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.

LLC Service

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$99 per year

  • Standalone registered agent service

  • Take you through all steps

  • LLC formation package available

$125 per year

  • 1 year free service along with LLC formation package

  • Fast service

  • Flat rate, no hidden cost

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.

Whether you’re forming your company in DC or setting it up for the first time, you’ll need to file an annual report with the state. This report is required by the DC Department of Consumer and Regulatory Affairs and is due annually on April 1. The information you’ll have to provide includes the name of your business, the jurisdiction where it was formed, the name of your registered agent, the name and address of each member, and the date of formation.

Taxes and fees for LLCs vary depending on what type of business you operate. For instance, if you plan to operate as a mobile food vendor or a professional baseball team, you’ll have to pay sales tax. Additional taxes may also apply. For more information, contact the D.C. Office of Tax and Revenue. For businesses based in the District of Columbia, a variety of companies offer annual report services. A reputable service will charge a yearly fee plus Washington D.C. district fees.

Another important fee that many LLCs need to pay is to hire a registered agent service. The registered agent is the point of contact with the district and forwards important documents to the LLC. Some formation services include a year of registered agent service, but other companies charge a one-time fee. These fees vary, but the cost to maintain an LLC is typically about $150 per year. However, this fee is subject to change, so it’s best to shop around before hiring a registered agent.

Another important document you must have in order to operate an LLC in the District of Columbia is an EIN number. Your EIN, or Employer Identification Number, is essentially your company’s Social Security number. You can obtain this number for free from the IRS website. If you’re planning to hire employees, you’ll need to obtain an EIN. Your business license isn’t complete without this number.

Washington DC offers several license types for LLCs, and you’ll have to obtain one of them. The fees associated with these licenses vary based on the type of license you choose. The fees are primarily up front expenses. After forming your LLC, you’ll also need to file a report called an Annual Report every year. These fees will total approximately $220. If you want your LLC to be tax exempt, you can opt for a non-resident LLC.

Another expense for forming an LLC in Washington DC is name reservation. This is optional and only necessary if you’re not yet ready to launch your business. Name reservation will cost you $50 and gives you exclusive rights to the name for 60 days. It’s worth noting that name reservations aren’t required in most jurisdictions, and you can file an LLC without them. But if you’re concerned about the availability of a name, you should opt for a name reservation.

If you want to keep your address off public records, you should hire a Commercial Registered Agent. A commercial registered agent is your best bet if you’re an LLC that doesn’t want to share its address with the public. In fact, if you’re planning to form an LLC in DC, you’d be wise to look for a registered agent that provides exceptional customer service. These services will scan mail and upload it into your online account. And you’ll be able to use their office address for mailings.

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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