If you’re looking to set up a limited liability corporation (LLC) in the District of Columbia (DC) then read on to learn how to form an LLC and download a DC LLC operating agreement template.
Is an LLC Operating Agreement Required in DC?
An LLC operating agreement is and isn’t required in DC depending on how many members your LLC has. If you form a multi-partner LLC, state law requires you to write a detailed operating agreement. If you form a single-member LLC, the state doesn’t require the operating agreement but considers creating one as best practice. The state doesn’t mandate including the operating agreement in the filing with the Department of Consumer and Regulatory Affairs (DCRA), but you can include it.
DC Operating Agreement Laws
The requirements and instructions for filing and establishing an LLC in DC appear in Title 29 of the Code of the District of Columbia, specifically Title 29, Business Organizations, Chapter 8 Limited Liability Companies, Subchapter II Formation; Certificate of Organization, and Other Filings.
The written operating agreement provides the scope of the organization, sets up its function, and creates limitations. It governs its members (partners) relations with one another and the organization. It also defines the manager of the LLC and the individual’s rights and duties. The operating agreement must also include specific activities of the company and how it will conduct business, as well as methods of amending the operating agreement.
How Much Does it Cost to Form an LLC in DC?
Two expenses form the initial cost to form an LLC in the DC. You’ll pay $99 for the Certificate of Organization and a variable fee for your basic business license. That fee typically ranges from just under $200 up to $500 depending on the category of business you operate.
How to Form an LLC in DC?
Let’s consider how to apply for an LLC in DC. Complete the following steps to create your DC business:
Step 1 – Establish Your Business’s Name
All of the documents you must complete require your business name. This must match what you put on the business license you acquire after your Certificate of Organization.
Conduct a name search to ensure that the business name you want doesn’t already exist. You cannot register an LLC in another business’s name.
Make sure you meet the state naming requirements: must contain the words ‘Limited Liability Company’ or the abbreviation ‘L.L.C’.
Step 2 – Choose a Registered Agent
You must file Form RA-1 to name your registered agent if you file via mail. When you complete your paperwork online, you don’t have to complete this form. A registered agent does the same job as a resident agent, but the terms differ between a sole proprietorship (resident agent) and an LLC (registered agent). They do the same job, so if you transition your sole proprietorship to an LLC, you can keep the same agent, but you need the RA-1 if you file by mail.
Step 3 – File Your Articles of Organization
You must file your articles of organization. You can do this one of three ways in DC:
- In-person,
- By mail,
- Online.
Conducting your LLC establishment online proves the simplest, but you’ll need to have ready all of the pieces of paperwork needed to complete the forms. This requires a few hours to sit down and complete forms as well as having your articles of organization ready.
Step 4 – Submit Your Operating Agreement
If you file as a multi-member organization, you need to submit your operating agreement. If you do not form a multi-member, i.e. you’re the only owner, you can skip filing the operating agreement.
Step 5 – Obtain Your EIN
Think of an EIN as a Social Security Number for a business. You need an Employer Identification Number (EIN) before you can incorporate. You use this number when you file business documents and state and federal taxes. The Internal Revenue Service (IRS) uses this number to document business taxes and financial transactions. It costs nothing to obtain, and you can’t hire employees or apply for credit as a business until you have one.
Step 6 – Obtain Your Tax Registration Number
You also need a DC Tax Registration Number before you can move further through the process of forming an LLC in DC. Register your LLC with the Office of Tax & Revenue (OTR). The OTR mails the Notice of Business Tax Registration to you. You’ll need its Notice Number to obtain your business license.
Step 7 – Obtain Your Certificate of Occupancy
Every LLC in DC must obtain either a Certificate of Occupancy or a Home Occupation Permit from the District’s Zoning Administrator. If you house your business in a commercial building, you’ll need a Certificate of Occupancy, but if you start a home-based business, you’ll need a Home Occupation Permit.
Step 8 – Obtain Your Business License
Apply for and receive your Basic Business License. You cannot legally operate a business in DC without one.
DC LLC Operating Agreement Template
Now that you know how to create an LLC in DC, it’s time to check out DC operating agreement template:
