Find out how to qualify your LLC to conduct business in Washington, D.C.
If you own a company that was founded anywhere other than Washington, DC (DC), you must qualify or register it in DC in order to conduct business there. The requirements for qualifying your foreign (non-DC) limited liability corporation (LLC) to conduct business in the District of Columbia are summarized below.
The District of Columbia, unlike other states, does not have particular regulations for registering international LLCs. Instead, DC has a set of regulations that govern foreign company registration in general. These companies are referred to together as “foreign entities” under District of Columbia law.
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What exactly is a Foreign LLC?
If your LLC is founded in another state, it is referred to as a foreign LLC in the District of Columbia. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Indiana, for example, is a foreign LLC in Illinois.
Doing Business in Washington, D.C.
You must register your foreign LLC with the District of Columbia if you are “doing business” in DC, according to District of Columbia foreign entity legislation. What exactly does this mean? As with other jurisdictions, DC law does not define the term “doing business” with connection to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
a state-owned shop
a state government office, or
In the state, a sales agent.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Like other jurisdictions, the District of Columbia’s international business statute outlines specific acts that do not constitute conducting business in the state. Among the objects mentioned are:
defending or resolving a legal action
handling internal LLC matters such as member or management meetings
possessing a state bank account
having a state office, agency, or individuals overseeing your company’s securities
using independent contractors to market
Soliciting or getting orders that must be accepted outside of the state before they become contracts
establishing or obtaining debt, mortgages, or security interests in real estate
some debts must be secured or collected
executing a single transaction that is not part of a series of comparable transactions, and
conducting business in interstate commerce.
The statute governing foreign corporations in DC also makes it clear that the latter list is not exhaustive; other activities may potentially be exempt. Check Section 29-105.05 of the DC Code for a complete legal explanation of each of the items.
If your LLC’s only operation in the District of Columbia is one or more of the activities mentioned above, you should not be required to register with the state.
Declaration of Foreign Registration
You must submit a Foreign Registration Statement (Form FN-1) with the District of Columbia Department of Consumer and Regulatory Affairs to register your company in the District of Columbia (DCRA). The DCRA website has a copy of the application form available for download. Be aware that the registration form does not apply just to LLCs, but to all forms of enterprises (corporations, partnerships, and so on).
To complete the statement, you must give similar information to that required to register an LLC in your home state. More precisely, you must supply the following information for a DC registration statement:
the name of your LLC as it appears in the state records where it was founded
the kind of entity (LLC)
If necessary, the alternate name under which your LLC will operate in the District of Columbia (an alternate name is only used if your LLC’s original name or something very similar is already in use by another DC registered business, or the original name does not meet DC’s naming requirements for LLCs because it lacks words like “Limited Liability Company” or an abbreviation like “LLC”).
the state in which your LLC was established
the date your LLC was established
when your LLC began or will begin doing business in DC
the street address of the LLC in the state where it was formed, or if none, the LLC’s primary location
your LLC’s registered agent’s name and street location in the District of Columbia
a short description of the anticipated activity that your LLC will engage in in DC
at least one LLC member’s or manager’s title, name, and address
a certificate of good standing or an existence certificate, and
an approved signature with the signer’s name.
The certificate of good standing or certificate of existence supplied with your filing cannot be older than 90 days. You may file on paper or electronically. The charge for filing is $220.
What Happens If You Do Not Sign Up?
If your LLC does business in the District of Columbia but is not registered, it cannot file a lawsuit there. Furthermore, the LLC will be held accountable for any fees, fines, and other charges that it should have paid had it been legally registered, and will be barred from registering until all of those expenses are paid. However, not being registered does not render your LLC’s contracts null and void, nor does it bar your LLC from defending a case in the District of Columbia. Furthermore, the restriction on an LLC member’s responsibility will not be eliminated just because the corporation conducts business in DC without registering.
For more information on foreign entity registration, see the DCRA website.
Creating a Foreign Corporation in Washington, D.C.
The regulations and standards for international qualifying in the District of Columbia are generally the same whether your company is structured as a corporation or an LLC. For paperwork, information, and filing procedures for registering a foreign company in the District of Columbia, see the DCRA website.