Washington DC LLC Guide | A Comprehensive Write-up For Beginners

When it comes to business it’s better to have a clear knowledge of the one you really would like to venture into. Every business is a step by step process, it not something that you will just sit down at your home and decide what to do and it will come to pass without hard work and stress.

Every successful business you see today started somewhere and truly, some of the business owners now can really boast that their business has gone far and wide. So, you too can be like them, if you really want to make a positive change in your business.

Do you know that forming an LLC is the simplest way of structuring your business to protect your personal assets in case your business is sued?

Washington DC LLC Guide

Now, you have an idea of why you should start an LLC in Washington DC.

A limited liability company (LLC) is a business entity that offers certain legal protections and rights to its owners. An LLC is either a corporation or a sole proprietorship/partnership.

Washington DC LLC Information

Forming LLCs in Washington DC is affordable and easy. Unlike other states, the State of Washington DC has some unique LLC requirements.

Interested parties must register with the DC Department of Consumer and Regulatory Affairs by filing the necessary forms, paying the necessary fees, and meeting all naming and formation requirements.

The specifications required of a Washington DC LLC are:

1. Name Your District Of Columbia LLC

Choosing a company name is the first and most important step in starting your LLC. Be sure to choose a name that complies with District of Columbia naming requirements and is easily searchable by potential clients.

1. Follow The Naming Guidelines For A DC LLC:

  • Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
  • Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
  • Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.

2. Is The Name Available In District Of Columbia?

Make sure the name you want isn’t already taken by doing a name search on the District of Columbia website.

2. Choose A Registered Agent In The District Of Columbia

You are required to nominate a Registered Agent for your District of Columbia LLC.

What Is A Registered Agent?

A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, a notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business’s point of contact with the state.

Who Can Be A Registered Agent?

A registered agent must be a resident of the District of Columbia or a corporation, such as a registered agent service, authorized to conduct business in the District of Columbia. You may elect an individual within the company including yourself.

FAQ: Nominating A Washington D.C. Registered Agent

Can I Be My Own Registered Agent?

Yes. You or anyone else in your company can serve as the registered agent for your LLC.

Is A Registered Agent Service Worth It?

Using a professional Registered Agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.

3. File Your Washington D.C. LLC Articles Of Organization

To register your LLC, you will need to file the Articles of Organization with the Department of Consumer and Regulatory Affairs. This can be done online, by mail, or in-person. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.

The DC Articles of Organization for an LLC (Limited Liability Company) is a legal document to officially form your business. You’ll be expected to include the name of your LLC, choose a registered agent, list the services your LLC will offer, and pay the state filing fee. We also recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account.

FAQ: Filing LLC Documents

What Is The Processing Time To Form My DC LLC?

5 to 7 business days online, up to 3 weeks by mail, but maybe expedited for an additional fee.

What Is The Difference Between A Domestic DC LLC And Foreign LLC?

An LLC is referred to as a “domestic LLC” when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.

4. Create Your Washington D.C. LLC Operating Agreement

An operating agreement is not required in the District of Columbia, but it’s a good practice to have one.

What Is An Operating Agreement?

An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

RECOMMENDED: Nevada LLC Guide | A Comprehensive Write-up For Beginners

Why Are Operating Agreements Important?

A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

FAQ: Creating An Operating Agreement

Do I Need To File My Operating Agreement With The State?

No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.

5. Get A Washington D.C. LLC EIN

What Is An EIN?

EIN stands for Employer Identification Number. EINs is a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a social security number for a business.

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why Do I Need An EIN?

An EIN is required to:

  • Open a business bank account
  • File and manage Federal and State Taxes
  • Hire employees

Where Do I Get An EIN?

You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

NOTE

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN.

FAQ: Getting A Washington D.C. LLC EIN

How Do I Get An EIN If I Don’t Have A Social Security Number?

A social security number is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at (267) 941-1099 to complete your application.

What Tax Structure Should I Choose For My Washington D.C. LLC?

When you get an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.

However, some LLCs can reduce their federal tax obligation by choosing the S corporation (S corp) status. To learn more, read our LLC vs S Corp guide.

6. Cost To Form An LLC In Washington D.C.

To start a Limited Liability Company in the District of Columbia, you will need to file the Articles of Organization with the DC Department of Consumer and Regulatory Affairs, which costs $220. You can apply online, in-person, or by mail. The Articles of Organization is the legal document that officially creates your DC LLC.

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