify a business entity. It’s also used when a business files taxes. An EIN is often compared to a social security number ,just for a company rather than an individual.

As a business entity, you will need and EIN for several reasons, namely to file Federal and State taxes, establish a business bank account, and hire employees.

If you have more than a single member in your LLC, then the LLC will need to get its own EIN from the IRS. If your  District of Columbia LLC consists of only one member, you will only need to obtain an EIN is 1) it will have employees or 2) you choose to have the LLC taxed as a corporation rather than a sole proprietorship.

To obtain an EIN, you will need to request one from the IRS, either online or through the mail, once your company is formed. The good news is that the IRS doesn’t charge anything to get an EIN.

Step 6: File an Annual Report

To maintain an “active” status, your  District of Columbia LLC will need to file an annual report. While this is not necessarily one of the steps required to form an LLC in  District of Columbia, it is something you will need to do each year as maintenance for your LLC.

You can file the annual report online anytime between January 1 and May 1. Filing the annual report for your  District of Columbia LLC will cost $138.75. If you are late filing it, a late fee will be most likely added on. It’s a good idea to make sure you routinely check the email address you used when filing your LLC, because that is the email address the reminder notices for submitting your annual report will be sent.

How much does it cost to start an LLC in  District of Columbia?

According to the  District of Columbia Division of Corporations, for a new  District of Columbia LLC the filing fee is {

Filing the paperwork to set up your  District of Columbia LLC yourself is going to save you money and be the cheapest route to go.

But, this does mean that you will need to spend time completing all the right forms and filing them appropriately, which can sometimes become complicated.

If you choose to hire a lawyer to assist you, it will cost a lot of additional money. Generally, attorneys charge several thousand dollars to provide this service for you.

Alternatively, there are online services like ZenBusiness that can assist for a fraction of the cost. It really just depends on how much time you are willing to spend on it and how comfortable you feel completing the paperwork and filing it all yourself with the state of  District of Columbia.

How long does it take to form an LLC in  District of Columbia?

Depending on how you pay the filing fee and how quickly the state processes the filings for your  District of Columbia LLC will determine the amount of time it takes for the LLC to be officially formed.

Of course, the time it takes to process the LLC will vary. On average, you can usually expect it to take between two and 14 business days in the state of  District of Columbia.

What is the average cost to set up a  District of Columbia LLC?

The average cost to set up a  District of Columbia LLC really depends on the way you set it up. There is the $125 filing fee, but if you choose to use a lawyer or an LLC formation service to set up your  District of Columbia LLC, the cost will increase.

It will increase dramatically if you choose to hire a lawyer since that can cost several thousand dollars rather than an affordable online service.

If you do not have an address in  District of Columbia, then you will be unable to serve as the registered agent of our LLC in  District of Columbia. However, if you know someone with an address in  District of Columbia, they can serve as your LLC’s registered agent.

This is a great way to save money when setting up your  District of Columbia LLC. If you or someone you know does not have an address in  District of Columbia, you will need to hire a professional commercial registered agent. This fee can range from $100 to $350 per year.

It’s important to also keep in mind that once your LLC in  District of Columbia is set up, you will have ongoing fees you will need to pay, such as annual reports and franchise tax fees. These fees can vary, but are something to be aware of when looking at the overall cost to set up a  District of Columbia LLC.

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