How to Start a Limited Liability Partnership in DC | 2024 Guide

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Start a Limited Liability Partnership in DC

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in DC. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in DC, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your District of Columbia LLP, all the steps in this article must guide you.

Steps in Starting a Limited Liability Partnership in DC

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in DC, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and DC General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

– WEBINARCARE EDITORIAL TEAM

Steps in Starting a Limited Liability Partnership in DC

To form a limited liability partnership in DC, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in DC, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the DC business registry. Ensure that your chosen name follows DC naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with DC Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in DC- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the DC Secretary of State business name database and DC Business Name Search. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $50 and mail name reservation fee of Not available. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, online and by mail, which costs around $55. In addition, the DBA’s validity in DC is two year, which you can file in the DC Secretary of State.

You can check out how to file a DBA in DC for clearer understanding.

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Step 3: Designate a Registered Agent

In DC, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or DC Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet DC requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the DC Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the DC Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with DC laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of DC. The default laws in DC might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain DC Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain DC Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in DC.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your DC LLP. Additionally, obtain the necessary DC Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in DC to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Biennial Reports with the DC Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, DC, and local levels.

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Advantages of Forming a Limited Liability Partnership in DC

While the specific advantages of forming an LLP in DC can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in DC:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in DC.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in DC may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in DC.

Cost of Forming an LLP in DC

The cost of forming an LLP in DC may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as DC Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in DC instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership in DC?
A limited liability partnership (LLP) in DC is a partnership in which each partner’s personal liability is limited to their investment in the business.
How many partners are required to start an LLP in DC?
The district of Columbia requires at least two partners to start an LLP.
Can an individual be an LLP partner in DC?
No, an individual cannot be an LLP partner in DC. Only legal entities such as corporations, partnerships, and other LLPs can be partners.
Can an LLP be formed with partners living in different states?
Yes, an LLP in DC can be formed with partners living in different states.
How is an LLP taxed in DC?
An LLP is taxed as a pass-through entity in DC, which means that the profits and losses of the business are passed through to the partners, who report them on their personal tax returns.
Is there a minimum capital requirement for an LLP in DC?
No, there is no minimum capital requirement for an LLP in DC.
Do LLP partners have unlimited personal liability for partnership debts in DC?
No, LLP partners in DC have limited personal liability for partnership debts.
Can an LLP partner be held personally liable for the actions of another partner in DC?
Yes, an LLP partner can be held personally liable for the actions of another partner in DC.
Are LLPs required to have a registered agent in DC?
Yes, LLPs are required to have a registered agent in DC.
How can an LLP be registered in DC?
An LLP can be registered in DC by filing a Certificate of Registration with the DC Department of Consumer and Regulatory Affairs.
Is a DC business license required for an LLP?
Yes, all businesses, including LLPs, are required to have a business license in DC.
Do LLPs in DC need to file annual reports?
Yes, LLPs in DC are required to file annual reports with the DC Department of Consumer and Regulatory Affairs.
What fees are associated with registering an LLP in DC?
The registration fee for an LLP in DC is $220.
How long does it take to register an LLP in DC?
It takes approximately 7-10 business days to register an LLP in DC.
Can an LLP be registered online in DC?
No, LLPs cannot be registered online in DC, but the registration form can be downloaded from the DC Department of Consumer and Regulatory Affairs website.
Are there any restrictions on the names that an LLP can use in DC?
Yes, there are restrictions on the names that LLPs can use in DC. The name must be distinguishable from other businesses and must contain the words “limited liability partnership” or “LLP.”
Can an LLP dissolve in DC?
Yes, an LLP can dissolve in DC by filing dissolution paperwork with the DC Department of Consumer and Regulatory Affairs.
Does an LLP need to obtain any special permits or licenses?
It depends on the nature of the business. Some businesses may require additional permits or licenses.
Can an LLP be converted to another type of business entity in DC?
Yes, an LLP can be converted to another type of business entity in DC, such as a corporation or LLC.
Can an LLP change its name in DC?
Yes, an LLP in DC can change its name by filing a Name Change Amendment with the DC Department of Consumer and Regulatory Affairs.
Can an LLP be sued in DC?
Yes, an LLP can be sued in DC.
Can an LLP be managed by non-partners in DC?
Yes, an LLP in DC can be managed by non-partners.
Can an LLP in DC be owned and managed by foreigners?
Yes, an LLP in DC can be owned and managed by foreigners.
Can an LLP have employees in DC?
Yes, an LLP can have employees in DC.
Are LLPs required to hold regular meetings in DC?
It depends on the LLP’s bylaws. But if stated in the bylaws, then an LLP may be required to have regular meetings in DC.
What types of insurance should an LLP have in DC?
It is recommended that an LLP in DC carry general liability insurance, workers’ compensation insurance, and professional liability insurance.
Can a partner leave an LLP in DC?
Yes, a partner can leave an LLP in DC by filing a Notice of Withdrawal with the DC Department of Consumer and Regulatory Affairs.
How does an LLP in DC distribute profits?
Profit distribution depends on the agreement among the partners, but usually, profits are distributed based on the partners’ ownership interests in the LLP.
Can an LLP in DC operate a business under a different name?
An LLP in DC can operate a business under a different name as long as it registers the name as a trade name with the DC Department of Consumer and Regulatory Affairs.
How many partners are required to start a limited liability partnership in DC?
DC requires at least two partners to start a limited liability partnership.
How do I register a limited liability partnership in DC?
To register a limited liability partnership in DC, you’ll need to file a certificate of limited liability partnership with the Department of Consumer and Regulatory Affairs (DCRA).
How much does it cost to register a limited liability partnership in DC?
The filing fee for a certificate of limited liability partnership in DC is $220.
What is the taxation policy for a limited liability partnership in DC?
In DC, a limited liability partnership is taxed as a partnership, which means that each partner reports their share of the partnership’s profits and losses on their individual tax returns.
Do I need to obtain any business licenses or permits in DC to start a limited liability partnership?
Depending on the nature of your business, you may need to obtain one or more licenses or permits from the DC government.
What are the advantages of forming a limited liability partnership in DC?
Some of the advantages of forming a limited liability partnership in DC include limited liability protection for partners, pass-through taxation, and flexibility in governance.
What are the disadvantages of forming a limited liability partnership in DC?
Some of the disadvantages of forming a limited liability partnership in DC include the requirement for at least two partners, legal and administrative expenses to form and maintain the entity, and the potential for disagreements among partners.
Who can take part in a limited liability partnership formation in DC?
Any two or more individuals, partnerships, or limited liability companies may form a limited liability partnership in DC.
Can I form a limited liability partnership alone in DC?
No, DC requires for at least two partners to form a limited liability partnership.
Are limited liability partnerships required to obtain an EIN in DC?
Yes, every limited liability partnership in DC is required to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
Can I choose any name for a limited liability partnership in DC?
No, in DC a name cannot be identical or deceptively similar to any existing names on the DCRAs public records except for situations indicated in rule 17-5504.
What should I expect in the registration approval process in DC?
The DCRA usually takes four weeks to process and review a certificate of limited liability partnership. You should get informed accordingly when you are submitting all your documents.
Do I need to maintain records of my business’s activities to operate a limited liability partnership in DC?
Yes, every limited liability partnership in DC is required by law to maintain specific written records of its business activity.
Can a foreign LLC form a limited liability partnership in DC?
No, LLCs are banned from obtaining the limited liability partnership structure.
What ages are adequate to serve as partners in a limited liability partnership in DC?
Any individual whose age is 18 or more may serve as a partner in a limited liability partnership in DC.
Can a nonresident of DC form a limited liability partnership in DC?
Yes, non-residents may form a limited liability partnership in DC.
Do all partner’s stakes (capital contributions) in a limited liability partnership need to be reported in the public documents?
Although required to report the nature, timing, and amount of contributions initial capital contributions can be excluded.
Is having a Registered agent mandatory for a limited liability partnership in DC?
Yes, all limited liability partnerships in DC are required to identify and maintain a registered agent.
Who can serve as registered agents in DC?
All registered agents need to be authorized to practice in DC and you may hire an agent service along with or instead of an agent..
What occurrence may lead to loss of the limited liability structure in DC?
Breach of procedure or personal obligations under the CPA or limited partnership status or agreements, making serious errors might lead to corporation restructuring, tax consequences and other important downside effects.
Can any party limited or unrestricted participate in partnership operations under DC’s laws?
DC laws only authorize partners in conjunction with the Partnership agreement have the abilities to run and supervise after the partnership’s Activity to administer the terms of its associations.
Can I use the word “company” as part of the name of my business entity in DC?
Only business corporations and limited liability companies can include the “company” in their names.
what should I have agreed up before forming a limited liability partnership in DC?
It is often advised to chalk out operational terms with your partner, register them within an operating agreement, vet partners’ independence on various aspects,this product can be added inside internal rule.
Is there a minimum contribution requirement for each partner for my DC limited liability partnership?
Although state regulations open doors for agreements regarding contribution amounts and funds allocation, you need at least enough financial backing to manage early costs
Do I need to provide my PAN when filing for registration of a limited liability partnership?
When registering for your DC limited liability partnership, there is no requirement for all partners’ PAN details.

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Conclusion

Starting an LLP in DC may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in DC.

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