What is a limited liability company (LLC)?

A limited liability company (LLC) is a type of business structure that is recognized by the District of Columbia that combines the advantages of both corporations and partnerships. An LLC provides the limited liability protection, meaning that the owners (also known as “members”) are not personally responsible for the debts and obligations of the business. Additionally, the LLC is a pass-through entity, meaning that the LLC’s income and losses pass-through to the members’ individual tax returns. This enables members to make distributions from the LLC without incurring double taxation, which is the case for corporations. In the District of Columbia, LLCs are governed by the Limited Liability Company Act of 2010. This act outlines the requirements and rules that LLCs must follow in order to form and operate in the District of Columbia. This includes filing formation papers with the Corporations Division of the DC Department of Consumer and Regulatory Affairs. Once the LLC is formed, the members must comply with state laws regarding meetings, governance, and other rules. An LLC is a great option for businesses looking for asset protection and flexibility in the District of Columbia. With the protections of limited liability and the convenience of pass-through taxation, LLCs are a popular choice for business owners looking for a better way to run their business.

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What is a limited liability company (LLC)?

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