How much does an LLC cost in Washington DC? (details)
Forming a Washington DC LLC entails more than just paying the first filing fee; it doesn't have to be extremely expensive.
We outline all up-front and continuing costs for a Washington DC LLC and advise how to successfully cut these out of the budget.
How Much Does It Cost to Start an LLC in Washington DC?
There is a $99 filing fee for the Articles of Organization with the Department of Licensing and Consumer Protection when forming an LLC in Washington DC.
This is important in creating your LLC's legal standing, allowing it to function under Washington DC regulations if approved.
Apart from the LLC filing fee mentioned above, additional expenses are associated with establishing a Washington DC LLC (Limited Liability Company).
Costs of Forming a Washington DC LLC
Forming an LLC includes a one-time state filing fee of $99.
There are also ongoing fees (like a $300 Biennial Report fee), which we discuss below.
LLC Costs in Washington DC
| Requirement | Cost |
|---|---|
| LLC Name | $0 |
| Registered Agent | $0 or $125 per year |
| Articles of Organization | $99 |
| Tax Registration | $0 |
| Certificate of Occupancy or Home Occupation Permit | $72.60 |
| Basic Business License | $200 - $500 (every 2 years) |
| Operating Agreement | $0 (free on our site) |
| EIN Number | $0 (free to the IRS) |
| Biennial Report | $300 (every 2 years) |
| Taxes | varies (filed and/or paid every year) |
The filing fee for a Washington DC LLC Articles of Organization is $99
In Washington DC, forming an LLC requires paying the Department of Licensing and Consumer Protection a $99 filing fee for the Articles of Organization. This paper creates your LLC legally if it is accepted.
After formation, you only need to pay the $99 one-time charge; after that, you won't need to pay any more monthly or yearly fees to keep your Washington DC LLC active.
✎ Note:
LLCs represent the predominant business structure in Washington DC , chosen for their robust liability protection afforded to owners, making them highly favored among business entities.
The form used to establish an LLC can vary by state; it may be called the Articles of Organization.
In Washington DC, it is specifically known as the Articles of Organization. Despite these variations in naming, they all serve the same purpose to create your LLC legally.
Reserving a business name in Washington DC entails a fee of $0
The creation of your Washington DC LLC Name Reservation is completed simultaneously if you want to file online. An additional $0 filing fee is required for an online name reservation when filing online.
Remember to include the Name Reservation with your application if you want to file by mail.
But before forming your LLC, you have to wait for the Name Reservation to be approved. Even though filing by mail can save you a few bucks, it can take longer to form your LLC.
Washington DC Registered Agent Fee ($0 to $125/ annually)
Under Washington DC law, every LLC formation requires the appointment of a Registered Agent.
Your Washington DC Registered Agent acts as the liaison for legal documents and state notifications on behalf of your LLC, necessitating a physical address within the state and availability during regular business hours.
You can appoint yourself, a trusted associate, or a family member as your Registered Agent without incurring additional expenses.
Alternatively, hiring a Registered Agent service costs between $100 and $300 per year. These services offer additional business support and safeguard your privacy.
Hiring a Registered Agent service is a good idea if:
- You lack a physical address in the state (Washington DC law mandates Registered Agents to have an address within the state).
- You prefer to keep your address private (some companies allow you to use their address for confidentiality).
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Washington DC Tax Registration ($0)
After your Washington DC LLC is approved, you must register for taxes with the Office of Tax & Revenue (OTR). The form for tax registration is called the FR-500.
There is no cost associated with this tax registration ($0).
Certificate of Occupancy or Home Occupation Permit ($72.60)
Every Washington DC LLC must have either a Certificate of Occupancy or a Home Occupation Permit.
A Certificate of Occupancy is used for a commercial building and a Home Occupation Permit is used for a residential building.
If you’re renting office space you can most likely use the Certificate of Occupancy that’s already in place for the building, but if you’re developing a new commercial space or you already own a commercial building, then you’ll need to apply for your Certificate of Occupancy.
The cost for a Certificate of Occupancy starts at $72.60, but it may be higher depending on the building's square footage.
LLC Operating Agreement Fee ($0)
A Washington DC LLC Operating Agreement functions as a written contract among the LLC's members. It outlines specific details regarding ownership, how the LLC is managed, and the distribution of profits.
Both Single-Member and Multi-Member LLCs should create an Operating Agreement, maintain it within their business records, and provide each member with a copy.
Online services generally charge between $50 to $200 for crafting an LLC Operating Agreement.
LLC EIN Number Fee ($0)
An EIN, also referred to as an Employer Identification Number or FEIN (Federal Employer Identification Number), is essential for handling tax filings, setting up an LLC bank account, and potentially facilitating employee hiring.
While some platforms may charge a fee, you can obtain an EIN for your LLC free of charge directly from the IRS. The process to apply online is simple and typically takes only a few minutes to complete.
Washington DC LLC Biennial Report ($300 every 2 years)
All LLCs in Washington DC must file a Biennial Report every two years. The fee for filing the Biennial Report is $300.
The LLC Biennial Report must be filed to maintain your LLC's good standing within the District.
✎ Note:
In other states, LLCs may be required to file Annual Reports each year. In DC, however, LLCs are only required to file a Biennial Report every two years.
Washington DC Business License and Permit Fees
The locations and industry sectors in which your LLC operates in Washington DC may require you to apply for additional business licenses or permits. For your LLC's specific operating area, for example, it may be necessary to obtain a city business permit.
Location and industry specifics can affect the cost of these licenses or permits. These costs are usually fair. Local governments such as towns, cities, or counties are responsible for administering some licenses and permits, while the state issues others.
LLC Taxes
Washington DC LLC owners face a range of tax obligations, leading to varying annual costs.
Some of the taxes LLC owners pay include:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns property)
The Taxes of Your Washington DC LLC taxes are affected by your industry and business activities, making it difficult to predict. Every business is different, and the taxes your LLC owes depend on your specific situation.
✎ Note:
Typically, a Single-Member LLC is taxed similarly to a Sole Proprietorship, while a Multi-Member LLC is taxed similarly to a Partnership.
Hiring an Accountant
Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings.
The best person to help you determine your small business tax liability in Washington DC is a certified accountant.
While accounting costs can vary, you should generally budget $300 for simple tax returns and up to $900 for more complicated filings annually.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
(Find out why Northwest is the top choice for LLC formation)
✎ Note:
Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings. We recommend speaking with a few Washington DC accountants to make sure they can help you with all of your local, state, and federal tax needs. For more advice, see our comprehensive guide on how to find an accountant.
Washington DC Department of Licensing and Consumer Protection
If you're curious about the expenses involved in starting a Washington DC LLC, feel free to contact the Washington DC Department of Licensing and Consumer Protection for detailed information.
Washington DC LLC Costs FAQs
How much does it cost to open an LLC in Washington DC?
It costs $171.60 plus the cost of the Basic Business License to start an LLC in Washington DC. This includes the one-time filing fee for the LLC Articles of Organization ($99) plus the fee to obtain the Home Occupation Permit or Certificate of Occupancy ($72.60).
All DC LLCs need a Basic Business License, but the cost varies depending on what type of business your LLC does. So the total cost of starting a District of Columbia LLC is at least $171.60, plus the cost of your LLC’s Basic Business License.
And depending on what your LLC does, you may need to obtain business insurance. The cost of this varies.
How much does an LLC in the District of Columbia cost per year?
There are no annual fees in Washington DC. However, there are two types of bi-annual fees (costs that are paid every 2 years).
All Washington DC LLCs need to pay $300 every two years for the Biennial Report. All District of Columbia LLCs have to pay ongoing fees for Biennial Reports to remain in good standing.
Your Washington DC LLC Basic Business License must be renewed every two years. So you’ll pay the business license fee every two years as well. Remember, this fee varies depending on what type of business your LLC does.
If you hired a Registered Agent service, you’ll have an annual subscription fee to pay each year. This is usually about $125 per year.
Should I hire an LLC formation service?
You aren’t required to hire a professional service company to form your District of Columbia LLC. You’re allowed to form your LLC yourself if you’d like. If you do it yourself, you’ll only pay the Washington DC LLC filing fee, not any service fees to a filing company.
Do I need to hire an attorney to form an LLC?
No, you aren’t required to hire an attorney to form your District of Columbia LLC. You’re allowed to complete the LLC formation process yourself if you’d like.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form an LLC (we can’t say for sure what the minimum fee would be, since every attorney charges differently).
How do I start an LLC in Washington DC?
Here are the steps to starting an LLC in the District of Columbia:
- Choose an LLC business name and make sure it’s available
- Choose who will be your DC Registered Agent
- File the District of Columbia LLC Articles of Organization
- Complete and sign an Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- File your DC LLC Tax Registration
- Obtain a Certificate of Occupancy or Home Occupation Permit
- Get the DC Basic Business License
- Open an LLC bank account
What’s the cheapest way to start District of Columbia LLCs?
You can get an LLC cheaply by filing your formation documents yourself. You’ll also save money by being your Registered Agent and using our free LLC Operating Agreement template.
By forming your LLC yourself, being your Registered Agent, and using our Operating Agreement template you can save over $400.
Keep in mind, just because a certain state has cheap LLC fees doesn’t mean it’s a good idea to form your LLC there. There are usually disadvantages to forming an LLC out of state. Check out what’s the best state to form an LLC for more information.
How long does it take to get an LLC in Washington DC?
How long it takes to get an LLC in the District of Columbia depends on how you file your Articles of Organization.
You can get an LLC in Washington DC approved in 5 business days if you file online. On the other hand, filing by mail takes about 2-4 weeks (plus mail time).
How much does a District of Columbia business bank account cost?
It varies. Some banks charge monthly fees ($10 to $20 per month), but these can sometimes be avoided by meeting certain requirements. For example, if you make a certain number of direct deposits or maintain a specified minimum balance, then they’ll waive the monthly fees.
And you might be able to find a bank that doesn’t charge any monthly fees.
Before you open your LLC business bank account, we recommend calling and asking if there are ways to avoid the monthly maintenance fees. You can learn more about LLC bank accounts in our guide.
How much is a Foreign LLC in Washington DC?
A Foreign LLC is an LLC formed in another state that must register (aka Foreign Qualify) in Washington DC. This is because the LLC is doing business in both states.
The District of Columbia Foreign LLC cost is $99. This is the fee to register an LLC in DC after it’s been formed in another state.
If you form an LLC in Washington DC, it is called a “Domestic LLC”. If you formed your LLC in another state, it would be a Foreign LLC once you register it in the District of Columbia.
Is Washington DC a good state for an LLC?
The most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in Washington DC, then you should start your business in Washington DC. While many websites talk about tax rates and the advantages of certain states, none of that applies if it’s not the state where you live and do business. And just because a certain state has cheaper LLC fees doesn’t mean it’s a good idea to form your LLC there.
For example, if you form an LLC in Delaware but live in and conduct business in Washington DC, you’ll also need to register your Delaware LLC in Washington DC (and pay fees). And you’ll end up paying Washington DC taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you are a Washington DC resident, then yes, Washington DC is the best state to form an LLC. If you don’t live in and do business in Washington DC, then no, Washington DC probably isn’t a good state to start an LLC.