By Christine Chu

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Washington D.C. is not just a center for political action; it's a thriving community of entrepreneurs, and a center for business innovation. In fact, there are several advantages to incorporating there. These benefits range from tax credit and exemption programs to business incentives (like the Qualified High Tech Companies Program.)

If you’re interested in incorporating in Washington D.C., follow this step-by-step guide to filing formation documents, getting tax identification numbers, and setting up your company records.

1) Check Name Availability

Conduct a name search to check that the legal name of your corporation doesn’t conflict with any other registered name. 

2) Appoint a Registered Agent

Appoint a Washington, D.C. registered agent. They will receive notice of lawsuits and cover other legal services for your business.

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3) File DC Articles of Incorporation

Filing the articles of incorporation is the first substantial step towards incorporating in Washington D.C. The minimum filing fee is $220, but it could be more if you have authorized capital up to $100,000.  Online, mail, and in-person filing options all exist (note: these options have different turnaround estimates.)

To file online, you’ll need to use the DCRA’s CorpOnline portal. The turnaround time is 10 business days online. To expedite the turnaround to just 3 business days, there’s an additional $50 fee;  for 1 business day, $100. 

To file by mail or in-person, download and fill out a paper copy of this form. Expedited mail filings are not usually available at a turnaround of 3-4 weeks. In-person filings require a $100 expedited fee, and are processed the day of your visit.

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4) Establish Bylaws & Corporate Records

It is important for your corporation to keep complete books and records of official proceedings. Your articles of incorporation will be the first documents in your corporate records; those records will grow to include official records of bylaws, meeting minutes, and your EIN.

You should keep permanent records of minutes of a) all meetings with your shareholders and board of directors and b) actions taken with or without a meeting (in accordance with D.C. Code.)

Draft bylaws that will govern your corporation proceedings. These will be ratified at your first board of directors meeting.  Your bylaws will detail how the business will be run/regulated in accordance with D.C. laws (and the Articles of Incorporation.)

5) Appoint Initial Directors

Before directors are elected, initial directors should be appointed to the board until an annual meeting of shareholders. If the incorporator is not named in the articles of incorporation, initial directors can be appointed by that incorporator.

6) Hold Organizational Meeting

As stated in D.C. law, an organizational meeting of the incorporators or initial directors must be held. It is important to keep minutes of the meeting.

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7) Issue Stock Certificates

You may want to issue stock certificates to owners, which will serve as proof of ownership in your corporation. Hold (and keep minutes during) a first annual meeting of shareholders in accordance with state laws. 

8) Get Federal Employer Identification Number (EIN)

Regardless of whether you’re hiring employees, you must obtain an EIN; which will subsequently be submitted to the IRS. You will want to submit the form by mail, phone, fax, or apply for the EIN online. There are no fees for this application and online turnaround is immediate. Do note, however, that the IRS website is only available during certain hours; you will want to print your EIN before closing your application session.

9) Obtain State Tax Identification Numbers and Accounts

State tax registration is consolidated in Washington D.C. through the FR-500 form, which can be filed at no cost by mail or online.

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10) Consider S-Corp Taxation

Your corporation is, by default, taxed as a C-Corp. However, C-Corps suffer from double taxation, as the corporation is taxed on profits and then members pay taxes on their distributions. S-Corp tax treatment avoids this and is generally the best choice for small business. 

11) Obtain Business Licenses & Permits

There are additional licenses and permits you must obtain (as applicable to your business.) There are a range of federal, state, and local requirements; you can search using the Small Business Administration Business License & Permit search tool. This will determine additional required licenses based on business type and locality.

12) Keep Filing to Maintain Your Corporation

File your annual federal and state tax returns. After filing within the first year of registration, Washington D.C. corporations must file biennial (2 year) reports every two years afterwards to remain active (and in good standing.)

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