If you’re looking to start an LLC in the United States, there’s no place better than Washington DC. DC is home to a vibrant startup community with a strong emphasis on tech companies. The fact that it is the capital city and promotes a positive business culture attracts entrepreneurs from all over the United States.
Forming an LLC in DC is relatively straightforward and can be done in just a few days. This article will take you through the essentials of forming an LLC in Washington DC.
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Determine your company’s name
First and foremost, you’ll need a name for your business. Choosing a name for your Washington DC-based LLC is not something you want to rush. In fact, you have to take your time to find a name that people can easily pronounce and remember, speaks about the benefits of your business, and has a positive connotation for your potential customers.
Bear in mind that your business name must include the phrase Limited Liability Company. And also that it shouldn’t be similar-sounding to the name of any existing business in the district.
Once you have chosen a name, you can check whether it’s available on the Washington DC Register of Business Names. For more information, you can always check the District of Columbia Name Requirements website.
Register your LLC in Washington DC
You’ll first need to form your LLC with the Washington DC Department of Consumer and Regulatory Affairs. Here’s what you’ll need:
- A completed Statement of Information form
- A name check document (included with the Statement of Information form)
- Your LLC’s Federal Tax ID number (which you’ll get from the IRS). If you don’t yet have an IRS number, you can apply for one online or by phone.
- Fees to register your company that are paid either through money order or check.
Once you have these, you can submit the Statement of Information form to DCRA either in-person or by mail.
Get business insurance
Washington DC doesn’t require businesses to get any specific business insurance, but if you’re ever in a position where your customers or employees rely on you for financial support in the event of an accident, it’s never a bad idea.
The reality is that accidents happen no matter how much we try to avoid them, and when they do, we need to be financially sound enough to support ourselves. You can even get fast and simple Washington business insurance online to protect yourself from lawsuits. If you are sued for damages, your insurance will cover you.
Request a Federal Tax ID Number from the IRS
To establish your LLC as a legal entity, you’ll need to obtain an Employer Identification Number (EIN) from the IRS. You can do so by submitting Form SS-4. Your EIN is used to identify your business for income tax purposes and will also be mandatory if you’re planning on hiring employees.
This number is also required if you’re planning on opening a business bank account. In fact, some banks won’t even let you open an account without it.
Get a business bank account
You are likely going to need a business bank account to receive income from your customers, pay suppliers and employees, and keep your personal finances separate. While you can technically open a business bank account without an EIN, it’s in your best interest to get one before you apply.
Once you have the EIN, you’ll need to request a new account from your chosen bank. You’ll be required to provide them with documents. Make sure that all of these documents are legible. If not, the bank may ask for additional copies or reject your application altogether.
Submit annual reports
Once you form your LLC in Washington DC, you’ll need to submit annual reports. This can be done by submitting an Annual Report of Officers on the Statement of Information form, which you’re required to file every year.
To ensure that your LLC remains in good standing with the district, it’s important to know when these forms are due — you’ll typically need to submit them within two and a half months of the anniversary of your LLC’s formation.
Setting up a business in DC can be complicated, but knowing what you’re up against can help you find the best way to get started.
The district has many requirements that you’ll have to meet before you officially form your business, but once you do, the hard part is over. As long as you give your new business the attention it deserves, all of this will be well worth it once you open up shop.