How to Start a Business in District of Columbia
Everything it takes to legally start a business in District of Columbia, in order — with the official District of Columbia links for each step. Most people can complete the core setup in one to three weeks.
Pick a structure (sole proprietor or LLC)
Most District of Columbia owners start as a sole proprietor (free, no filing) or form an LLC for liability protection. The LLC filing fee is about $99, and formation typically takes about 1–2 business days online. Confirm the current fee on the state site before you pay.
Name a registered agent
If you form an LLC or corporation, District of Columbia needs a registered agent with a physical in-state address. You can be your own agent if you're available during business hours, or hire a service for about $100–$150/year.
Get your EIN from the IRS
An Employer Identification Number is free from the IRS and takes a few minutes online. You need it to open a business bank account and to hire.
Register for District of Columbia taxes
District of Columbia has a state sales/use tax and has a state income tax. DC also requires a Basic Business License and, for LLCs, the unincorporated business franchise tax above a threshold.
Confirm local licenses and permits
District of Columbia rarely issues a single statewide "business license" — most licensing is by city or county, plus profession-specific licenses. Check your city and your trade.
Open a business bank account and get insurance
Keep business and personal money separate from day one. General liability insurance is the baseline; some contracts also require a bond.
Put the ongoing report on your calendar
District of Columbia requires a biennial report (about $300). $300 every two years, first due April 1 of the year after formation
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Build my planFrequently asked
How much does it cost to start an LLC in District of Columbia?
The state filing fee is about $99. Beyond that, budget for a registered agent if you hire one (~$100–$150/year), the biennial report (~$300), and any local license fees. An EIN is free.
Do I need an LLC to start a business in District of Columbia?
No. You can operate as a sole proprietor in District of Columbia with no state filing. An LLC adds a layer of personal liability protection and can make you look more established to customers and lenders — it's a judgment call based on your risk and goals, not a legal requirement.
How long does it take to form an LLC in District of Columbia?
Standard processing is about 1–2 business days online. Many states offer paid expedited options.
Does District of Columbia have a sales tax?
Yes. If your product or service is taxable in District of Columbia, you must register with the state tax agency before you collect tax. Many services are not taxable — confirm on the official site.
What ongoing filings does a District of Columbia LLC have?
District of Columbia requires a biennial report (about $300). $300 every two years, first due April 1 of the year after formation
Official sources
- District of Columbia — form your LLC or corporation
- District of Columbia — business tax registration
- District of Columbia — professional & occupational licensing
- District of Columbia — annual / periodic report
- IRS — apply for an EIN (free)
- SBA — 10 steps to start a business
Fees and timelines are commonly-cited figures last reviewed 2025-06 and can change — always confirm on the official site. This is educational information, not legal or tax advice.
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