How to start a Washington DC corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your D.C. corporation.

How to start a corporation in Washington D.C.

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your D.C. corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Washington D.C. requirements:

• Your name must end with "Corporation," "Corp.," "Incorporated," "Inc.," "Company," "Co., "Limited," or "Ltd."
• Avoid using a deceptive or confusing name. For example, don't name your corporation "Noah's Ark Pet Supplies" if you sell teaching supplies.
• Make sure your name is distinguishable from that of any other existing business name. Your name shouldn't be deceptively similar to another Washington D.C. business that has already been filed or reserved.
• The exact name of your Washington D.C. corporation must be included in your biennial report, along with the street address of your principal office and a description of the nature of the business you conduct.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a Washington D.C. S-Corp and C-Corp tax designation

There are similarities between a D.C. S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A Washington D.C. C-Corp can have an unlimited number of shareholders and unlimited stock classes. An S-Corp is limited to a maximum number of shareholders, usually 100, and only one stock class.
• Taxes: A C-Corp is taxed on a separate basis from its shareholders. It files taxes at the corporate level, then shareholders may also pay taxes on individual dividends they receive. S-Corps are "pass-through" tax entities. No taxes are paid at the corporate level, but corporate owners pay tax individually.
• Documents: A Washington D.C. S-Corp must file IRS Form 2553 to elect S-Corp status.

3. Appoint directors and shareholders for your D.C. corporation

Each state has its own personnel requirements for incorporating. In Washington D.C., corporations also need only one incorporator. Additionally, corporations can have a single officer, director, or trustee. The same individual can hold more than one office or position. There are no published minimum age requirements for incorporators, directors, principal officers, or corporate organizers. There is also no published mandate that corporate directors, officers, trustees, or incorporators live in the state. They can receive mail and notice in any jurisdiction, including foreign jurisdictions.

State the number of your corporation's directors in either your Bylaws or your business's Articles of Incorporation. 

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Washington D.C. address) or choose one to do that service for you (if you are not located in Washington D.C. or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Washington D.C.

Once you have a business name and registered agent, you can register your business as a Washington D.C. corporation with the state by filing your Articles of Incorporation. This document may be referred to informally as a corporation's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

Washington D.C. requires that corporations file a biennial report. The report must list the names and street addresses of the corporation's directors and principal officers. If your registered agent is a commercial or noncommercial party, you must disclose this in your biennial report. You must include the street address of your corporation's registered office and the name of its current registered agent. Post office boxes are acceptable addresses but only if they're used in addition to a street address.

You must also disclose in your biennial report the amount of capital stock that is paid up. Issuing stock maximizes a corporation's tax options and benefits. Professionals such as attorneys, accountants, and financial advisors can answer more detailed questions about stock and Washington D.C. corporations.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Washington D.C. must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Washington D.C. corporation.

What to do after incorporating in Washington D.C.

Washington D.C. requires that corporations keep permanent records of the Minutes of their meetings of shareholders and board of directors. They must also keep Minutes of shareholder and director actions taken without meetings. Washington D.C. corporations must also maintain accounting records. The corporation's record of its shareholders must be maintained in a format that permits it to prepare a list of names and addresses for all shareholders, according to class of shares. The list must also state the number and class of shares that each shareholder holds. The corporation must keep its records in written format, or in a format that can be quickly converted to writing.

Your corporation must also keep its Articles of Incorporation and any amendments, as well as its Bylaws and resolutions of its board of directors, even if they don't take place during a meeting. These records must be maintained for three years. Save all writings you issue to shareholders for three years as well, and the biennial reports you file with the Secretary of State.

We have more detailed information about Washington D.C.'s requirements for Bylaws and Meeting Minutes.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Washington D.C. means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Washington D.C., either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you have to keep records like bylaws and meeting notes to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state