Starting a business in Washington DC is an exciting opportunity to build something in one of the most dynamic and opportunity-rich cities in the world. From government contracting to tech startups, nonprofits to law firms, DC is home to a remarkably diverse business ecosystem. But the process of officially forming and registering a business in the District has its own set of steps, agencies, and requirements that are distinct from the 50 states.

This step-by-step guide walks you through everything you need to do to start a business in Washington DC legally, correctly, and efficiently.

Step 1: Choose Your Business Structure

The first decision every new DC business owner faces is which legal entity structure to choose. The most common options:

• Limited Liability Company (LLC): The most popular structure for small businesses in DC. An LLC offers personal liability protection, flexible management, and pass-through taxation. The DC LLC filing fee is $99 when filing online through the DC Department of Licensing and Consumer Protection (DLCP). Recommended for most small business owners.
• Corporation (C-Corp or S-Corp): Better suited for businesses seeking venture capital or planning to issue stock. C-Corps pay DC’s 8.25% corporate franchise tax. S-Corp elections are available but note that DC taxes S-corp income at the individual level.
• Sole Proprietorship: No formal registration required beyond obtaining a trade name (DBA) if operating under a name other than your own. No liability protection. Suitable only for very low-risk, low-revenue side businesses.
• Partnership: For businesses with two or more owners. Limited partnerships and LLPs can be registered with DC. Subject to DC’s 8.5% unincorporated business franchise tax on net income.

For most entrepreneurs, a DC LLC is the right starting point. It is straightforward to form, provides liability protection, and offers tax flexibility. For help with formation documents and operating agreements, LegalZoom offers affordable online LLC formation services, or you can use a registered agent service like Northwest Registered Agent to handle the paperwork and maintain a registered address in DC.

Step 2: Register Your Business with DC DLCP

In Washington DC, business registration is handled by the Department of Licensing and Consumer Protection (DLCP), formerly known as DCRA. You can register your LLC, corporation, or other entity online at dlcp.dc.gov. The process involves submitting your Articles of Organization (for LLCs) or Articles of Incorporation (for corporations), paying the applicable filing fee ($99 for an LLC), and designating a registered agent with a DC address.

Your registered agent must have a physical street address in Washington DC (not a PO Box) and be available during regular business hours to receive legal documents on behalf of your business. If you do not have a DC office, Northwest Registered Agent provides professional registered agent services in DC for a low annual fee.

Step 3: Obtain Your Federal EIN from the IRS

An Employer Identification Number (EIN), also called a Federal Tax ID, is required to open a business bank account, hire employees, and file federal and DC tax returns. Apply for your EIN online at IRS.gov at no charge. The online application takes about 10 minutes and you receive your EIN immediately upon completion. Even if you have no employees, you will generally need an EIN to properly separate business and personal finances.

Step 4: Get Your DC Basic Business License (BBL)

Most businesses operating in Washington DC are required to obtain a DC Basic Business License (BBL) through DLCP. The BBL is DC’s primary operating permit and must be obtained before you begin doing business in the District. Licenses are categorized by business type (general business, restaurant, contractor, etc.) and fees vary. The BBL must be renewed annually or biennially depending on your license category.

Apply for your BBL at dlcp.dc.gov. The process typically requires proof of your business registration, federal EIN, and compliance with any applicable DC zoning requirements. Businesses operating from a commercial location may also need a Certificate of Occupancy.

Step 5: Register for DC Taxes at OTR

All DC businesses must register with the DC Office of Tax and Revenue (OTR) at otr.cfo.dc.gov to obtain a DC tax account number. This registration covers your DC franchise tax obligations, sales tax (if applicable), employer withholding (if you have employees), and other DC tax accounts. Registration can be completed online through the MyTax.DC.gov portal.

Step 6: Open a Business Bank Account

Opening a dedicated business checking account is an essential step in protecting your personal liability protection as an LLC or corporation. Using personal accounts for business transactions is a common mistake that can “pierce the corporate veil” and expose you to personal liability. Choose a DC-area bank or credit union (see our guide to the best banks in DC) and bring your EIN, business registration documents, and BBL to open the account.

Step 7: Understand DC Franchise and Income Tax

DC businesses are subject to the DC franchise tax, separate from any state income tax. Key rates: corporations pay 8.25% on DC net income, unincorporated businesses (including most LLCs) pay 8.5% on net income. DC individual income tax rates range from 4% to 10.75%. If your business has employees, you must withhold DC income tax from wages for DC residents and file quarterly withholding returns with OTR.

Step 8: Obtain Industry-Specific Professional Licenses

Certain professions and industries require additional DC licenses beyond the BBL. Healthcare providers, attorneys, contractors, food service businesses, and others must obtain profession-specific licenses from DLCP. Check dlcp.dc.gov for your specific industry requirements. Do not begin operating until all required licenses are in hand to avoid fines and enforcement action.

Ready to Launch Your DC Business?

Starting a business in Washington DC is achievable when you follow the right steps. For formation documents and legal help, consider LegalZoom for straightforward online services or Northwest Registered Agent for registered agent and formation services in DC.

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Also see: Small Business Funding in Washington DC | Washington DC Business Lawyers | Complete Guide to Doing Business in Washington DC