Incorporating a business in Washington, DC, requires you understand the basics of Washington, DC corporation law. The structure of your Washington, DC corporation will be instrumental in the success of your business. It will affect your tax treatment, filing requirements, funding potential and liability obligations.
The ownership plans for your business entity will help determine how to incorporate in Washington, DC. A traditional corporation is useful to raise money with investors or to allow ownership by employees in the form of shares. However, Washington, DC corporate law requires complex ongoing paperwork, and will tax your business income on the corporate and the shareholder levels.
To form a limited liability company in Washington, DC, on the other hand, is less complicated. Taxation occurs only on one level, which may be an important benefit to your company. The structure is simpler and can require only two people to incorporate.
The options available under Washington, DC corporate law are:
1. A domestic corporation, incorporated as either a C-corp or S-corp.
2. A limited liability company in Washington, DC (LLC).
3. A limited liability partnership (LLP).
Action Steps
The best contacts and resources to help you get it done
Choose what works: Washington, DC incorporation or DC partnership law
The decision in forming a corporation or partnership depends on your long-term goals for the business. Ownership is easier to divide in a corporation, while partnerships under Washington, DC partnership law are not well-suited for growth or sale and do not offer stock. Taxation is different for both types of entities. And, finally, Washington, DC corporate law requires filing paperwork and fees for each.
I recommend: FindLaw will guide you through picking the structure that works for you. Compare corporate entities at the
Department of Consumer and Regulatory Affairs, where you will find a useful list of the primary attributes of different Washington, DC business entities, to help make the best decision for you under Washington, DC corporation and partnership law.
Make your Washington, DC corporation a reality
Washington, DC corporation and partnership law requires filing certain forms as well as submitting fees. The filing may include articles of incorporation or, for Washington, DC LLC registration, articles of organization. Fees will vary depending on the structure. Washington, DC corporate law allows these filing to be done electronically and forms can be downloaded online.
I recommend: The
Department of Consumer and Regulatory Affairs is a great resource to walk you through each step of establishing your business, including Washington, DC incorporation. You can find and download the appropriate business forms at the
DCRA forms page. Don't forget the filing fee. Apply online for an employer identification number from the
IRS online tool, if you plan to have employees.
Follow Washington, DC corporation law closely
DC incorporation requires specific information to be included in filings. The Washington, DC Business Corporation Act also details requirements regarding shareholders, naming conventions, and ongoing administrative requirements under Washington, DC corporate law.
I recommend: Review Title 29 (Business Corporations) at
Westlaw.com to fully understand your obligations under Washington corporate law. If in doubt, incorporate using a reputable online service such as
MyNewCompany.com, or contact a lawyer through
Martindale-Hubbell to help you better understand Washington business law.
Tips & Tactics
Helpful advice for making the most of this Guide
- Washington corporate law is unique, because it requires a corporation to raise $1,000 in capital before commencing business or incurring any debt. Washington business law does not stop a corporation or its owners from taking steps necessary to organize the corporation or to obtain subscriptions to or payment for its stock.
- Washington, DC general partnerships, although less flexible than other corporate entities, are not required to file for incorporation.
- Don't forget that once you have incorporated, your job is not over. Corporations and LLCs must file annual paperwork. So be sure not to let your good standing lapse.
The official source of Washington, DC Corporation and Partnership Law is
the Washington, DC Corporation and Partnership Law page at Business.com
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