Start an LLC in Washington DC

First thing’s first: you’ve got to name your District of Columbia LLC. All business names need to be compliant with DC § 29-103.01 and 29-103.02, which means your LLC name needs to:

• Include an LLC indicator like “Limited Liability Company,” “Ltd. Co.” or the classic “LLC.”
• Be different from any other business name registered or reserved in DC.
• Not include words like “bank” or “insurance” without proper approval.

You can reserve a business name for 120 days by filing the Name Reservation Registration & Transfer (Form GN-3). This costs $50.

A Washington DC registered agent is a person or business who accepts legal mail on behalf of your LLC in person. They must be:

• Over 18 (if an individual and not a business)
• Available during regular business hours
• Able to accept important mail and get it to you in a timely manner
• Physically located in Washington DC

Your registered agent could be you, a member or manager, or someone outside of your LLC altogether—like a professional registered agent.

Filing your Articles of Organization with the DC Department of Licensing and Consumer Protection is the step that officially creates your LLC. If the DLCP rejects your Articles, your LLC is not legally formed.

Everything on this form will go on the public record.

You’ll need to provide:

• Business name. Remember to follow DC’s LLC naming laws.
• Registered agent information. This must include a physical address, not a PO box.
• Effective date. Most LLCs form as soon as the Articles are processed, but you can choose any date within 90 days of filing.
• 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. If you’re forming a series LLC, you’ll need to state that here.
• Member and manager information. Anyone who holds more than 10% membership interest or controls financial, operational, or day-to-day dealings must be listed.
• Organizer. Whoever files your Articles needs to provide a name, address, and signature. Hire Northwest to form your DC LLC and our information will go here.

An operating agreement is the rule book for your Washington DC LLC. You don’t have to have one, but most LLCs do. An operating agreement is a legally binding document, meaning once in place, it has to be followed. This might sound constrictive, but it’s a good idea to have a plan before the tricky stuff happens.

Your DC LLC operating agreement can include anything you want, as long as it’s legally sound. Typically, it has processes for voting, profit distribution, and dissolving your business. It is an internal document that doesn’t need to be shared with anyone outside your LLC except maybe your bank or loan provider.

Most people start an LLC in Washington DC to make money. You heard it here first! And if you make money, you need to put it somewhere and pay your taxes. To do either of those things, you’ll need an EIN (employer identification number). The EIN is the business version of a social security number.

To start a business bank account, you need to bring:

• the LLC’s EIN
• DC LLC Articles of Organization (a copy is fine)
• the LLC’s operating agreement
• an LLC Resolution to Open a Bank Account (if your LLC has more than one member)

You’ll also need to fund the LLC so you can do things like hire an employee or buy materials. Each member needs to make an initial contribution. The percentage of ownership in the LLC is directly correlated to how much they contribute. This is called membership interest.

Every business in DC needs at least one business license: the Basic Business License. To get yours, do the following:

1. File your Articles of Organization.
2. Get an EIN.
3. Register with the DC Office of Tax and Revenue.
4. Register with the Office of Zoning Administration if physically operating in DC.
5. File your Basic Business License application—which specific basic business license you need will be determined by your business activity.

It costs $6.60 per license. You must pay with a credit/debit card.

All Washington DC LLCs need to file taxes and reports. This is how you let the state and federal government know what your business is up to.

• Federal Taxes: DC LLCs are taxed as pass-through entities, so owners (members) will report the business’ earnings on their individual tax returns. This is taxed at the federal self-employment rate, 15.3%.
• DC Franchise Tax: LLCs in DC are subject to an annual franchise tax of 8.25%. For LLCs with $1 million or less in gross receipts, the minimum payment is $250. LLCs with over $1 million in gross receipts will owe at least $1,000.
• Biennial Report: Every two years, you’ll need to file a report with the DLCP to update them on your LLC owners and contact information. This costs $300. It is due on April 1st. Never miss a deadline when you hire Northwest to file your DC biennial report.
• Beneficial Ownership Report: Nearly every DC LLC needs to file a BOI Report within 90 days of formation. The report includes information on who owns and influences the business. It’s free to file and is stored in an internal federal database. You can file with FinCEN yourself or hire us to file for you ($9).

*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.