You might be asking how to register your sole proprietorship if you want to launch a business in Washington, DC. Although the procedure is rather simple, it’s crucial to comprehend each step to make sure your company is lawfully registered and in compliance with local rules and regulations.
The first step is to select a business name. Before establishing your sole proprietorship, you must select a name for your company that is not already being used by another company in the District of Columbia. By accessing the Corporations Division website of the DCRA, you can determine whether the desired business name is still available. To prevent infringement, you might also wish to think about trademarking your company name.
The DCRA’s Business Licensing Division issues Basic Business Licenses (BBLs) to all companies doing business in the District of Columbia. The BBL is evidence that your company is registered and in line with local laws. In person or online, you can apply for a BBL at the DCRA’s Business Center.
The Internal Revenue Service (IRS) issues an Employer Identification Number (EIN), a special nine-digit number, to identify your company for tax purposes. Even if you don’t intend to hire staff, getting an EIN is still advised because you’ll need it to create a business bank account and file taxes. On the IRS website, you can submit an online application for an EIN.
It is a requirement for all companies doing business in Washington, DC, to register with the Office of Tax and Revenue (OTR) and receive a tax registration certificate. You can use this certificate to comply with DC tax regulations by collecting and remitting sales tax, if necessary. Which Is Better: LLC or Sole Proprietorship?
Depending on your company’s needs and objectives, you should decide between a sole proprietorship and an LLC. The simplest and least expensive business structure to set up is a sole proprietorship, however this structure offers no personal liability protection for the owner. A more formal structure and personal liability protection are provided by an LLC, however the establishment of an LLC may involve additional paperwork and costs. Do I Need a Registered Agent in Washington, DC?
You are not necessary to have a registered agent if you are forming a sole proprietorship in DC. However, if you decide to create an LLC, you must name a registered agent who will be tasked with accepting legal paperwork on your company’s behalf. Which Is Better: LLC vs S Corp?
Your business objectives and tax status will determine whether you should choose an LLC or a S Corp. Although an LLC is subject to self-employment taxes, it gives personal responsibility protection and flexibility in management structure. An S Corp is more regulated and subject to additional requirements, but it provides personal liability protection and the possibility of tax savings by allowing business profits to be treated as personal income. What Does a Basic Business License in DC Cost?
Depending on the kind of firm and activity, a Basic firm License in DC might cost different amounts. For a two-year license, the cost can range from $35 to $400. Additionally, there can be extra charges for particular endorsements or permits needed for particular business kinds.
The requirements for registering an LLC in DC could be different from those for a sole proprietorship. You must submit your articles of organization and pay a filing fee to the DC Department of Consumer and Regulatory Affairs (DCRA). Additionally, you’ll need to register for unemployment insurance with the DC Department of Employment Services and get a tax registration number from the DC Office of Tax and Revenue. You might also need to acquire any business licenses and permits required by your particular industry. To make sure you fulfill all requirements for creating an LLC in DC, it is advised to get legal or accounting advice.