Starting a Business in DC

As a place full of resourceful citizens with innovative ideas, DC has the opportunity to become a go-to city for business creation and inclusive economic development.

But unfortunately for District entrepreneurs, the way that DC licenses new businesses is outdated and far too cumbersome, lagging behind many of the city’s peers. With long wait times, costly, recurring fees, and complicated red tape, many Washingtonians just trying to get their businesses off the ground have been left feeling frustrated and helpless.

To illustrate this urgent need for change, District Works has created a flowchart of all the regulatory steps and processes to starting a business in DC. This flowchart makes clear how complex and confusing red tape discourages DC entrepreneurs, particularly those from vulnerable populations, from starting their businesses and achieving their dreams.

We know that District officials seek to build a regulatory environment that supports, rather than hinders, DC’s local entrepreneurs and small business community. But our flowchart shows that there is much work to do before the District realizes this ideal.

Until then, the flowchart serves as a guide for activists and policymakers who wish to make it cheaper, faster, and simpler to start a business in our city.

Submit Expedited Service Action Form EX-1 Solicit an inspection by contacting DCOZ to set up an appointment Is your commercial space less than 5,000 sq. ft.? If DCOZ approves your application, pay $42 to receive C of O $ Yes No Yes No If DCOZ approves your application, pay $42— plus an additional cost for every square foot more than 5,000 sq. ft.— to receive C of O $ Do you wish to reserve your business name prior to forming a corporation? Yes No Nonprofit Corporation Limited Partnership Limited Liability Partnership General Cooperative Association Limited Cooperative Association Statutory Trust Do you intend to register bymail, in-person, or online with the Corporations Division? by Mail or online Do you want expedited service? In-person Yes No Do you wish to register a trade name? appoint a registered agent Do you wish to appoint a commercial registered agent or non-commercial registered agent? Submit Articles of Organization Form DLC-1 to the Corporations Division Do you want expedited service? Yes No MOVE to phase 2 Phase 2: TAX REGISTRATION Phase 1: corporatE registration What is your authorized capital? Up to $100,000 $100,001 to $500,000 $500,001 to $1,000,000 Greater than $1,000,000 Pay $220 $ Pay $550 $ Pay $1,100 $ Pay $1,650 $ Submit Form SS-4 to the Internal Revenue Service (IRS) Yes No Register your FEIN or SSN with the DC Office of Tax and Revenue (OTR) Is your business for-profit or non-profit? For-profit NON-profit Submit Form FR-500 to OTR Submit Form FR-164 to OTR Did you file Form FR-500 online? Yes No Yes No Submit Form FR-500 Part IV to the DC Department of Employment Services (DOES) Submit Clean Hands Certification to OTR Do you owe more than $100 to DC government? Yes you cannot start a business until you resolve excess debt to DC government STOP Submit Clean Hands Online Application phase 3: Zoning Registration Will your business havemore than one employee? Commercialspace HOME Is your business an allowable home-based occupation under DC rules and regulations? Yes Do you wish to operate your business out of your home or a commercial space? Yes No Does your home meet basic regulatory conditions for hosting a home-based business in DC? Yes No your home cannot host your business; pursue commercial space STOP alter your home-occupancy space to meet DC basic conditions, or pursue commercial space STOP Submit Home Occupation Permit (HOP) Application to DC Department of Consumer and Regulatory Affairs (DCRA) Submit copy of driver’s license If you, the business owner, are required to have an occupational license to operate your business, submit a copy of the license If your business is registered as a corporate entity, submit a Letter of Good Standing from the Corporations Division Pay $50 to Corporations Division $ Is your business a child development home? Yes No Satisfy DC basic regulatory conditions for child development homes, as outlined in 11 DCMR U-251 Submit copy of child development home license Pay $36.30 to file HOP Application and supporting documentation $ Find a commercial location for your business Occupantload Change OWNERSHIPChange USE Change REVISION TEMPORARYOCCUPANCY NEW BUILDING Submit C of O Application to DCRA Submit copy of the current C of O for building or leased space Submit copy of issued building permit Does the commercial space have an existing C of O? Submit C of O Application to DCRA Submit copy of deed Submit copy of the signed lease; in cases where a lease has not been executed, the Zoning Administrator may accept a signed letter from the property owner authorizing you to secure a C of O to facilitate the transfer of the business Is your business an eating establishment? Submit an Eating Establishment Questionnaire along with your C of O Application Yes No Submit building permit application with plans to DCRA’s Permit Operations Division Submit completed Inspection Record Is your business an eating establishment? Yes No Submit copy of issued building permit Disclaimer: This flowchart is not intended as a legal guide or legal advice. The regulatory process may be different depending on your specific situation, and we recommend talking to a lawyer who can help you navigate the process. Regulations and processes are subject to change at any time. For the most up to date information, contact the DC Department of Consumer and Regulatory Affairs (DCRA) and other relevant agencies before attempting to start your business. One-Day or three-day processing? one day three day Pay $50 $ Pay $100 $ Pay $50 $ Submit NameReservation Registration Form GN-3 to the DC Department of Consumer and Regulatory Affairs’ (DCRA) Corporations Division Commercial registered agent Non-commercial registered agent Select DC-based commercial registered agent Select DC-based non-commercial registered agent Be prepared to list agent during licensing registration processes Yes No Do you plan to register as a corporate entity? Pay $55 $ Do you wish to register your business as a corporate entity? Yes No Certain types of businesses—family trusts, general partnerships, sole proprietorships, etc.—do not need to register with the Corporations Division One-Day or three-day processing? one day three day Pay $50 $ Pay $100 $ Submit Expedited ServiceAction Form EX-1 Submit Expedited ServiceAction Form EX-1 Submit Expedited ServiceAction Form EX-1 for one-day processing Pay $100 $ What kind of corporate entity type do you wish to register as? Limited Liability Company Business Corporation Submit Statement of Qualification Form DLLP-1 to the Corporations Division Submit Articles of Incorporation Form DLCA-1 to the Corporations Division Submit Certificate of Trust Form DST-1 to the Corporations Division Be prepared to list street address of initial principal office List name of registered agent Submit statement pursuant to the following condition: “If the company will have one or more series that is treated as a separate entity which limits the debts, obligations, and other liabilities to the assets of a particular series as provided in the operating agreement as authorized by § 29-802.06, a statement to that effect” Submit statement that the limited liability company has at least one member Submit listing of organizers’ names and addresses Pay $220 $ Submit number of shares the corporation is authorized to issue List name of registered agent Submit listing of incorporators’ names and addresses—each must sign DBU-1 Decide whether or not to include miscellaneous submissions, such as a statement defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders Submit statement on corporation membership List name of registered agent Submit statement that the corporation is incorporated as a nonprofit corporation under Title 29 Chapter 4 Submit listing of incorporators’ names and addresses Decide whether or not to include miscellaneous submissions, such as: Reviewing relevant IRS rules, and submitting statement regarding whether or not the entity will have tax-exempt status Submit listing ofpartners’ names and addresses List name of registered agent Pay $220 $ Submit listing ofpartners’ names and addresses List name of registered agent Pay $220 $ List name of registered agent List entity’s term of existence Submit statement regarding the entity’s shares or lack thereof Is your entity organized with shares? Yes No Submit statement on share value and amount of authorized capital Submit statement on property rights of members Submit statement of the minimum number or value of shares which must be owned to qualify for membership Submit listing of the maximum amount or percentage of capitalwhich may be owned or controlled by any member, including a statement of whether or not each member is limited to a single share, and whether such single shares are of various par values Submit statement on dissolution of surplus Submit listing of incorporators’ names and addresses—each must sign DGCA-1 Pay $80 $ Submit statement as to the purposes of the entity’s formation List entity’s term of existence List name of registered agent Submit listing of organizers’ names and addresses—each must sign DLCA-1 Is the entity for-profit or non-profit? For-profit non-profit Pay $220 $ Pay $80 $ List name of registered agent Submit statement regarding entity’s number of series Submit listing of organizers’ names and addresses—each must sign DST-1 Pay $220 $ MOVE to phase 2 Pay $80 $ MOVE to phase 2 Yes Submit Trade Name Registration Form TN-1 for filing entities to the Corporations Division Submit Trade Name Registration Form TN-1 for non-filing entities to the Corporations Division Do you need a Federal Employer Identification Number (FEIN), also known as a Tax Identification Number (TIN)? Use your social security number (SSN) in lieu of an FEIN for tax-identification purposes Be sure to have your incorporation articles and/or certificate of trade-name registration ready for submission Are you registered as a non-profit with the IRS? Yes No you must be registered with the IRS before completing your OTR registration STOP Be sure to have your incorporation articles and/or certificate of trade-name registration ready for submission Be sure to have tax returns and adjusted gross income or gross receipts minus returns and allowances ready for submission Do you wish to operate your business out of a physical location? No zoning registration requirements for business that do not operate out of a physical location are unclear STOP Attach supporting documentation to HOP Application, and also submit it to DCRA If your business is registered as a corporate entity, submit copy of its articles of incorporation If your business is registered as a corporate entity, submit copy of its listing of corporate officers Pay $50 to DCRA’s Corporations Division for certified copy of filings ($40 for non-profit entities) $ Pay $50 to Corporations Division for certified copy of filings ($40 for non-profit entities) $ If application is approved by DCRA, pay $36.30 to receive permit $ Attach supporting documentation to C of O Application, and also submit to DCRA Submit copy of existing C of O along with your C of O Authorization Form No Yes Pay $33 to file C of O Application and Supporting Documentation $ Application will be re-routed to the DC Office of Zoning (DCOZ) through a Plan Review Coordinator for review Following completion of any construction, request a zoning inspection from DCOZ Wait for zoning approval Attach supporting documentation to C of O Application, and also submit to DCRA Does the commercial space have an existing C of O? Yes No Submit copy of existing C of O along with your C of O Authorization Form Submit an Eating Establishment Questionnaire along with your C of O Application Pay $33 to file C of O Application and supporting documentation $ Application will be re-routed to DCOZ for review Is your commercial space less than 5,000 sq. ft.? Yes No If DCOZ approves your application, pay $42—plus an additional cost for every square foot more than 5,000 sq. ft.—to receive C of O $ If DCOZ approves your application, pay $42 to receive C of O $ Will the Permit Operations Division require you to submit a building permit application? No Yes Submit building permit application with plans to Permit Operations Division Following completion of any construction, request a zoning inspection from DCOZ Submit C of O Application to DCRA Wait for zoning approval Does the commercial space have an existing C of O? Attach supporting documentation to C of O Application, and also submit to DCRA Submit copy of issued building permit Yes Submit copy of existing C of O and C of O Authorization Form Submit completed Inspection Record Is your business an eating establishment? Yes No Submit an Eating Establishment Questionnaire along with your C of O Application Pay $33 to file C of O Application and supporting documentation $ Application will be re-routed to DCOZ for review Is space larger than 5,000 sq. ft.? Yes No Request final inspection from the DC Department of Energy & Environment (DOEE) Is your commercial space less than 5,000 sq. ft.? Yes No If DCOZ approves your application, pay $42—plus an additional cost for every square foot more than 5,000 sq. ft.—to receive C of O $ If DCOZ approves your application, pay $42 to receive C of O $ Submit C of O Application to DCRA Attach supporting documentation to C of O Application, and also submit to DCRA Does the commercial space have an existing C of O? Yes No Submit copy of existing C of O and C of O Authorization Form Submit copy of issued building permit Submit completed Inspection Record Submit building permit application with plans to DCRA’s Permit Operations Division Is your business an eating establishment? Yes No Submit an Eating Establishment Questionnaire along with your C of O Application Are there any substantive changes of occupancy required? Yes No you must choose a different C of O type STOP Pay $33 to file C of O Application and supporting documentation $ Application will be re-routed to DCOZ for review Is your commercial space less than 5,000 sq. ft.? Yes No If DCOZ approves your application, pay $42 to receive C of O $ If DCOZ approves your application, pay $42—plus an additional cost for every square foot more than 5,000 sq. ft.—to receive C of O $ Will the Permit Operations Division require you to submit a building permit application? Yes No Following completion of any construction, request a zoning inspection from DCOZ Wait for zoning approval Submit C of O Application to DCRA Attach supporting documentation to C of O Application, and also submit to DCRA Does the commercial space have an existing C of O? Yes No Submit copy ofexisting C of O and C of O Authorization Form Submit copy of issued building permit Submit completed Inspection Record Is your business an eating establishment? Submit an Eating Establishment Questionnaire along with your C of O Application Yes No Pay $33 to file C of O Application and supporting documentation $ Satisfy any conditions imposed as necessary Application will be re-routed to DCOZ for review Is your commercial space less than 5,000 sq. ft.? Yes No If DCOZ approves your application, pay $42—plus an additional cost for every square foot more than 5,000 sq. ft.—to receive C of O $ If DCOZ approves your application, pay $42 to receive C of O $ Submit building permit application with plans to DCRA’s PermitOperations Division Following completion of any construction, request a zoning inspection from DCOZ Wait for zoning approval Submit C of O Application to DCRA Does the commercial space have an existing C of O? Attach supporting documentation to C of O Application, and also submit to DCRA Submit copy of issued building permit Submit copy of existing C of O and C of O Authorization Form Submit completed Inspection Record Yes No do you need a core and shell? Yes No make note on c of o APPLICATION Do you need a Conditional C of O? Yes No make note on c of o APPLICATION Is your business an eating establishment? Yes No Submit an Eating Establishment Questionnaire along with your C of O Application Pay $33 to file C of O Application and supporting documentation $ Application will be re-routed to DCOZ for review Is your commercial space less than 5,000 sq. ft.? Yes No If DCOZ approves your application, pay $42 to receive C of O $ If DCOZ approves your application, pay $42—plus an additional cost for every square foot more than 5,000 sq. ft.—to receive C of O $ Operate underan umbrella C of O No Is the C of O issued for the entire building? Yes No you must choose a different C of O type STOP Is umbrella C of O use allowable? Yes No Acquire from building owner or management company the holder’s name, C of O number, and issue date No Request final inspection from DOEE MOVE to phase 4 MOVE to phase 4 MOVE to phase 4 MOVE to phase 4 Phase 4: Basic Business License Application Determine the BBL category that corresponds to your business activity Submit relevant BBL application to the DC Department of Consumer and Regulatory Affairs (DCRA) Satisfy any additional regulatory requirements Pay BBL Fees $ Submit relevant BBL applications to DCRA Attach any supporting documentation to each BBL Application, and also submit to DCRA Satisfy any additional regulatory requirements Pay BBL Fees $ Do you need a Basic Business License (BBL) to operate your business? No Do you still need to obtain an occupational license? Yes No you must pursue an occupational license STOP Yes How many BBLs will you need? ONE multiple Determine your license-requiring business activity Determine the BBL category that corresponds to EACH business activity Determine license-requiring business activities Submit Articles of Incorporation Form DNP-1 to the Corporations Division Submit Articles of Incorporation of Domestic Business Corporation Form DBU-1 to the Corporations Division Submit Statement of Qualification Form DLP-1 to the Corporations Division Submit Articles of Incorporation Form DGCA-1 to the Corporations Division Submit listing of the names and addresses of the directors who will manage the affairs of the association for the first year Submit building permit application with plans to Permit Operations Division Provide your Certificate of Occupancy (C of O), or the holder’s name, C of O number, and issue date if operating under an umbrella C of O—see Phase Three above Yes No you cannot start a business until you resolve excess debt to DC government STOP If necessary, submit Clean Hands Self-Certification Form, or testify on BBL EZ-Form Provide verification of valid cosmetology license approved by the DC Barber and Cosmetology Board Pay $78 category license fee $ Pay $70 application fee $ Pay $25 endorsement fee $ Pay $17.30 10% technology fee $ Solicit an inspection or receive approval from the DC Department of Health (DOH) Provide your registered tax number, acquired from the DC Office of Tax and Revenue (OTR)—see Phase Two above YOU DID IT! You’ve started your business in DC Do you owe more than $100 to DC government? Yes No you cannot start a business until you resolve excess debt to DC government STOP How many seats will your restaurant have? 1-10 seats 11-50 seats 51-100 seats 100 or more seats Pay $450 category license fee $ Pay $54.50 10% technology fee $ Pay $562 category license fee $ Pay $70 application fee $ Pay $25 endorsement fee $ Pay $65.70 10% technology fee $ Pay $673 category license fee $ Pay $76.80 10% technology fee $ Pay $785 category license fee $ Pay $80.80 10% technology fee $ Solicit an inspection or receive approval from DOH Ensure a Certified Food Supervisor is present anytime your business is open to the public Provide Certified Food Supervisor name(s) and certification(s) to DOH inspectors Do you want to serve alcohol as part of your catering business? Submit BBL application to DCRA Provide your registered tax number, acquired from OTR—see Phase Two above Provide your C of O, or the holder’s name, C of O number, and issue date if operating under an umbrella C of O—see Phase Three above If necessary, submit Clean Hands Self-Certification Form, or testify on BBL EZ-Form Yes No Obtain an Alcohol and Beverage Central (ABC) license from DCRA 1-10 seats 11-50 seats 51-100 seats 100 or more seats Do you owe more than $100 to DC government? Provide your registered tax number, acquired from OTR—see Phase Two above Provide your C of O, or the holder’s name, C of O number, and issue date if operating under an umbrella C of O—see Phase Three above Submit BBL application to DCRA Yes No you cannot start a business until you resolve excess debt to DC government STOP If necessary, submit Clean Hands Self-CertificationForm, or testify on BBL EZ-Form Provide a copy of your Occupational License for Class 5A Steam Engineer from the Occupational and Professional Licensing Administration Provide signoff approval from theOccupational and Professional Licensing Administration Pay $289 category license fee $ Pay $70 application fee $ Pay $25 endorsement fee $ Pay $38.40 10% technology fee $ Solicit and submit proof of an inspection from the DC Fire and Emergency Medical Services Department (FEMS) Solicit boiler inspection from DCRA or licensed boiler insurance companies, and submit copy of Certificate of Inspection Provide your C of O, or the holder’s name, C of O number, and issue date if operating under an umbrella C of O—see Phase Three above Do you owe more than $100 to DC government? Yes No you cannot start a business until you resolve excess debt to DC government STOP Submit listing of operators, employees, agents, and contractors who will be involved in running the business Submit BBL application to DCRA Provide your registered tax number, acquired from OTR—see Phase Two above If necessary, submit Clean Hands Self-Certification Form, or testify on BBL EZ-Form Submit a certificate of insurance for the license period pursuant to DC Code and DC Municipal Regulations Submit a current Police Criminal History Report (Form PD-70), acquired from the Metropolitan Police Department (MPD)—or, if you are not a resident of the District, from your police jurisdiction of residence Submit Towing Business/Truck Supplemental Application Submit listing of other locations from which the business will operate Submit Tow Truck Storage Lot Supplemental Application Attach a copy of a deed, lease, contract, or other proof of the right to use the space as a vehicle storage lot Attach a copy of the site plan, or DC Surveyor’s Plat, obtained from the Surveyor’s Office Attach a copy of the valid C of O for that use and location Attach a statement detailing the location, description, and hourly availability of the tow truck Attach a list of the minimum and maximum daily fees which the applicant will charge for the storage of disabled motor vehicles at the applicant’s storage facility Pay $1,550 category license fee $ Pay $70 application fee $ Pay $25 endorsement fee $ Pay $164.50 10% technology fee $ Undergo 30-day background investigation conducted by DCRA Attach a schedule of minimum and maximum fees which the applicant will charge for the use of the tow truck in connection with providing various kinds of towing service, together with a full and detailed statement of the service to be rendered for each stated amount of fee Attach a letter listing ownership interest Submit a sample Tow Truck Service Receipt in triplicate Post a Tow Truck Business Bond in the amount of $25,000 for the duration of the two-year license period, issued byan authorized insurance carrier—or posted as a cash bond with DCRA Attach listing of the primary storage location, year, make, model, Vehicle Identification Number (VIN), and license plate number of each tow truck that will be used by the towing business If another tow truck business occupies the same storage lot, attach one surveyor’s plat with clear delineation of boundaries named and marked for each tow truck business Submit BBL application to DCRA Provide your C of O, or the holder’s name, C of O number, and issue date if operating under an umbrella C of O—see Phase Three above Yes No you cannot start a business until you resolve excess debt to DC government STOP Pay $222 category license fee $ Pay $70 application fee $ Pay $25 endorsement fee $ Pay $31.70 10% technology fee $ Solicit an inspection or receive approval from DOH Ensure a Certified Food Supervisor is present anytime your business is open to the public Provide Certified Food Supervisor name(s) and certification(s) to DOH inspectors Do you want to serve alcohol as part of your catering business? If necessary, submit Clean Hands Self-CertificationForm, or testify on BBL EZ-Form Yes No Obtain an Alcohol and Beverage Central (ABC) license from DCRA Provide your registered tax number, acquired from OTR—see Phase Two above ! ! ! ! ! ! ! ! What type of Certificate of Occupancy (C of O) will your commercial location require? ! Is a zoning inspection required? ! ! MOVE to phase 4 ! ! ! ! Do you owe more than $100 to DC government? ! Do you owe more than $100 to DC government? ! ! Submit BBL application to DCRA Submit Expedited Service Action Form EX-1 MOVE to phase 2 Submit statement as to thepurposes of the entity’s formation Today, there are 128 categories of basic business licenses with differing fees, supporting documentation, and regulatory requirements. Below are the steps to acquire five different licenses. CORP CORP CORP CORP CORP CORP CORP CORP CORP CORP CORP DOES OTR OTR IRS DCRA DCRA DCRA DCRA DCRA DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DCOZ DOEE DOEE DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA BCB FEMS DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DCRA DOH DOH DOH DOH DOH SO OPLA OTR OTR OTR OTR MPD DCRA DCRA CORP DCOZ DCRA DCRA DCRA DCRA This flowchart attempts to outline the general steps to start a business in DC. It does not include requirements for foreign entities, nor does it cover all paperwork or inspections related to occupational licensing, zoning, building permitting, and health. Example One: Beauty Shop License Example Three: Restaurant License Example Five: Dry Cleaners License Example Four: Tow Truck Business License Example Two: Caterer License No OTR Submit Form FR-500 to OTR OTR OTR CORP CORP ! ! Attach any supporting documentation to BBL Application, and also submit to DCRA DCRA OPLA KEY FORM: An application (ex. Certificate of Occupancy Application), piece of supporting documentation (ex. copy of a deed), or organizational information (ex. Articles of Incorporation) that must be submitted to a DC agency to complete the licensing process AGENCY: A regulatory agency, or an office or division within an agency, that entrepreneurs must consult with, gain approval from, or submit payment or forms to during the licensing proces $ Fee: Money that an entrepreneur must pay to a regulatory agency in order to complete the licensing process ! HANG UP: A step which, due to confusion, lack of information, or complexity, might delay or otherwise cause problems for entrepreneurs trying to navigate the licensing process STOP Stop Sign: A point in the licensing process where an entrepreneur may have to stop and re-do a process or piece of paperwork—or even abandon trying to start a business altogether i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i ATTACH ANY SUPPORTINGDOCUMENTATION TO BBL APPLICATION i i i i i i i i i i i i

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