How to Start an LLC in Washington
There is a lot to think about when starting a new business. Even just the seemingly simple step of forming a new business entity is often more complex than you might think. This is especially true for limited liability companies, which have a substantial amount of requirements. In this guide, we’ll show you how to start an LLC in Washington State.
LLCs are a popular business entity structure for Washington entrepreneurs, mostly because of the liability protection that LLCs provide business owners. Plus, an LLC is a bit simpler to maintain each year, compared to a corporation or S-corp.
This guide will break down all you need to know about starting a Washington limited liability company.
Consider using an LLC service
The first decision you will need to make is whether you want to do all the work on your own, or pay a bit extra to use a professional LLC formation service. For many entrepreneurs, it is well worth the cost to save time and hassle while forming an LLC.
There are several LLC formation services, but a few of the best are ZenBusiness, Northwest Registered Agent, and IncFile. These companies provide low-cost, professional services to help you get your business started fast. ZenBusiness is perhaps the best value, with prices starting at $49 and including 1 year of Registered Agent service for free (see step #3 below).
If you use a service, they will walk you through the business formation process from start to finish. If any issues come up, you will be able to contact support for help.
The alternative, of course, is to do the work on your own, by completing the requirements set out by the Washington Secretary of State. The steps below detail this process.
Select a name for your LLC
Selecting a business name for your new company is one of the first steps you will need to take to form a Washington LLC. You want to choose a name that is well suited to your business, and hopefully one that is memorable for your clients or customers.
But beyond simply choosing a “good” LLC name, you must also ensure that it meets certain requirements. One main requirement is that the name must be unique, meaning it’s not already taken by another registered business in Washington. To confirm this, you can conduct a business entity name search online to search a database of all companies registered in Washington.
Company names must also meet other requirements. They must contain the phrase “limited liability company”, or an approved abbreviation such as “LLC” or “L.L.C.” They also cannot contain any restricted words or phrases.
Using a trade name in Washington State
Washington does allow for the use of “trade names”, also known as doing business as names or DBAs. You can register a trade name online with the Washington State Department of Revenue after you have registered your LLC.
What is a trade name, and why does it matter? Essentially, it is a secondary name that you can “add on” to your existing LLC registration. This allows you to do business under the new name, without having to register a separate business entity. Trade names are very useful for branding and marketing purposes, and they also mean that you don’t need to obsess too much about finding the perfect name for your LLC.
Appoint a registered agent
Every Washington LLC is required to have a Registered Agent for their company. This agent is tasked with receiving important legal notices, like the notice a business will receive if it is ever sued. The registered agent’s mailing address is publicly posted on the business registration database, and this address is where many important documents will be sent.
You can appoint yourself as your registered agent, or any other resident of Washington. Alternatively, you can use a registered agent service. It’s definitely worth considering using a service, as this protects your privacy by shielding your mailing address. Plus, a service will ensure that everything is handled accurately and professionally.
If you do use a service, expect to pay around $100 to $150 per year. Some great options include ZenBusiness and Northwest Registered Agent.
You will need to select a registered agent – and have their information ready – before you file the Washington Certificate of Organization (see below).
Complete an LLC operating agreement
Note: This step is optional, but recommended.
An optional, but highly recommended step is to create what is called an LLC Operating Agreement. This is an internal document that LLC members draft and agree to and then keep on file internally. Because it’s not actually submitted anywhere, it’s not required.
Operating agreements are important because they establish details about how your business will actually operate. Crucially, they lay out the key rights and responsibilities of all LLC members/owners. A well-crafted operating agreement can help reduce the chance of running into ownership disputes and other issues in the future. Even single-member LLCs can benefit from an operating agreement, however.
If you use a service such as ZenBusiness to form your Washington limited liability company, you will notice that they offer a free operating agreement template. You can use this to create your agreement. You can also hire a local attorney or business law expert to help.
File LLC Certificate of Organization
The Certificate of Organization (called the Articles of Organization in many states) is the primary document that needs to be filed in order to form an LLC in Washington. This is filed with the WA Secretary of State and can be submitted online or through the mail.
There are a few different costs to be aware of. The first is the WA state filing fee. This is $180 for mailed applications and $200 for online applications and is nonrefundable. This fee is mandatory and covers the cost of processing the documents. There is an optional $50 fee for expedited processing.
There is also an Initial Report requirement. There is no fee for this if it’s done along with the Certificate of Organization online (recommended), but if it’s done at a later date there is a $10 fee (by mail) or $30 fee (online).
To file online
File online with the Secretary of State – Corporations & Charities Division. Pay the $200 filing fee online. Complete the Initial Report filing at the same time to save both time and money.
To file by mail
Download the Certificate of Formation of a Limited Liability Company, and fill it out. Include a $180 check or money order, made payable to the Secretary of State. Include the Initial Report filing at the same time.
Mail the documents to:
Secretary of State
P.O. Box 40234
Or, submit in-person to:
Secretary of State
801 Capitol Way S
Olympia, WA 98501
Next, just wait for Washington to process your application. Online filings are typically processed quicker than mail applications. Either way, expect the process to take up to 1-2 weeks.
Apply for an EIN
An employer identification number – or EIN – is an important federal tax identification number issued by the Internal Revenue Service. Since it’s a federal number, it has nothing to do with Washington – but most Washington LLCs should still get one.
The EIN is something like a social security number, for your business. It’s used on tax filings and communications with the IRS. It’s also required to hire employees. You may even need an EIN to do things like opening a bank account for your business.
Simply fill out this application on the IRS website to apply for an EIN. It’s quick and easy, and most EINs are issued immediately. There is no cost to apply for an EIN.
Apply for business licenses and permits
Most businesses will require additional licenses and/or permits in order to legally operate in Washington. The steps above form your LLC as a legal entity, but that’s often not the only requirement for businesses.
You will need a Washington State business license – the business license application can be handled online with the Washington State Department of Licensing (DOL). You will also likely need a business license in the city or county where you plan to operate (and multi-location companies may need multiple licenses).
You will also need to register for certain tax accounts, including Washington employer taxes/unemployment insurance taxes. You can check with the Washington Department of Revenue for details.
Businesses in certain regulated industries will likely require additional permits and licenses. Washington State may also require specialized permits. And even local governments handle some of these items, such as health permits.
Keep your business in good standing
There are many ongoing compliance tasks that you will need to handle to keep your Washington LLC in good standing. This includes requirements for Washington State, but also for the IRS and even local city/county governments.
There are some requirements that all businesses will face (such as tax filings), and others that only some will face (such as specialized permits for certain industries). You will need to research the specifics of your business.
In general, here are some of the most common requirements that the majority of Washington LLCs will need to tackle:
- Washington State Annual Report (file online or by mail). This is due every year for all LLCs and has a $60 filing fee
- Washington sales tax returns
- Business and Occupation Tax (B&O) tax returns
- Employer tax returns (payroll taxes)
- Income tax returns
- Federal tax returns
- City/county tax returns
- Permit renewals
- Business license renewals
- And more
To help stay on top of these requirements, it’s a good idea to make calendar reminders for key due dates. We also recommend researching all your requirements ASAP, so that you can plan ahead and know what is required.
If you use a registered agent service like ZenBusiness, they may also be able to help with certain ongoing requirements. They can help directly with some filings (like annual reports), and can also send reminders for some due dates.
Open a business bank account
It is very important to open a dedicated bank account for your business. This is key because it allows you to keep all business transactions separate from your personal transactions. This helps to keep accounting/bookkeeping much cleaner and simpler. Plus, it helps protect your personal assets in the case of a business-related lawsuit.
You can open a business checking account at most banks and financial institutions. Most banks require a small opening deposit (cash or check), a business license, and an EIN. However, there may be other requirements, so it’s wise to call ahead to see what the bank requires you to bring in.
At this time, it’s also wise to start looking into other financial products that may benefit your company. This includes business credit cards, business insurance, etc.
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