How to Form a Corporation in District of Columbia
To establish a corporation in District of Columbia, here's everything you need to know.
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To form a corporation in District of Columbia, you need to take the steps set forth below. To find out what’s required to form a corporation in any other state, see Nolo’s 50-State Guide to Forming a Corporation.
1. Choose a Corporate Name
Your corporation's name must contain the word “corporation”, “incorporated”, “company”, or “limited”, or the abbreviation “Corp.”, “Inc.”, “Co.”, or “Ltd.”, or words or abbreviations of similar import in another language..
Your corporation's name must be readily distinguishable from the names of other business entities already on file with the District of Columbia Corporations Division. Names may be checked for availability by searching the District of Columbia Corporations Division business name database.
An available name may be reserved for 60 days by paying a $50 fee. Reservations are made online on the District of Columbia Corporations Division website.
2. Prepare and File Articles of Incorporation
Your corporation is legally created by filing Articles of Incorporation with the District of Columbia Corporations Division The articles must include the corporate name and address; the name and address of agent for service of process; the number of shares the corporation is authorized to issue; and the name and address of each incorporator.
The articles may be filed online or by mail. The filing fee depends on the number of authorized shares. The minimum fee is $220 for $100,000 of authorized shares. The fee is $550 for up to $500,000 of authorized shares; $1,100 for up to $1 million of authorized shares; $1,650 for over $1 million of authorized shares.
3. Appoint a Registered Agent
Every District of Columbia corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. A registered agent may be (1) an individual who resides in the District, (2) a business entity with an office in the District, or (3) a commercial registered agent registered in the District. The registered agent must have a physical street address in District of Columbia. The agent should agree to accept service of process on your corporation's behalf prior to designation.
4. Set Up a Corporate Records Book
Set up a corporate records book in which you keep all of your corporation's important papers, including minutes of director and shareholder meetings, stock certificates, and stock certificate stubs. Keep your corporate records book at the principal office of your corporation. You can use a three-ring binder as the corporate records book or you can order a special corporate records kit through a corporate kit supplier.
5. Prepare Corporate Bylaws
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they (1) establish your corporation's operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo’s website or Incorporate Your Business, by Anthony Mancuso (Nolo). Corporate kits also typically contain sample bylaws.
6. Appoint Initial Corporate Directors
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator must fill in an “Incorporator’s Statement” showing the names and addresses of the initial directors. The incorporator must sign the statement and place a copy in the corporate records book. The statement need not be filed with the state. For a sample Incorporator's Statement, see Incorporate Your Business, by Anthony Mancuso (Nolo).
7. Hold Your First Board of Directors Meeting
The first meeting of the corporation's board of directors should be held at which the directors can appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation's fiscal year, and adopt an official stock certificate form and corporate seal. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. Additionally, if the corporation will be an S corporation, the directors should approve the election of S corporation status. It is usually necessary to prepare the minutes over one or two weeks, and then send them to all the directors for their signature. For corporate meeting minute forms, see Nolo’s website or refer to Incorporate Your Business, by Anthony Mancuso (Nolo).
8. Issue Stock
Issue stock to each shareholder. Although not legally required in most states, small corporations usually issue paper stock certificates. Enter each shareholder's name and contact information in the corporation’s stock transfer ledger. A share of stock in your corporation is classified as a security under state and federal securities laws that regulate the offer and sale of corporate stock.
However, the federal government and all states exempt most small corporations from these laws. For example, federal law exempts "private offerings": a non-advertised sale to a limited number of people (generally 35 or fewer); most states have enacted their own versions of this SEC exemption. The Securities Bureau of the Department of Insurance, Securities and Banking administers the District of Columbia’s laws and regulations applicable to securities offerings
9. Comply with District of Columbia Biennial Report Requirements
District of Columbia corporations and foreign corporations registered in the District must submit a report biannually with the Department of Consumer and Regulatory Affairs, along with a registration fee of $300. The report is filed using Two-Year Report for Domestic & Foreign Filing Entity, Form BRA-25.
10. Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements apply to your corporation. These include:
EIN: Your corporation must obtain a federal employer identification number (EIN). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
S Corporation Filing: If the corporation wants to elect S corporation status for tax purposes, it must submit Form 2553 Election by a Small Business Corporation (signed by all the shareholders). The election should be filed within two months and 15 days after the beginning of the corporation's first tax year. See the IRS S Corporation Fact Sheet for details.
Business Licenses: Depending on its type of business and where it is located, your corporation may need to obtain other District of Columbia business licenses. For details, see the Department of Consumer and Regulatory Affairs website.
11. Foreign Corporations Doing Business in District of Columbia
All corporations organized outside of District of Columbia must must register with the superintendent of Corporations of the District of Columbia Regulatory Affairs agency to do business in District of Columbia. Foreign LLCs must appoint a registered agent for service of process physically located in District of Columbia. To register, file a Foreign Registration Statement. The completed application must be accompanied by a certificate of legal existence or good standing from the foreign corporation's home state, dated nor more than 90 days prior to the filing of the certificate.
The statement may be filed online, or by mail. The filing fee is $220.