Forming an LLC in the District of Columbia

Here is an outline of the steps you need to follow in order to form an LLC in the District of Columbia. You should also read the general section on forming an LLC for information that is applicable in any state.

1. Choose a business name for the LLC and check for availability.

• Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.

• DC law requires an LLC name to contain the words "limited liability company" or the abbreviation "L.L.C." or "LLC". Additionally, your business name may not contain the words "Corporation", "Incorporated", "Limited Partnership", or the abbreviations "Corp.", "Inc.", or "L.P.", and may not be the same as, or deceptively similar to, that of any other foreign or domestic LLC, corporation, or limited partnership (including registered "fictitious" names).

• Although you are not required to do so, consider registering your business name as a federal and/or state trademark.

2. Prepare and file articles of organization with the Department of Consumer and Regulatory Affairs.

• The filing fee is $165, including a $150 basic filing fee and a 10% technology fee. The Department of Consumer and Regulatory Affairs website has a sample articles of organization for a District of Columbia LLC -- you basically need to fill in the blanks. The website also has a helpful online registration interface to guide you through the filing process. At Step 1, choose "Limited Liability Company" in the pull-down menu for organization type.

• If the LLC will be managed by one or more managers, rather than all the members together, then you should put a clause saying that in your articles of organization. For general information on articles of organization, see the Articles of Organization page.

3. File a Written Consent to Act as a Registered Agent form with the Department of Consumer and Regulatory Affairs.

• The Department of Consumer and Regulatory Affairs website has the required form for you to fill out.

4. Negotiate and execute an operating agreement.

• The District of Columbia does not require an operating agreement in order to form an LLC, but executing one is highly advisable. There is no set criteria for the content of an operating agreement, but it typically includes topics such as how meetings are conducted, how the company will be managed, what capital contributions are required from each member, and how profits and losses will be allocated. The operating agreement does not need to be filed with the state. Please see the Operating Agreement page for details.

5. Obtain any required local licenses.

• The District of Columbia issues what is known as a Basic Business License (BBL) to new local businesses. The Department of Consumer and Regulatory Affairs website has a helpful Basic Business License Information page, which includes an online interface to help you determine whether you need a BBL.

6. Determine what tax and other regulatory obligations the LLC has, and take care of any necessary registrations.

• Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.

• Register for District of Columbia business taxes using the FR-500 Combined Business Tax Registration service. This service will tell you what taxes you will be responsible for (including income and employment taxes), guide you to what forms you will need to file, and tell you when they must be filed.

• Whenever you hire an employee in the District of Columbia, you must inform both the IRS and the District of Columbia. The IRS details all of the necessary steps to complete, including verifying work eligibility and withholding allowances certificates, on its page entitled Hiring Employees. Information on what to do on the District level will be detailed when you register for taxes using the FR-500 Combined Business Tax Registration service.

• If you have employees in the District of Columbia, you must carry workers' compensation insurance.

• There may be other informational returns that you may have to file annually or semi-annually with both the IRS and the District. For more information, check out the IRS Guide To Information Returns and the DC Business Resource Center's Report Requirement and Deadline Generator.

7. Open a bank account for your business.

• It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN), a copy of the articles of organization, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.

• DC LLCs must file a Two-Year Report with the Department of Consumer and Regulatory Affairs every two years. The filing fee is $150.
• The District of Columbia requires certain documents to be kept at an LLC's principal place of business. A list of the required documents is located in D.C. Code Ann. § 29-1022 (link is to entire D.C. Code; click through to Title 29, Chapter 10, then locate the specific provision).