LLC Cost in DC – How Much to Pay for an LLC


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Perhaps you are hoping to form an LLC in DC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in DC.

DC LLC Cost of Filing

Here are the costs involved in forming an LLC in DC.

Cost of Filing Formation Certificates

The DC Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the DC Secretary of State

DC Domestic LLC

  • Online Filing costs $220.
  • Expedited Filing Fee $320
  • By mail: Fill out the application form, and send it to Department of Consumer and Regulatory Affairs Corporations Division PO Box 92300 Washington, DC 20090. costs $320
  • In-person filing: Fill out the application form, and send it to the Department of Consumer & Regulatory Affairs, 1100 4th St. SW, Washington, DC 20024. costs $320.
  • Biennial Report filing costs $300.00. Late filing of the report bears a penalty of $100.00.

DC Foreign LLC

  • Online Filing Costs $220
  • By mail: Fill out the application form, and send it to the Department of Consumer and Regulatory Affairs Corporations Division PO Box 92300 Washington, DC 20090, costs $220.
  • Biennial Report filing costs $300.00. Late filing of the report bears a penalty of $100.00.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

DC LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in DC, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the DC Department of Revenue for regulatory boards or agencies requiring licensing. 

Business taxes

Apart from the filing of the Annual Report, the DC LLCs are also subject to state tax filing obligations. Though the taxes vary from place to place. There are different types of taxes imposed on entities operating their businesses in DC, such as federal income tax, payroll tax, sales tax, etc.

Income Tax

The income tax in the State varies between 4%-8.95% depending on the amount of income earned. If your business sells products into the State, it shall also attract sales tax at the rate of 6%.

Self-Employment Tax

DC Federal Self-Employment Tax is imposed on the business members who take profits out of the LLC. The current tax rate is 15.3%.

Federal Income Tax

DC Federal Income Tax is paid only on the income that you extract from the profits of your business, reducing the allowances and other deductions. The bracket for this is the same as the State Income Tax.

Withholding Tax

If you employ any person in your business, you must withhold the payroll tax from your employees at the rate of 7.65% of their taxable salary.

Other Mandatory Costs

DC LLC Name: It costs $50 to reserve the name of your LLC for 60 days.

Home Occupation Permit: The application for a Certificate of Occupancy for a DC LLC costs $72.60.

Business License: Obtaining Basic Business License costs around $200 for DC LLCs. Assessment of the licenses is done every two years and the licenses can be renewed at a cost of $70 with $25 for each endorsement. The DCRA Government website provides updated costs information to set up an LLC in DC.

Comparison with the Neighbouring States

 Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to DC, check out the table below:

StatesDCMarylandPennsylvaniaDelawareWest Virginia
Online filing fee$220$100 (Mail)
$150 (online or in-person)
$125$90$100
LLC Annual fee$300 (Biennial)$300$520 times the number of members of the LLC$300$25
Name reservation fee$50$25$70$75$15
Sales Tax6%6%6%No sales tax6%

The Department of Consumer and Regulatory Affairs offers several programs for the District of Columbia to support businesses. Those who want to start an LLC in DC can explore different sectors and trade as per their preferences. The major sectors contributing to the GDP of DC are retail trade, wholesale trade, construction, and utilities.

Other Costs

How Much Does It Cost to Maintain an LLC in District of Columbia

To maintain an LLC in District of Columbia you will need to pay a biennial fee of $300 along with sales tax at 6%, income tax (4-8.95%) and federal taxes.

Unlike some states, there is no easy way to avoid paying for an LLC in Washington D.C., but you can make smart decisions about your costs. Besides your fees, there are other expenses you should be aware of. The costs of operating an LLC in DC will vary depending on your business type. It’s always a good idea to research the cost of operating an LLC in DC before you decide to start one. You’ll want to be prepared to pay a little more for an LLC if you plan on hiring employees. This includes filing for withholding and unemployment taxes, and registering for sales tax if you sell goods.

To begin the process of forming an LLC in DC, you need to make sure that you choose a unique name for your company. Names that are too similar to another business will not pass muster, so make sure that you choose a name that is unique and readable. You’ll also want to make sure that you don’t include words like “bank” or “insurance” in your business name. This can pierce the corporate veil, and your personal assets can be at risk.

To keep an LLC in good standing with the District of Columbia, you’ll want to file a biennial report. These reports are designed to keep the district in the loop about your business and any vital information that you may have. A good rule of thumb is to file your report by April 1 of the year following the year you formed your LLC.

You may also want to register for some industry-specific licenses. For example, if you run a professional baseball team, you will need to obtain a professional license from the District of Columbia. Also, you may have to pay some miscellaneous business taxes if you sell merchandise. You can learn more about taxes in DC by contacting the DC Office of Tax and Revenue.

There are many companies that offer a variety of services for business owners. Some offer a one time fee, while others charge yearly fees. You’ll want to be sure to read the fine print and understand exactly what you are getting before you pay. While many companies offer premium packages, you can usually find a basic package for less than $40. You might also want to check out ZenBusiness, which offers a free name reservation.

In addition to the costs mentioned above, you may also need to file certain industry-specific licenses. For example, if you want to operate a mobile food vendor, you’ll need to register for sales tax. Professional services such as accounting and legal services will also need to get licenses.

While it may be hard to avoid some of these costs, you can still make smart decisions about your LLC’s costs. The cost of operating an LLC in DC will vary depending on your business type, but there are ways to reduce costs. You may want to open a separate bank account for your business, and you may also want to make sure that you have a tax ID number. If you are going to hire employees, you’ll also want to register with the DC Office of Tax and Revenue for withholding and unemployment taxes.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of D.C. is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

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