How to Start a Business in the District of Columbia in 2023
If you have decided to try your luck at starting a business in Washington, DC, you can be sure this guide offers up-to-date information on all the steps you need to take.
To get you covered with all relevant details, we provide answers on how to:
- Develop your business idea and evaluate its potential,
- Determine your legal business entity,
- Name your business,
- Reserve and register your business name,
- Write a winning business plan,
- Secure funding,
- Choose a convenient location for your business,
- Register your business in Washington, DC,
- File business taxes,
- Get licenses and permits,
- Open a business bank account,
- Get insurance for your business,
- Hire employees,
- Create an online presence, and
- Choose software to suit your business needs.
For some of the most frequent questions about starting a business in the capital city, we provide short and precise answers in our FAQ section.
At the end, you’ll find a handy list of the most important official websites you should consult to obtain precise information and get the necessary forms.
Let’s get started.
Table of Contents
Is the District of Columbia a good state to start a business? Key takeaways
Being the nation’s capital and home to the US government, DC has a lot to offer in terms of business opportunities.
According to the District of Columbia Small Business Profile for 2022, there are 79,047 small businesses in the District, which make up 98.2% of businesses operating there.
To encourage business vitality, the District of Columbia presented a comeback plan in January 2023. The Office of the Deputy Mayor for Planning and Economic Development and the DC government presented the DC’s 2023-2027 economic development strategy to the public.
The strategy involves 6 goals to achieve by 2028, and those are:
- Create 35,000 new jobs in booming sectors such as education and research, technology, and consulting services,
- Increase the number of minority-owned employer businesses to 33% of all employer businesses,
- Provide access to grocery stores, high-speed Internet, and affordable housing across all neighborhoods,
- Increase the number of residents in the Downtown area by 15,000,
- Keep current residents and reach a population of 725,000, and
- Lift the median household income of black households by $25,000.
This six-point strategy represents a vision of the DC government and also clearly shows the priorities for the next couple of years.
Those thinking about starting a small business in the District should be encouraged by the strategy — but let’s check what the District has to offer now i.e. what its cost of living and tax scores are.
Cost of living score in the District of Columbia
The District’s residents are familiar with the state of affairs, however, the table below might be helpful if you are considering moving there to start a business.
The table shows the cost of living in DC measured against the baseline of 100.0. The baseline is taken as the national cost of living average. In addition, the table shows how the District ranks among other US states.
Important note: The District of Columbia is counted as a state in the original ranking.
|District of Columbia’s cost of living score and US ranking*|
|Cost of living index||148.7*||50th|
|*Scores above 100.0 indicate cost above the national average|
As you can see, the District of Columbia has the second highest cost of living index in the US in 2023. The highest one — 179 — belongs to Hawaii.
All subcategories are above the baseline, and we can simply state that DC has a very high living standard.
Is DC better when it comes to taxes? Let’s see what the scores say.
Tax scores in the District of Columbia
According to the 2023 State Business Tax Climate Index, the District of Columbia ranks 48th in overall score compared to other US states.
In the table below, you can find scores and rankings for different tax categories. The maximum score is 10 — higher scores imply lower taxes and vice versa. And, a rank of 1 implies the best ranking whereas 50 implies the worst.
|District of Columbia’s tax score and US ranking|
|Unemployment insurance taxes||4.64||38th|
When it comes to taxes in the District of Columbia, rates for a graduated individual income tax range from 4% to 10.75%. Also, there is a flat 8.25% corporate income tax rate and a 6% sales tax rate.
So, with a high cost of living and high taxes, DC might not be your first choice for starting a business venture. However, DC has certain advantages that might change your opinion. After all, it’s not all about taxes and living standards, is it?
Advantages of starting a business in the District of Columbia
One of the advantages that actually lends credence to the government’s comeback plan and new job openings is the highly educated workforce.
In the U.S.News Best States rankings article, Washington, DC is 2nd in overall ranking and 10th in the education category among US states. Also, as per U.S.News higher education rankings, it ranks 2nd in the higher education subcategory.
Another advantage of the District of Columbia is the fact that it is placed in the group of the best places to live for young professionals in 2023–2024 where it ranks 10th in the US.
Also, to support economic development, the District offers a great number of business incentives. On their website, you can use filters to find incentives or a wizard option where you get a list of the best matching incentives after you enter your business location, size, structure, and industry. A map view enables you to click directly on the map and find potential local incentives.
Despite high taxes and cost of living, the District of Columbia has means to attract businesses. As WTop news reported in June this year, Boeing and Raytheon moved their head offices to the DC area and joined 17 other Fortune 500 companies headquartered in the District.
💡 Plaky Pro Tip
In case you are wondering what the business environment is like in other US states, feel free to check out our list of guides for starting a business and find a perfect state:
How to start a business in the District of Columbia in 16 key steps
Starting a business requires some serious considerations meaning you need to think about location, funding, hiring, and so on.
No matter what kind of business you want to run, the main goal is to make the process less stressful.
To keep a cool head and avoid forgetting any procedural rules, make sure you carefully study all the steps before embarking on a new business enterprise.
Step #1: Develop your business idea in detail
To check if your business idea is what you are really looking for, allow yourself some time to think about the questions below:
- Is your business idea something you really want to do?
- What are the reasons behind the idea to run such a business?
- Are you qualified for the business you want to start?
- Do you have a unique product/service or want to upgrade an existing one?
- Is there a strong demand for the product/service you want to offer?
- Are people willing to pay for it?
- Do you need office space?
- Do you need additional funding to start your business?
- Do you need to hire employees right from the start?
By answering these questions, you’ll be able to tell if your business idea is something worth pursuing.
If you are wondering what businesses are popular in DC, you’ll find some suggestions in the following lines.
District of Columbia business idea suggestions
As vibrant as it is, the District craves accommodation and transportation services, beauty salons, and restaurants.
But, if you don’t mean to invest large sums in your business, you can opt for:
- Online tutoring,
- Online survey business,
- Painting services,
- Cleaning services,
- In-home fitness training,
- Graphic and web design, or
- Gift basket making.
Also, when thinking about your new business, keep in mind the target sectors expecting serious job growth mentioned in the comeback plan:
- Education and research,
- Consulting services,
- Communications and design,
- Hospitality, tourism, and entertainment,
- Life sciences and health tech, and
- Technology (e.g. AI, cybersecurity, FoodTech).
Step #2: Research the potential of your business idea
Once you’ve decided on the business you want to start, don’t forget to check whether your idea has true potential for success.
To do that, try out some of the ways suggested by Forbes in the article on how to find your business idea and validate its potential:
- Perform a SWOT analysis — use this analysis to identify positive and negative aspects of your business idea as well as its opportunities and threats,
- Involve potential customers — present your idea to your potential customers and ask them for feedback,
- Test your idea with an MVP (minimum viable product) — create a basic version of your product/service and present its features to a selected group of customers, see how and when they use it and if it fulfills their expectations,
- Do a financial analysis — analyze your expenses and try to include everything from start-up costs to salaries of your employees, and
- Search for expert opinion — engage with other industry professionals who can provide advice and point out some pros and cons of your business idea.
If your research shows you’ve come up with a profitable business idea, you should definitely go for it.
For instance, if you are into cooking and like to engage with people, you can start a food truck business, which is quite popular in the District.
You can find food trucks selling street food, main dishes, or desserts outside downtown offices and metro subway stops, along public squares, and other spots with high foot traffic. There is even an app available showing the location of food trucks in DC.
After you firmly decide you want to turn your business idea into reality, the next step is to choose the legal structure of your future business.
Step #3: Determine your legal business entity
This step is one of the key ones because your business’s legal structure impacts your taxes, licenses, and liability.
Business entities that can be formed in the District of Columbia are:
- Sole proprietorship,
- General partnership,
- Limited partnership (LP),
- Limited liability partnership (LLP),
- C-corporation (general corporation),
- Benefit corporation (B Corp),
- Nonprofit corporation,
- Limited liability company (LLC),
- Cooperative association, and
- Limited cooperative association.
These business entities are listed on the Choose a Corporate Structure page on the DC Department of Licensing and Consumer Protection (DLCP) website.
Entity type #1: Sole proprietorship
A sole proprietorship is a type of enterprise owned by one person. Since it’s not a formal legal entity, the owner and the business are the same in the eyes of the law.
Being self-employed, the owner has full control over the business and its profits and losses, but may encounter difficulties with obtaining additional funding.
Also, the owner doesn’t enjoy personal liability protection meaning they are responsible in case their business faces debts or lawsuits.
These business structures are taxed through their owner’s personal income.
Entity type #2: General partnership
This business entity is formed by 2 or more people who share the workload and control according to their formally written or verbal partnership agreement.
Within a general partnership, partners share the same income and losses and are liable for all business debts.
Partners pay taxes through their individual income tax returns.
Entity type #3: Limited partnership
This partnership structure implies having at least 1 general and 1 limited partner.
General partners are personally liable whereas limited partners are liable for their part of the invested capital.
Also, general partners are the ones to manage and control the business.
It is highly recommended for a limited partnership to create a partnership agreement and establish rules, procedures, and management strategy.
Limited partnerships pay taxes through their personal tax returns.
Entity type #4: Limited liability partnership (LLP)
A limited liability partnership is a bit more specific taking into account that each partner has equal control and the same limited legal liability.
Partners within an LLP pay taxes on their share of profits and losses and cannot be held responsible for any debts caused by other partners.
Entity type #5: C-corporation (general corporation)
This business structure is owned by shareholders, and it is required to sell stock. C-corporations are for-profit businesses mainly formed to attract investors.
C-corporations face double taxation — the corporation itself is taxed on the profits, and shareholders are also taxed on the dividends they receive. Shareholders pay taxes through their personal tax returns.
It is important to mention that the personal assets of shareholders are protected from business liability.
In C-corporations, the change of ownership doesn’t affect the work of a corporation.
Entity type #6: S-corporation
This entity type is very similar to a general corporation. However, there are certain Internal Revenue Service (IRS) requirements it needs to qualify for.
Some of the requirements to qualify for S-corporation status are that a corporation must be domestic, have only 1 class of stock, and have up to 100 shareholders.
Unlike general corporations, S-corporations are not subject to double taxation as they are pass-through entities and shareholders pay tax on their share of profits.
Entity type #7: Nonprofit corporation
Nonprofit corporations are entities with no owners. They are established for a certain religious, charitable, literary, or other purpose.
These corporations are led by the board of directors and/or voting members who have personal liability protection.
Nonprofits can apply for tax-exempt status through the IRS. You can find more information on the requirements in IRS Publication 557.
Entity type #8: Benefit corporation (B Corps)
A benefit corporation is a for-profit business structure that is formed to promote better social and environmental standards.
B Corps are more flexible in terms of fundraising, but since they are a relatively new type of business, it is highly recommended to get professional assistance if you decide to form it.
To learn more about benefit corporations, you can read through Chapter 13 of the Code of the District of Columbia.
Entity type #9: Limited liability company (LLC)
A limited liability company is a hybrid business entity, meaning that it combines the positive characteristics of a partnership and those of a corporation.
It is a legally separate entity from its members — owners’ personal assets are protected. Also, profits and losses belong to the owners, i.e. owners pay tax on their share of profits.
This business structure has no limitations on the number of owners.
Professionals such as accountants, lawyers, and doctors often form a professional LLC (PLLC).
Entity type #10: Cooperative association
A cooperative association is a type of business entity established for the mutual benefit of its members.
Members of a cooperative association, also known as patrons, take part in different activities of mutual interest such as producing, building, and furnishing various commodities, goods, services, etc.
This business structure represents a group enterprise, and it is treated as a nonprofit corporation for tax purposes.
Entity type #11: Limited cooperative association
This type of association is also established to fulfill the mutual interests of its members. The enterprise is jointly owned and controlled.
The association allows members to share all the benefits and have separate investments with the aim of receiving returns on those investments.
An important characteristic of a limited cooperative association is that members decide whether it works for profit or not.
Step #4: Name your business in the District of Columbia
A business name is pivotal to the success of your business. It represents the backbone of your business and makes it recognizable.
You can check if your preferred name is available at CorpOnline after making an Access DC account.
To enhance your business name search, you can also do an online search and see if there are any same or similar names to the one you’ve come up with.
Nevertheless, whatever name you have in mind, make sure it complies with the name requirements for certain types of entities as per the Code of the District of Columbia. For instance, a business corporation must have words such as “corporation”, “incorporated”, “company”, or “limited” within its business name (e.g. Glaze company).
In addition to this, please check the Code’s section on permitted names.
Many businesses choose a fictitious name for their business, also known as a trade name. This name is chosen by the business’s owner for trade purposes, and it doesn’t include the full legal name or surname of the owners.
In case you want to have a trademark identifying your business, check available names through the US Trademark Electronic Search System.
Step #5: Reserve and/or register your business name in the District of Columbia
Once you’ve chosen a business name, you can proceed with either name reservation or name registration.
To reserve a name for your business entity, you should submit a GN-3 Name Reservation Registration & Transfer form to the Mayor who will approve the reservation for a 120-day period.
The same form is used if you decide to transfer the name reservation to another person.
As it is said in the form, you can check the Corporate Fee Schedule online to see the filing fee. For instance, as per the current Corporations Division Fees for Limited Liability Company, the name reservation fee for a domestic LLC is $50. Most business entities have name reservation fees in their entity’s fee lists, which you can find in Step #9 Register your business in the District of Columbia.
The District allows foreign entities to register a name for their business entity by filing the GN-4 Name Registration & Renewal Form. The form is used for registration renewal as well.
The registration is valid for 1 year, and the form is filed with the Mayor as explained in the Code’s Registration of Name section.
Domestic name reservations and foreign name registrations are both available as a service on CorpOnline.
If you prefer, you can mail the forms and required payment to the DLCP. The address is provided in the forms.
Register a trade name in the District of Columbia
According to the Code of the District of Columbia, registration of the trade name is required for any business conducted under a name that is different from their true name.
To register your business trade name, use the form TN-1 Trade Name Registration. The filing fee is $55. A company must be in good standing before submitting this application. The form is filed with the Mayor.
It is required to apply for a trade name renewal every 2 years. To apply, use form TN-2 Trade Name Renewal. The renewal is due by April 1st.
A trade name renewal fee is $55, and in case you file after April 1st, but no later than by September 1st, the late fee of the same amount is added.
You can file with the Mayor, mail forms together with the required payment to DLCP, or apply for the registration/renewal via CorpOnline.
Register a trademark in the District of Columbia
According to the state trademark information links page provided on the United States Patent and Trademark Office website, the District of Columbia does not have a trademark law.
Those businesses using trademarks in the District area qualify for federal registration as well.
Bonus Step: Consider the URL domain for your business in the District of Columbia
If you’re planning to promote your business online and build a website, you should definitely consider securing a domain name.
Even if your initial budget doesn’t cover setting up a website, buying a domain will prevent someone else from occupying the one you prefer.
You can always do a Google search and check if your chosen domain has already been taken.
If you opt for a domain purchase, check the list of accredited registrars provided on the US Small Business Administration (SBA) website.
Step #6: Make a clear business plan for your new business in the District of Columbia
A business plan is the most efficient method to illustrate the goals and aims of your business.
Even though it’s optional, and it might seem like writing it is a time-consuming task, it is actually a very useful document that represents the backbone of your business and serves as a guide.
For the most part, you’ll probably refer to it from time to time to remind yourself of everything you need to do, but it is a great advantage to have one if you tend to look for investors or apply for bank loans.
The format of your business plan is completely up to you — there’s no right or wrong way to create it. The important thing is that it suits your business needs.
Here’s our suggestion of the substeps you should follow when writing your business plan:
- Choose a suitable business plan format,
- Write an executive summary,
- Describe your business,
- Specify your product(s) and/or service(s),
- Perform a market analysis and find your target audience,
- Outline your management and organizational structure,
- Carry out customer segmentation,
- Come up with a marketing plan,
- Prepare a logistics and operations plan, and
- Make a strategic financial plan.
Now, let’s check what each of the substeps involves.
Substep #1: Choose a suitable business plan format
You can find many different business plan templates online, or you can start your own plan from scratch.
The SBA, for example, differentiates between 2 types of business plan formats — lean startup and traditional.
A lean startup plan covers the key elements of your business such as a product/service specification, target audience, resources, estimated costs, etc., and it is typically 1-page long.
On the other hand, a traditional plan is quite informative about products/services, organizational structure, financial estimates, funding, etc. You are free to include charts, diagrams, and graphs.
It is much longer than a lean startup plan, and it is often presented to potential stakeholders, investors, and bank executives.
If you are in search of some good-quality tutorials on how to write a business plan, the SBA learning center provides instructional material on the topic.
Also, you can seek help with planning from the DC Small Business Development Center (DC SBDC). The center and their partners hold one-on-one sessions where you can get valuable advice on business planning, funding opportunities search, and other business issues.
Substep #2: Write an executive summary
An executive summary provides some key business features, and if written in an apt and straightforward manner, it will likely attract the interest of potential investors and lenders.
Your executive summary should explain your business’s:
- Mission statement,
- Ownership structure,
- Target audience,
- Competitive advantage,
- Financial requirements,
- Employees, and
- Projected profits.
Don’t miss out on a chance to explain why you believe in your business and how you’ll return the money invested or loaned.
Substep #3: Describe your business
This is where you elaborate on your business, i.e. on the features you mentioned in the executive summary.
Point out the advantages of your business and its strengths and include information on:
- The industry your business belongs to,
- Legal structure,
- Long and short-term goals,
- Target market,
- Consumers/clients, and
- Management and organizational structure.
As an illustration, we’ll use the food truck business.
This business type belongs to the street food industry along with food booths and carts. In terms of a business structure, it is usually a sole proprietorship or a partnership.
A food truck has 1 or 2 employees, but depending on the working hours and conditions, it can have more.
When it comes to the target market and consumers, everyone walking, living, or working in the area where the truck is located is a potential consumer.
And finally, feel free to write about your future plans and goals. Your short-term goal might be to add new dishes to the menu whereas a long-term goal might be to expand your business and open more food trucks in different locations.
Substep #4: Specify your product(s)/service(s)
Whatever your business is, you should have the basic idea of what product(s) or service(s) you’ll start with.
You should list them and describe their characteristics, production process or service procedure, and the equipment you’ll use. If you have any suppliers, make sure you mention them as well.
In the food truck business, you can make a list of all the dishes you offer, what ingredients you use, how you serve, etc.
Explain how and when you order material from suppliers and how you maintain the hygiene of the equipment.
Substep #5: Perform a market analysis and find your target audience
Before going into any business, a market analysis should be a top priority. This analysis will help you identify:
- Industry trends,
- Your ideal customer,
- Your target demographics,
- Market gaps,
- Your competitors, and
- Market potential.
After performing the analysis, you’ll be able to develop your business and pricing strategy, create advertising campaigns, and come up with a plan to outperform the competition.
For example, if you have a food truck, try to use some vibrant colors and make it visually attractive, or get some paper napkins with inspirational quotes that customers will use after the meal. These will make their day for sure.
Substep #6: Outline your management and organizational structure
This part of your plan depends on the business structure of your company. Sole proprietors are more likely to have less to explain here than corporations.
This section should cover the following information on:
- What your business structure is,
- Who the owners are,
- Employees and their experience,
- What the responsibilities of each employee or group of employees are,
- Licenses and permits you need,
- Zoning regulations,
- Suppliers and other partners.
If you own a food truck, you might work on your own or find someone to help you. If you are planning to hire, make sure you include the requirements for potential employees.
Substep #7: Carry out customer segmentation
The success of your business rests on the satisfaction of your customers.
To be able to meet the needs of your customers, it is highly advisable to carry out customer segmentation.
What does this mean?
It means that you’ll classify your customers on the basis of the demographic group they belong to, the frequency of their use of your product(s)/service(s), or their preferences.
As time goes by, you’ll refine your segmentation and learn what it takes to retain your customers.
In the food truck industry, you can group your customers according to their favorite dishes, favorite add-ons, the time they usually buy food, etc.
Substep #8: Come up with a marketing plan
The market analysis you have already made will be of immense help in creating your strategic marketing plan.
Knowing your ideal customers and market gaps will help you find the best ways to promote your business.
Your marketing plan depends on the budget you have, so you can decide whether to do the marketing on your own or hire a professional agency.
Excellent products or services are a prerequisite for a successful business, but if you find a way to outshine competitors, you’ll hit the ground running.
To define your marketing strategy, you need to choose its focus which can be based on:
- Packaging, etc.
You can also combine these and show people why they should choose your product(s) or service(s).
Substep #9: Prepare a logistics and operations plan
This substep deals with the flow of your product(s)/service(s), i.e. the way you organize your work. You are expected to explain all the procedures you follow in your business.
A company that makes certain products has an established procedure for ordering the materials, going through the production process, and the delivery of finished products. If you start such a company, your logistics and operations plan should also include data on suppliers, vendors, and partners who will work with you.
If you start a company that provides a certain service, include information on how your customers can reach you, what your service includes, and the time they can book your service.
In the case of a food truck business, you can provide the location of your truck, information on the days you prepare exclusive dishes, or if you offer a delivery service.
Substep #10: Make a strategic financial plan
You can hardly start a profitable business without putting money into it. This is why you need to make a strategic financial plan and calculate:
- Your start-up costs,
- Earning projections for the first year on a monthly, quarterly, and yearly basis, and
- Earning projections for the next 3–5 years.
If you are going to apply for funding with investors, banks, or the state, you should add information on how you plan to invest the money you receive and return it.
It is recommended to include the latest balance sheets, income statements, and tax returns if you have bought an existing business.
Step #7: Secure funding for your business
There are not many businesses you can start with no money. In many cases, entrepreneurs need some extra funding to get their business off the ground and pay for office space, equipment, employees, marketing, and much more.
Apart from the business incentives mentioned earlier, entrepreneurs usually opt for some of the following funding options:
- Friends and family loans,
- SBA loans,
- Investors, and
- DMPED business funding opportunities.
Funding option #1: Bootstrapping
Bootstrapping is known as self-funding and implies the use of your savings to start your own business.
Although risky, bootstrapping has its benefits:
- No pressure to return loans,
- Better focus on the improvement of products or services, and
- Greater control over the company.
As your business grows, chances are you’ll soon get the investment back.
Funding option #2: Friends and family loans
Friends and family loans are another funding option that will help your business kick off.
If you choose this option, you’ll most likely get more favorable repayment conditions than banks or investors would impose.
But, to be on the safe side and avoid any disputes with friends or family, remember to suggest you sign an agreement and set repayment terms.
Funding option #3: Partnership
This funding option implies looking for a partner with whom you join finances to start a business.
In this case, you’ll share control and ownership with this person. Make sure you sign a partnership agreement and define each partner’s obligations and responsibilities.
Funding option #4: SBA loans
The DC Small Business Development Center suggests SBA loans as a way to obtain finances.
The SBA offers 3 types of loans for borrowers:
- 7(a) loans — a loan program aimed at small businesses that can be used for improving real estate, purchasing machinery or furniture, refinancing, etc. The maximum loan amount is $5 million.
- 504 loans — a loan program providing long-term financing with fixed rates. The maximum loan amount is $5,5 million, and you need to run a for-profit company to be eligible for the loan,
- Microloans — a small loan in the amount of up to $50,000, the average one being $13,000. The SBA provides these loans in cooperation with its intermediaries for the purpose of rebuilding, re-opening, or improving businesses in other ways.
You can search for your perfect lender through the Lender Match program with the assistance of the SBA.
Funding option #5: Crowdfunding
Crowdfunding is the process of obtaining smaller amounts of money from a large number of small investors.
A crowdfunding campaign is typically conducted online through platforms such as GoFundMe, Indiegogo, or Kickstarter. You can also check out DC Kiva Hub managed by the Department of Small and Local Business Development (DSLBD).
To find out more about how to launch a crowdfunding campaign, you can refer to the brochure behind the link.
Funding option #6: Investors
When businesses look for big investors, those are usually angel investors or venture capitalists. They can provide finances for projects, equipment, training, real estate, and more.
Angel investors can be both wealthy individuals who tend to invest small sums in promising startups or LLCs, corporations, and partnerships. Their investment is mostly returned in the form of income tax credits.
On the other hand, venture capitalists are large companies offering funding in exchange for equity stakes.
These companies are ready to invest large sums along with providing mentorship and/or staff to bolster the growth of the businesses they invest in.
However, unlike angel investors who rarely get involved, venture capitalists tend to have a greater role in decision-making.
The Office of the Deputy Mayor for Planning and Economic Development (DMPED) announced the request for applications for the FY23 DC Venture Capital Grant Program. The aim of the program is to enhance access to funds for early-stage businesses in the District of Columbia.
Funding option #7: DMPED business funding options
The Office of the Deputy Mayor for Planning and Economic Development publishes various FY23 Business Funding Opportunities on their website.
You can find information on the currently open and closed grant programs and procurement opportunities for existing and new companies.
These funding options are all available to small businesses in the District of Columbia, but they are not the only ones. In addition, you can also check out:
Step #8: Choose a convenient location for your business in the DC
If your business is home-based, you’ll most likely avoid all the to-ing and fro-ing involved in the search for the perfect business location.
But, whether we want to admit it or not, a good location is a prerequisite for business success.
However, there are many details to consider when choosing the right one such as:
- Zoning requirements,
- Foot traffic in the area,
- Nearby competitors,
- Proximity to major roads, ports, rails, and airports,
- Cost of rent and utilities,
- Cost of renovation, etc.
The DC government website provides resources that can help you choose a business location. These resources include transportation maps, online mapping tools, Metrorail and Metrobus routes, and much more.
The institution in charge of zoning regulations is the DC Office of Zoning. On their website, you can learn about zoning regulations and watch some zoning tutorials. They also have a zoning handbook that can guide you through the zoning procedures.
To legally operate in the DC, you need to obtain one of these documents:
- Certificate of Occupancy, or
- Home Occupation Permit.
The first document, the Certificate of Occupancy (C of O), proves your business space (office, building, structure, or land) conforms to the zoning and other regulations. In the DC, you cannot use any space for any purpose other than a single-family dwelling unless you obtain a C of O.
On the link above, you’ll find more information on C of O and resources such as the application, guidelines, FAQ, etc.
And, the second document, the Home Occupation Permit (HOP), should be obtained by all those who conduct business from the comfort of their home. You can find more information and supporting documents on the link above.
Please check the Building Permit Fee Schedule to check fees for both C of O and HOP.
Step #9: Register your business in the District of Columbia
By now, you should have a business name, a convenient location, and seed money. What follows is the official registration of your business.
Business registration is one of the prerequisites for obtaining a basic business license (BBL), which will be discussed later in Step #11.
Another requirement for future businesses is to apply for an EIN (Employer Identification Number), which is required when you want to:
- File a tax return,
- Apply for a business license,
- Hire employees, and
- Open a business bank account.
You can apply for an EIN through the IRS website. The application is free of charge.
Also, the appointment of a registered agent is a must. As stated on the DLCP Corporations Division Business Registration FAQ page, all domestic and foreign business entities must appoint a registered agent.
A registered agent is required to have a physical street address in the District of Columbia. Both domestic and foreign entities are allowed to appoint an individual working within a company as the registered agent.
Important note: In October 2022, and under the provisions of the Department of Buildings Establishment Act of 2020, 2 new agencies replaced the former Department of Consumer and Regulatory Affairs (DCRA) — the Department of Buildings (DOB) and the Department of Licensing and Consumer Protection (DLCP). Make sure you check if there are any new forms or regulations published on these websites during the DCRA transition period. Also, check if the service you need is available through CorpOnline. You can find information on accessing CorpOnline on the DLCP website.
Now, let us walk you through the unique registration requirements for each of the entities.
Register a sole proprietorship in the District of Columbia
A sole proprietorship is the simplest entity to form because as long as you conduct business without registering it with the Corporations Division, you are considered a sole proprietor.
Sole proprietors don’t have to use their own name, but they can register a trade name. If they choose to have a separate business account, they must get an EIN.
These entities still need to obtain a business license and check if they need any federal licenses.
Register a general partnership in the District of Columbia
The District of Columbia doesn’t require any registration documents for general partnerships. However, they can also register a trade name if they like.
General partners may file a Statement of partnership authority with the Mayor. The DLCP doesn’t have a form for the statement, so you can create your own based on the propositions given in the Code.
If partners decide to sign a partnership agreement, they should read the section on the effect of partnership agreement found in the Code.
General partnerships are required to get a business license and pay taxes. You can find a Partnership Return of Income Booklet for Tax Year 2022 on the Office of Tax and Revenue website.
Register a limited partnership in the District of Columbia
To register a domestic limited partnership in the District of Columbia, you need to file a Certificate of Limited Partnership for Domestic Limited Partnership (DLP-1). The filing fee is $99.
The statement is submitted to the Superintendent (Mayor’s Agent for Service of Process) for filing by email/mail or in person.
If you choose a walk-in option, you’ll be charged an additional $100 fee for expedited service.
Important note: For all mail-in filings, there is a separate form EX-2 Mail-in Filing Cover Letter to be completed and sent with other forms.
It is also possible to file the statement online via CorpOnline. The service is paid by credit card. After the file submission, make sure you print the last confirmation page.
If you need to amend or restate your certificate, or terminate your LP, find all domestic limited partnership forms on the given link. Fees for all these services are published on the Corporations Division Fees — Limited Partnership page.
The Code of the District of Columbia specifies the partnership agreement effect on limited partnership and person becoming a partner.
To maintain their good standing, LPs are required to file a 2-year (biennial) report with the Corporations Division. The form used for reporting is the BRA-25 Two-Year Report for Domestic & Foreign Filing Entity. Make sure you check the fee with the DLCP. The first report is due April 1st in the first year after the registration year, and subsequent reports are due by the same date every 2 years thereafter.
Important note: This form for a biennial report is used for all domestic and foreign filing entities.
Register a limited liability partnership (LLP) in the District of Columbia
If your chosen business entity is a domestic limited liability partnership, you can register it by filing a Statement of Qualification for Domestic Limited Liability Partnership (DLLP-1). The filing fee is not specifically provided, but according to the Corporations Division Fees — Filing Fee for All Entities, the fee is equal to the comparable service fee in such cases.
The statement is filed with the Superintendent, and this can be done by email, mail, or in person. There is an additional expedited fee in the amount of $100 for those who opt for a walk-in option.
It is also possible to file the statement online via CorpOnline. The service is paid by credit card, and after you submit the file, you should print the last confirmation page.
In case you need to amend the statement or cancel your qualification, use Statement of Amendment or Cancellation of Qualification for DLLP.
Just like LPs, LLPs are required to file a 2-year report with the Corporations Division to maintain their good standing. The form used for reporting is the BRA-25 Two-Year Report for Domestic & Foreign Filing Entity. Please, check the fee with the DLCP. The first report is due April 1st in the first year after the registration year, and subsequent reports are due by the same date every 2 years thereafter.
Register a domestic for-profit and benefit for-profit corporation in the District of Columbia
The term “for-profit corporations” encompasses C-corporations, S-corporations, and benefit corporations.
To register a for-profit corporation, you need to file form DBU-1 Articles of Incorporation of Domestic Business Corporation. The form is filed with the Superintendent by email, mail, or in person.
Benefit corporations must state they apply for their status within the DBU-1.
Those who choose the in-person option will pay an expedited fee in the amount of $100.
Another payment option is via CorpOnline. You pay by credit card, and it is important to print the last confirmation page you get after filing the Articles.
The filing fee for DBU-1 depends on the amount of authorized capital. The minimum fee is 99$ (when authorized capital is up to $100,000). You can check other fees at the Corporations Division Fees — Business Corporation page on the DLCP website.
All other Domestic Business Corporation Forms, including Articles of Amendment or Dissolution, are found on the DLCP website.
For-profit corporations must file a 2-year report with the Corporations Division to maintain good standing with the District. The form used for reporting is BRA-25 Two-Year Report for Domestic & Foreign Filing Entity, and the filing fee is $300. The first report is due April 1st in the first year after the formation year, and subsequent reports are due by the same date every 2 years thereafter.
As already mentioned, S-corporations follow the same registration process as C-corporations. However, to get their status, S-corporations must submit Form 2553 — Election by a Small Business Corporation with the IRS. Before filling out the form, make sure you read the Instructions for Form 2553 first.
To find more information on for-profit business corporations, check out Chapter 3. Business Corporations in the Code.
Keep in mind there are important steps following incorporation as explained in the Code’s section on organization of corporation:
- Holding an organizational meeting,
- Appointing officers,
- Adopting bylaws, and
- Electing a board of directors.
Register a nonprofit corporation in the District of Columbia
To register a nonprofit corporation in the District, you need to submit the DNP-1 Articles of Incorporation of Domestic Nonprofit Corporation to the Superintendent for filing. This can be done by email, mail, or in person. The filing fee for a domestic nonprofit corporation is $80.
There is an additional expedited fee in the amount of $100 for walk-in customers.
If you prefer, you can also submit the Articles via CorpOnline and pay by credit card. Print out the last confirmation page for your own reference.
All forms you might need for nonprofits are found among Domestic Non-Profit Organization Forms on the DLCP website.
To check fees for all services regarding nonprofits, visit the Corporations Division Fees — Nonprofit Corporation page on the DLCP website.
Nonprofit organizations enjoy tax-exempt status. To apply for this status under Section 501(c)(3) with the IRS, please visit the Applying for Tax Exempt Status page on the IRS’s website. Depending on the tax-exempt status you want, choose a suitable form to fill in. All forms are published with instructions, and all applications are submitted online through Pay.gov.
Steps required after the registration of a for-profit corporation also apply to nonprofit corporations.
And, not to forget a crucial element — nonprofit corporations also must file a 2-year report with the Corporations Division to maintain good standing with the District. The form used for reporting is the BRA-25 Two-Year Report for Domestic & Foreign Filing Entity. The filing fee is $80. The first report is due April 1st in the first year after the formation year, and subsequent reports are due by the same date every 2 years thereafter.
To find out more about the nonprofit corporations, check out Chapter 4. Nonprofit Corporations in the Code of the District of Columbia.
Register a limited liability company (LLC) in the District of Columbia
You can register an LLC by filing DLC-1 Articles of Organization for Domestic Limited Liability Company with the Superintendent. The filing is enabled by mail, email, or in person. The filing fee for a domestic LLC registration application is $99.
If you are a walk-in customer, you’ll be charged an expedited fee service in the amount of $100.
All other fees for LLCs are found on the Corporations Division Fees — Limited Liability Company page on the DLCP website.
As is the case with other filings, LLCs can be registered via CorpOnline. The service is paid by credit card, and you are advised to print the last confirmation page.
In case you need other Domestic Limited Liability Company Forms, you can find them on the DLCP website.
LLCs also file a 2-year report with the Corporations Division to maintain good standing with the District. The form used for reporting is the BRA-25 Two-Year Report for Domestic & Foreign Filing Entity. The filing fee is 300$. The first report is due April 1st in the first year after the year of registration, and subsequent reports are due by the same date every 2 years thereafter.
Signing an operating agreement is highly recommended for LLCs because this document regulates how LLCs are managed. To find more on the agreement and the regulations governing LLCs, please check Chapter 8. Limited Liability Companies of the Code.
Register a general cooperative association in the District of Columbia
A domestic general cooperative association can be registered when you submit DGCA-1 Articles of Incorporation for Domestic General Cooperative Association. Follow the instructions on the first page of the form to fill out the Articles correctly. The filing fee is $80. You submit the Articles to the Superintendent by email, mail, or as a walk-in customer.
If you choose the walk-in option, you pay an additional expedited fee of $100.
There is also an option to file the Articles through CorpOnline, in which case you pay by credit card. Make sure you print the last confirmation page for your records.
All Domestic General Cooperative Association Forms are available on the DLCP website. In addition, you can check Corporation Division Fees — General Cooperative Association to see the filing fees.
General cooperative associations file a 2-year report with the Corporations Division and in this way maintain their good standing. The form used for reporting is BRA-25 Two-Year Report for Domestic & Foreign Filing Entity, and the filing fee is $80. As is the case with previously mentioned entities, the first report is due April 1st in the first year after the year of registration, and subsequent reports are due by the same date every 2 years thereafter.
General cooperative associations also need to:
- Create bylaws,
- Form a board of directors, and
- Hold meetings.
To find more information on these entities, please visit Chapter 9. General Cooperative Associations of the Code.
Register a limited cooperative association in the District of Columbia
If you want to register a domestic limited cooperative association, you can do so by filing DLCA-1 Articles of Organization of Domestic Limited Cooperative Association with the Superintendent.
The form includes instructions which you can use to draft the Articles. Depending on whether this entity type is for-profit or nonprofit, the filing fees are $220 and $80 respectively. The form can be submitted via mail, email, or in person.
A walk-in customer will be charged an additional expedited fee in the amount of $100.
The filing is also enabled through CorpOnline, and the service is paid by credit card. You should print the last confirmation page.
If you need other Domestic Limited Cooperative Association Forms, such as forms for amending or restating, you can find them on the DLCP. To find out how much you’ll be charged for services, visit the Corporations Division Fees — Limited Cooperative Association page on the DLCP website.
Limited cooperative associations must file a 2-year report with the Corporations Division to maintain their good standing. The form used for reporting is the BRA-25 Two-Year Report for Domestic & Foreign Filing Entity, and the filing fee is $80 for nonprofits and $300 for for-profit associations. The first report is submitted on or before April 1st in the first year following the formation. And, later reports are due April 1st every 2 years.
As per Chapter 10. Limited Cooperative Associations of the Code, these business structures need to:
- Create bylaws,
- Form a board of directors, and
- Hold an annual members meeting or a special meeting of members.
Step #10: File and report business taxes in the District of Columbia
Regular tax payment is an obligation imposed on all businesses. The institution in charge of business taxes is the Office of Tax and Revenue (OTR).
The OTR provides assistance to all walk-in customers at the Customer Service Center, 1101 4th Street, SW, Suite W270, Washington, DC 20024. The hours of operation are from 9 a.m. to 4 p.m.
It is highly recommended to register your business on the District’s online tax portal — MyTax.DC.gov. To set up your account, you’ll need the following information:
- EIN and/or Social Security Number (SSN),
- Your business address,
- Your legal form of business followed by names, titles, home addresses, and SSNs of the owner(s), partners, and officers.
- Information on the entity registered with the District before, and
- The addresses for all locations in the District where you’ll collect sales tax.
New businesses start the registration process on the portal by completing FR-500 New Business Registration found in the Business section on the linked page. This is actually a combined registration application for business taxes, fees, and assessments. When you open the link, you’ll get instructions on all the documents you need to prepare.
Let’s now go through the major taxes businesses should pay.
DC Franchise Tax
Businesses registered as corporations pay a minimum corporate franchise tax in the following way:
- $250 if their gross receipts are up to $1 million, and
- $1,000 if their gross receipts are more than $1 million.
Unincorporated businesses pay an unincorporated business franchise tax. A required minimum tax is:
- $250 if their gross receipts are up to $1 million, and
- $1,000 if their gross receipts are more than $1 million.
You can find more information on corporate tax rates and how unincorporated businesses report income at the DC Business Franchise Tax Rates page.
Also, you can find all Business Tax Forms and Publications for 2023 Tax Filing Season (Tax Year 2022) for corporate and unincorporated businesses on the OTR website. Forms are supported by booklets with instructions.
Sales and Use Tax, Alcoholic Beverage Taxes, and Tobacco Taxes
If your business sells tangible personal property or services, or rents those to other businesses and individuals, it is required by law to pay sales tax. In case a business buys goods outside the District, but uses/stores/consumes them within the District, it pays a use tax.
You can check the current tax rates for sales and use tax as well as tax rates imposed on alcoholic beverages, cigarettes, and tobacco on the Tax Rates and Revenues, Sales and Use Tax, Alcoholic Beverage and Tobacco Taxes page at the Office of the Chief Financial Officer website.
Personal Property Tax
According to the OTR, corporations and partnerships that own personal property must pay a personal property tax return.
The payment is done through the MyTax.DC.gov portal.
Withholding tax is an obligation for all employers. A certain amount of money is deducted from employees’ paychecks for tax withholding.
Employers may be required to pay withholding taxes on a monthly, quarterly, or yearly basis. To find all the forms and instructions, check the Withholding Tax Forms for 2023 Filing Season (Tax Year 2022/2023) page on the OTR website.
Unemployment insurance tax
All employers are required to register with the Department of Employment Services, i.e. DC Employer Self-Service Portal (ESSP) to pay unemployment tax.
Employers can find more information on this type of tax, as well as their rights and responsibilities, in the Unemployment Insurance Handbook for Employers.
Step #11: Get the necessary licenses and permits for your business in the District of Columbia
All businesses in the District of Columbia are required to get a business license. The type of a business license is determined by the activities a particular business conducts.
There are different business licensing categories, but before getting a license, businesses have to complete 4 steps:
- Corporate and trade name registration,
- Registration with the IRS and DC Office of Tax and Revenue,
- Registration with the Office of the Zoning Administrator, and
- Basic Business License (BBL) Application.
There are 2 ways to apply for a business license:
- Online, and
- In person.
If you decide to apply online, you can check out the DC Business Licensing Portal and get personalized checklists with all the requirements. You can also use My DC Business Center where you log in with your Access DC credentials.
Application requirements for various business licensing categories are found on the Business Licensing Division page on the DLCP website. You’ll find requirements, fee schedule, and a link to apply online under each category. At the same page, you have BBL Resources such as BBL FAQ and BBL Maintenance.
If you want to apply for a business license in person, you can do so by paying a visit to the DLCP Business License Center, 1100 4th Street, SW, 2nd Floor, Washington, DC 20024. You don’t have to arrange appointments as the staff will direct you to kiosks where you can apply for a license through the DC Business Center. The service at kiosks is paid by credit/debit card.
The Code provides Basic business license application fees and renewal fees in DC.
Occupational and Professional Licensing (OPL)
In the District of Columbia, there are more than 125 occupational and professional categories. At the given link, you’ll find the boards, commissions, and programs in charge of reviewing applications, regulating the rules and procedures in different professions, organizing examinations, etc.
Also, you’ll find links leading to licensing procedures for particular occupations and professions.
To apply for an occupational and professional license, you’ll need an Access DC account. When your application is approved, you’ll be able to print it.
Certificate of Clean Hands
The Certificate of Clean Hands proves you:
- Don’t owe more than $100 to the OTR in any fees, taxes, penalties, or fines,
- Are registered for all the required taxes, and
- Have filed all your tax returns.
In case you owe money, your business will be denied licenses, permits, grants, and other City goods or services.
When you apply for a BBL, you’ll be asked to provide a registered tax number that you have previously registered at MyTax.DC.gov.
You can obtain the Certificate online via MyTax.DC.gov. To find more information on the Certificate, visit the Certificate of Clean Hands page on the OTR website.
Federal licenses and permits
Some businesses require a federal license or permit to carry out work. The SBA provides a full list of business activities regulated by a federal agency:
- Alcoholic beverages,
- Firearms, ammunition, and explosives,
- Fish and wildlife,
- Commercial fisheries,
- Maritime transportation,
- Mining and drilling,
- Nuclear energy,
- Radio and television broadcasting, and
- Transportation and logistics.
Step #12: Open bank and credit accounts for your business in the District of Columbia
It can be really tricky to have your business earnings joined with your private money. Even though it might not cause problems at the beginning, it gets more difficult to keep track of what belongs to you and what to your business as time passes by.
Therefore, there are many benefits in opening a designated business bank account:
- It helps you monitor all business expenses,
- It enables liability protection for your personal assets,
- It contributes to your business’ credit profile, and
- It enables direct customers’ payment to your business.
Typically, to open a business bank account, you’ll need an EIN or SSN if you are a sole proprietor.
However, you shouldn’t hotfoot it straight to the first bank and open an account. Take time to shop around and study up on different bank offers for businesses. This way, you’ll decide on the offer that best suits your business needs.
Step #13: Get the insurance you need
Getting business insurance is always a smart move. You never know if someone can get injured at work or if one of your products hurts your customer. To be on the safe side and keep your business and employees secure, consider buying insurance.
There are dozens of insurance types you can choose from, and we are going to mention some of them.
Liability insurance, also known as Commercial General Liability (CGL), covers 4 categories:
- Bodily injury,
- Personal injury including slander and libel,
- False or misleading advertising, and
- Damage caused to someone else’s property.
A standard package with liability insurance doesn’t cover everything you might need. Therefore, you may consider other types of insurance such as:
- Employer practices liability coverage — covers claims such as sexual harassment and race and gender lawsuits,
- Automobile liability insurance — required in the District at least at a minimum level,
- Professional liability insurance — also known as Errors and Omissions insurance; covers wrongful practices of healthcare providers or lawyers,
- Worker’s compensation insurance — obligatory for companies with employees; it protects business owners from claims by employees who were injured at work or got an illness,
- Umbrella liability policy — gives extra protection with coverage limits from $1 million to $5 million,
- Crime insurance — protects from theft and intended damages,
- “E-insurance” — known as internet business insurance and covers damages made by hackers and viruses,
- Health insurance — visit the DC Health Link to select the best health insurance,
- Insurance in case of disaster strikes — please visit the Disaster Planning for Small Businesses page on the Department of Insurance, Securities and Banking website.
Small businesses in the District usually opt for a business owner’s policy (BOP), which includes property insurance, business interruption/continuation insurance, and liability insurance.
Step #14: Hire the employees you need
We already know that Washington DC ranks high regarding workforce education. To support employment, the Department of Employment Services (DOES) helps job-seekers through American Job Centers.
There are 3 centers — AJC Headquarters, AJC Bertie Backus, and AJC Reeves Center — open for in-person services. These services are available by virtual appointment only, and you can schedule your appointment via the American Job Center Scheduling System.
On their website, American Job Centers offer various workshops covering employment topics such as job application completion, interviewing skills, writing resumes and cover letters, etc.
American Job Centers provide many job-seeking services such as career counseling and planning services, classroom and in-house training, and access to online job ads.
To get information on employment and unemployment services, agencies, and programs, the DOES recommends you check out DCNetworks — a virtual one-stop network sharing practical advice on employment topics.
Step #15: Create an online presence for your business
If you want to promote your business, you can stick to the old advertising methods such as Yellow Pages and radio ads, or simply let the news about your business spread by word of mouth.
But, modern times demand modern advertising methods for your business, and the best method is online promotion.
There are 3 effective ways to promote a business online:
- Create a Google business account,
- Create a business website, and
- Create social media profiles.
Create a Google business account
Whether we like it or not, if something isn’t on Google, it doesn’t exist. So, creating a Google business profile is a must.
Use your account to share your business information such as address(es), phone(s), working hours, etc.
You can add your business to Google Maps so people can easily find it.
Another advantage of having a Google account is that you can leave information on your products and services and let customers leave reviews.
In addition, you can post business photos and videos that can attract customers.
Create a business website
Remember when we told you to consider buying a domain name? If you have done that, you are ready to create a website to represent your business online.
But, bear in mind that a website needs to be presentable — meaning it should be informative and up to date.
You can use your business website to present:
- The company and what it’s about,
- Contact information,
- Employees and their expertise,
- Products and services,
- Promotions, etc.
Also, you can add photos and tutorials to engage your customers.
If you have some knowledge about building a website, you can do it on your own using website builders such as GoDaddy, Zyro, and WordPress.
If you have a bigger budget, you can hire a professional marketing agency to help you.
Create social media profiles
You can’t go wrong with business promotion on social media. Millions of people use popular platforms such as TikTok, Instagram, and YouTube for promotion.
We advise you to choose the right social media and adapt the content to your target audience.
If you want to promote your products and/or services on social media, try to maintain online activity by writing posts on a regular basis, and don’t forget to communicate with your followers. You can also organize surveys and giveaways for your customers.
💡 Plaky Pro Tip
Check out our social media content calendar to find ideas and advice on how to build your social media presence:
Step #16: Choose the right business software
With so many tasks in progress and so many on hold, businesses often opt for project management software to aid them in organizing all those responsibilities.
This type of software offers a user-friendly overview of all the tasks and the degree of their completion. Use cases for such software are numerous such as sales, CRM, HR, development, etc.
In Plaky, you can organize your projects and processes in a table or Kanban view and:
- Assign due dates,
- Assign people to their tasks,
- Add tags, statuses, descriptions, files, etc.
- Get notified of any changes taking place on a task you are assigned to,
- Use project management templates instead of starting your projects from scratch.
Plaky allows you to leave comments and invite teammates to take part in certain tasks. You can also check progress by making use of the timeline field that shows how far along your team is with certain tasks.
FAQ about starting a business in the District of Columbia
This section offers brief answers to some of the most frequently asked questions about starting a business in the DC
How much does it cost to start a business in DC?
The answer to this question depends a lot on the type of your business since different business types have different fees imposed by the Department of Licensing and Consumer Protection (DLCP).
Say you want to start an LLC in DC, you need to count on the following costs:
- Name reservation,
- Trade name,
- Registered agent,
- Articles of Organization,
- C of O or HOP,
- Certificate of Clean Hands,
- Business license(s),
- Biennial report,
It is recommended that you obtain business insurance, and if you like, you can also invest money in a quality website.
Is DC a good place to start a business?
The District of Columbia has a high cost of living and high taxes which might not make the District of Columbia an ideal place for small business owners.
On the other hand, due to its highly educated workforce, Washington, DC is a good place to start a business because:
- It’s among the 10 best US places to live for young professionals, and
- It offers numerous business incentives.
Also, according to the DC’s 2023–2027 economic development strategy, the DC government expects 35,000 new job openings in booming sectors such as education, research, and technology.
How to start a small business in Washington, DC?
There are many steps you need to take when starting a business. You can start by making a solid business plan to get a clear view of all the steps.
All business entities need to appoint a registered agent, and this person can be of great help in giving advice on filing, due dates, fees, etc.
Some major steps in the business formation process are:
- Choosing a business entity,
- Business name reservation,
- Trade name reservation,
- Getting the Certificate of Occupancy or Home Occupation Permit,
- Choosing the best funding option,
- Choosing a location,
- Business registration,
- Reporting business taxes,
- Getting a business license, and
- Getting insurance.
To delve deeper into these steps, read the whole article on how to start a business in the District of Columbia.
What is required for a business in DC?
Some of the basic requirements for DC businesses include:
- Reserving a business name,
- Getting the Certificate of Occupancy or Home Occupation Permit,
- Choosing a location,
- Registering the business,
- Reporting taxes, and
- Getting a business license.
District of Columbia business resources for further reading
This guide covers the most important steps in the business formation process. However, there is always space for further research.
With this in mind, we have compiled a list of valuable resources to help you find reliable information:
- Department of Licensing and Consumer Protection (DLCP) — the department dealing with business regulations and licensing. On the Department’s website, you can find forms and documents, check out videos and tutorials, apply for different licenses, and much more.
- DC Government — the principal website of the DC government covering topics on residents, visitors, education, etc.
- Department of Small and Local Business Development (DSLBD) — offers valuable resources to help your business grow including certified companies database, personalized business counseling, etc.
- Council of the District of Columbia — includes the Code of the District of Columbia, DC and federal laws codified in the Code, and laws of the United Kingdom codified in the Code.
- Obviously DC — provides information on life in DC, hiring, stability and growth, and access to DC.
- Office of Tax and Revenue (OTR) — represents the DC government office dealing with individual, business, real property, and other taxes. They offer tax forms and documents as well as tax guidance.
- Department of Employment Services (DOES) — offers services such as the American Job Center, apprenticeship council, employer services, and much more.
- Internal Revenue Service — represents the US government organization in charge of federal taxes.
- U.S. Small Business Administration (SBA) — offers a collection of business guides, tutorials, and valuable information on funding programs and local assistance.
Starting a business in the District of Columbia — Conclusion/Disclaimer
Hopefully, you have found this comprehensive guide useful and informative enough to encourage you to start your business.
Bear in mind this DC business guide serves for informational purposes only, and it is not an official document — although it includes links to official forms and documents.
Note that this guide was written in Q4 2023, and therefore doesn’t contain any updates and regulation changes imposed after this period.
We kindly advise you to consult a registered agent or other professionals in official institutions before acting on any legal matters.
This guide refers to the District of Columbia only. Legal requirements for other US states may differ significantly.
Plaky is not responsible for any losses or risks incurred should this guide be used without further guidance from legal or tax advisors.