When you form your LLC in Washington D.C., you’ll have to pay certain costs to officially register your business with the district.
In addition to formation and ongoing costs, there will be business expenses like using a registered agent service, building a website, getting business insurance, and so on. So, how much does an LLC cost in Washington D.C.?
In this guide, we break down the costs associated with forming your LLC, from the Washington D.C. LLC filing fee to LLC upkeep prices and other business expenses.
Cost of Forming an LLC in Washington D.C.
When forming your LLC, there are a few different costs that you may incur. These include the filing fee, LLC formation service cost, operating agreement draft, and registered agent costs.
Washington D.C. LLC Filing Fee
To form an LLC, you must file the Articles of Organization with the Washington DC Department of Consumer and Regulatory Affairs. The filing fee for the Articles of Organization is $220 online or by mail and $320 in person. You will commonly see this fee referred to as the “filing fee” or “district fee.”
If you choose to use an LLC formation service, you will pay the $220+ district fee on top of their service fee. Generally, these service fees start around $40 and increase depending on additional services you purchase.
Most people choose to use an LLC formation service to create their LLC. The cost is low and they guarantee that your filing is done correctly. Check out our #1 rated LLC service:
Washington D.C. Registered Agent and Registered Office
Every Washington D.C. LLC is required to appoint a registered agent. A registered agent is a person or entity you assign to receive tax forms, legal documents, or government correspondence on your LLC’s behalf. Registered agent services can cost around $130 per year or more.
Your registered agent can be:
- A registered agent service (most common)
- Yourself (not recommended)
- Another member of the LLC
- A business attorney
If you haven’t yet formed your LLC, we recommend using Northwest Registered Agent to form, as you will receive one year of registered agent services for free with a $29 formation.
Washington D.C. LLC Operating Agreement
An operating agreement defines the roles and responsibilities of the members or managers in your LLC and will help prevent and solve any business disputes that may arise later on.
The costs associated with the operating agreement come in the drafting of the document. For single member LLCs and simple multi-member LLCs, most people choose to create the document themselves.
You don’t need to file this document with the Washington D.C. Department of Consumer and Regulatory Affairs. Using a free operating agreement template or document builder, that means your total cost would be $0.
Optional Washington D.C. LLC Formation Costs
Along with the fees associated with forming an LLC, there are several optional LLC formation costs that you may encounter.
- Reserve a Name for Your LLC – Before registering your Washington D.C. business name, you should perform a business entity name search to ensure your name is unique. The $50 name reservation fee is only necessary if you’re planning to wait between registering your LLC and conducting business.
- Doing Business As (DBA) Name – If you wish to operate your business under a different name, you can file for a DBA (known in DC as a trade name). The filing fee for a trade name is $55.
- Expedited Washington D.C. LLC Filing – Washington D.C. offers expedited filing of your Articles of Organization for an additional $50 for three-day approval and $100 for same-day approval.
- Certified Document Copies – You can order certified copies of your Washington D.C. business documents. These copies validate that the information your documents contain is true and correct. The fee for requesting a certified copy is $50.
- Certificate of Good Standing – A Certificate of Good Standing verifies that your business is legally authorized to conduct business within DC. You may need it for banks and other lenders. The fee for requesting a Certificate of Good Standing is $50.
Washington D.C. LLC Cost and Fees Over Time
There are a few things you need to address to keep your LLC in good standing with the district year after year. Each of these comes with costs and fees.
Biennial LLC Fee Washington D.C.
Washington D.C. requires LLCs to file a biennial report with the Department of Consumer and Regulatory Affairs. The service fee for filing this report is $300 every other year. DC LLCs also pay a franchise tax based on their earnings for the year.
The rate is 9% of all taxable income for LLCs with gross receipts of more than $12,000. The minimum tax rate is $250 for companies with gross receipts under $1 million and $1,000 for companies with gross receipts of more than $1 million.
The biennial report is due by April 1 every other year, and the franchise tax is due by April 15 (for calendar year filers) or by the fourth month following close of tax year (for fiscal filers).
Taxable income is based on earnings, but unincorporated entities are given a $5,000 exemption and a 30% allowance for the owner’s salary. See our Washington D.C. LLC Biennial Report article for a more in-depth overview.
Registered Agent Fee
If you use a professional registered agent service, you will pay their fee annually. Pricing will depend on the service provider that you use, but usually costs around $130/year. Using a registered agent service will save you time and the hassle of handling important legal documents and filings for the long term.
If you act as your own registered agent there are no maintenance fees. However, for privacy and compliance purposes, we don’t recommend being your own registered agent.
We recommend Northwest Registered Agent, which offers a year of its registered agent service for free when you use the company to form your LLC ($29 + district fees).
General Costs of Running a Business
Operating a business will obviously come with more than just LLC costs. These are a few of the expenses that you may run into.
Business Bank Account
An LLC separates your personal assets from your business assets. This separation is called the corporate veil. That corporate veil ensures that if your business is sued or incurs debts, your personal assets will be protected from any liabilities.
Commingling (mixing) your personal bank account with your business can pierce your LLC’s corporate veil, which means you are no longer protected by the separated entity of your LLC.
Using a separate bank account to accept payments and pay business expenses is the only way to prevent commingling funds and piercing the corporate veil.
Recommended article: Check out TRUiC’s Best Small Business Banks guide to find the best bank account for your business.
Business Permits and Licenses
Depending on the type of business you operate, your business may need the proper permits and licenses to legally operate in Washington D.C.
Alongside the permits required, your business may require industry-specific licenses to operate legally. Examples include licenses like the Washington D.C. real estate license, Washington D.C. insurance license, Washington D.C. adjuster license, and so on.
See TRUiC’s How to Get a Business License in Washington D.C. article for more information.
Every business needs a website. There’s no better way to get in front of your customers, build your brand, and grow your business.
Fortunately, the cost and difficulty of creating a business website have come down over the years. Websites are now simple to build and cheap to keep up.
We advise small business owners to use the GoDaddy Website Builder. It’s an extremely simple to use system, creates great business websites, and only costs about $15/month.
Having the proper insurance coverage can potentially save your entire business if there is a loss, accident, or lawsuit.
A few of the most common business insurance policies include:
- General liability insurance – Protects against claims of personal injury, physical injury, property damage, and more. This is the most common of all business insurance policies. Learn more about general liability insurance.
- Professional Liability Insurance – Protects against claims of inaccurate or negligent work. It’s most common in the “professional” space where businesses offer services or advice to other businesses or consumers. Learn more about professional liability insurance.
- Commercial Workers’ Compensation Insurance – This type of insurance protects your employees from on-the-job injuries or illnesses. This coverage is required if you have one or more employees. Learn more about Workers’ Compensation insurance.
The cost of business insurance varies widely based on business type, size, location, and other factors. Getting a quote is the only way to understand the actual cost of insurance for your LLC.
We recommend NEXT Insurance to help protect and grow your Washington D.C. LLC. It features instant coverage with competitive pricing that’s tailored to fit your business’ needs.
LLC Cost in Washington D.C. FAQ
Do you have to pay ongoing fees for an LLC every year?
Washington D.C. requires LLCs to pay $300 to file a biennial report every other year, as well as franchise taxes based on gross receipts. To learn more, visit the Washington DC Office of Tax and Revenue website.
What’s the cheapest way to form an LLC?
The least expensive way to form an LLC is to file it yourself. The best LLC formation services start around $40. You’ll need to pay the district filing fee in either scenario. Check out our How to Start an LLC in Washington D.C. guide to learn how to form on your own.
Can you start a Washington D.C. LLC for free?
No. All applicants must pay the district filing fee to start a Washington D.C. LLC. The filing fee is $220 online or by mail and $320 in person.
How much does a registered agent cost?
Registered agent services start at about $130 per year. We recommend Northwest Registered Agent, which is $125 per year (free for the first year when you form your LLC with them).
Do I need to pay a franchise tax for my Washington D.C. LLC?
Yes. The rate is 9% of all taxable income for LLCs with gross receipts of more than $12,000. The minimum tax due is $250 for companies with gross receipts under $1 million and $1,000 for companies with gross receipts of more than $1 million. Visit the Office of Tax and Revenue website to learn more.
How much does an LLC formation service provider cost?
It depends on the LLC formation company you choose. We recommend Northwest Registered Agent, which starts at $29, plus the $220+ district fee, and includes the first year of registered agent services for free.