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How to Form an LLC in Washington

Learn to form an LLC in Washington

Legally forming a limited liability company (LLC) in Washington is a great and exciting choice for entrepreneurs.

More than half of the private sector workforce in this state work for small businesses. Washington also has several advantageous tax benefits for companies and individuals and a burgeoning startup scene featuring a mix of large tech companies and innovative SMEs.

If you’re ready to form an LLC in Washington, you need to file a Certificate of Formation with the Washington Secretary of State and prepare other paperwork.

Here’s a step-by-step overview to help get you started in your business formation in WA.


Table of contents

  1. Step 1: Choose a business name for your Washington LLC
  2. Step 2: Designate a Washington registered agent
  3. Step 3: File the Washington LLC articles of organization
  4. Step 4: Obtain an EIN (Employer Identification Number) from the IRS
  5. Step 5: Register with the Washington Department of Revenue
  6. Step 6: Prepare an LLC operating agreement
  7. Step 7: Open a Washington business bank account

Step 1: Choose a business name for your Washington LLC

As a business owner, you want your LLC’s name to reflect the products and services while promoting a strong brand image. But you need to understand the state naming rules.

When choosing a business name for your Washington LLC, here are some requirements to remember.

First, check if your business name is available using the Washington Department of Revenue’s business name search tool.

Remember: your LLC name must be distinguishable from the names of other business entities registered in the state of Washington, including any business name that’s reserved with the state.

The legal name must include words or an abbreviation indicating that your business is an LLC. These include “limited liability company,” “L.L.C.,” or “professional limited liability company (PLLC).”

LLCs providing professional services have additional state-specific requirements for naming. Be sure to check these if applicable!

Name reservations

A business name reservation is useful for holding a selected business name while preparing your formation documents.

You can reserve an available business name for 180 days by filing a name reservation form with the SOS (plus a $30 filing fee). Expedited service costs another $50.

Business name reservation form
Business name reservation form. Source: Washington Secretary of State.

Trade name

When you plan to conduct business under a name other than the legal business name, your LLC must register a trade name or a “doing business as” (DBA) name.

Registering a DBA isn’t the same as forming a new legal entity.

You can register your trade name when filing for a business license application with Washington’s Department of Revenue (DOR). There’s a $5 fee per trade name.

Trademarks

If you want exclusive rights over the use of a mark on the goods your LLC sells, your LLC may wish to register for a trademark instead. If you only do business in the state of Washington, then you can register with the Washington Secretary of State’s Office.

But if your LLC will also do business outside of Washington, then you should register for a trademark with the U.S. Patent and Trademark Office (USPTO).

Step 2: Designate a Washington registered agent

All Washington businesses must have a registered agent.

A registered agent receives service of process of legal documents during regular business hours on behalf of your LLC. They must have a physical street address located in the state of Washington. P.O. boxes are not accepted as registered company addresses.

The registered agent must also provide consent to the WA Secretary of State at the time of appointment.

You can serve as your LLC’s registered agent if you satisfy the above requirements.

Registered agent service

Some LLCs choose to hire a professional registered agent service instead.

It’s a good option if your company doesn’t have a physical street address in the state. Also, the physical address for the registered agent is publicly listed. If this is your home address, using a commercial registered agent service affords more privacy.

Hiring a registered agent service runs from around $100-$300 per year. For many small businesses, it’s more practical to serve as your own registered agent. But consider all factors.

Step 3: File the Washington LLC articles of organization

The key document for forming a Washington LLC is filing a certificate of formation with the Washington Secretary of State. In most other states, this form is called “articles of organization.”

The form can be filed:

  • Online: filing fee is $200. Processing time is about 2 business days.
  • By mail: filing fee is $180. Paper filings are processed in the order they’re received.

For expedited service, there’s an additional $50 fee.

The certificate of formation must include specific information:

  • Unified Business Identifier (UBI)
  • Entity name (or name reservation number)
  • Period of duration
  • Effective date
  • Registered agent and all required information
  • Principal office address
  • Return address
  • Executor information

Foreign LLCs need to include additional information:

  • Requalification (if previously registered with the Washington Secretary of State office)
  • Home jurisdiction
  • Nature of business
  • Date of formation
  • Date the business began doing business
  • Governors
  • Certificate of good standing from home jurisdiction that’s no older than 60 days

Once your forms are approved, you’re officially incorporated!

Step 4: Obtain an EIN (Employer Identification Number) from the IRS

Some LLCs need to apply for a federal Employer Identification Number (EIN) from the U.S. Internal Revenue Service (IRS). It’s used on tax returns as an identifying number for your LLC and may be required for state tax filings.

Single-member LLCs, reporting federal taxes as a sole proprietorship, are not required to apply for an EIN (unless they plan to hire employees).

But partnerships and LLCs filing taxes as S-corporation or C-corporation will need to get this number, as well as several other types of qualifying businesses.

You can apply for an EIN for free on the IRS website. The process is fast and simple. Once the application is complete, you receive your EIN immediately.

Step 5: Register with the Washington Department of Revenue

All business entities doing business in Washington must register with the Washington Department of Revenue (DOR).

WA DOR issues the required general business license for all local companies.

You can file a WA business license application online, by mail, or in person. Registrations are quick, especially if done online. The processing time is usually 2 business days if filed online or 14 days if done by mail or in person.

Upon registration, your LLC will receive its general business license and will be set up to pay sales tax and other local taxes (if applicable).

Step 6: Prepare an LLC operating agreement

Even though Washington doesn’t require LLCs to have an operating agreement, it’s a good idea to have one.

An operating agreement lays out the roles and responsibilities of the LLC members and the internal operational aspects of running a business. It’s an excellent idea for multi-member LLCs to have all provisions documented in one place so that all expectations are spelled out upfront.

If your LLC chooses not to have an operating agreement, then disputes will be resolved in accordance with applicable state laws.

You can prepare an operating agreement yourself, use a customizable template, an online contract builder tool, or hire a business attorney.

Step 7: Open a Washington business bank account

Business owners have to open a separate business bank account. Commingling personal and business finances is a huge no-no. Doing so can result in the loss of LLC protections for personal assets and personal liability.

Apart from helping you stay compliant, business bank accounts come with handy accounting features for preparing financial statements, determining profit distributions, and understanding the expenses the LLC is incurring.

Also, business bank accounts sometimes offer additional services tailored to business entities. For example, Seattle Credit Union offers interest on your balance, a mobile app to transfer money and pay bills, minimal requirements to open up the bank account, and a high number of credits and deposits before incurring a fee.

They offer two options ​​— one with no monthly fee for smaller businesses with minimal monthly transactions and one with a $15/month fee (that’s waived if the minimum daily balance requirement is met).

This is only one example. Check around to find one that works for you.

Washington LLC taxes, costs, and fees

Apart from LLC formation costs, you’ll have to account for ongoing ones. These include:

Annual report cost

Every Washington Limited Liability Company (LLC) must file an annual report to stay in good standing with the state. It’s due every year by the end of the month of your LLC’s registration anniversary and comes with a state fee of $60. It can be filed online or by mail.

Annual Report form for Washington LLCs
Annual Report form for Washington LLCs. Source: Washington Secretary of State – Corporations Division.

The initial report should be filed with the certificate of formation. However, if it’s not submitted with this form, it must be submitted within 120 days following the formation of your LLC, along with a $10 fee.

State LLC taxes

In WA, LLCs don’t have to pay any minimal annual franchise taxes for operating in the state.

But you may need to collect and pay sales taxes on goods sold. Retail sales taxes are collected from consumers and remitted to the WA Department of Revenue.

There’s also a business and occupation (B&O) tax, which can apply to you. The WA DOR provides a rundown of what this business tax entails.

Finally, if you have employees, you’ll need to withhold and pay applicable employment taxes.

Washington B&O tax overview.
Washington B&O tax overview. Source: WA Department of Revenue.

Washington business permits and licenses

Almost every type of WA business entity needs to obtain a general business license from the Washington Department of Revenue.

You need a general business license if your venture:

  • Requires city or state permits
  • Operates under a name different from your full legal name
  • Grosses over $12,000 per year
  • Plans to hire employees within the next 90 days
  • Has to collect and remit sales taxes or other state taxes
  • Deals with specialty wood products

Business License Application

In WA, a business license application (BLA) allows you to do several things at once:

  • Obtain state, city, or country permits, endorsements, and registrations
  • Get optional insurance coverage of LLC members
  • Apply for a Washington State Unified Business Identifier (UBI) number (also known as a tax registration number)

A UBI number is needed to do business in the state of Washington. It’s a nine-digit number that will register your LLC with several state agencies to be used for filings and completing fulfilling other LLC requirements.

WA business license application can be done online. The annual license cost is $90.

Don’t forget that you’ll need to renew your business license as well, and any required permits and licenses.

Occupational Licenses

Apart from a general business license, your LLC may also need extra licenses specific to your profession. Visit the Washington State Department of Licensing’s website for business and professional license requirements.

Need more information?

Pros and cons of forming an LLC in Washington

Starting a business in Washington grants you access to a talented workforce, tax advantages, and a pro-business climate. However, there are some cons that business owners should consider too.

Washington LLC pros

  • Easy online options for filing formation documentation and straightforward filing requirements.
  • No personal income tax for LLC members living in the state. No corporate income taxes are due either.
  • The fast turn-around time to form your LLC and affordable maintenance costs.
  • Extensive resources and guides are provided by Washington state agency websites.
  • WA is a popular location for high-profile technology companies, such as Amazon, Microsoft, and Google, which is enhancing the state’s revenues and opportunities for entrepreneurs.

Washington LLC cons

  • Mandatory business license required + annual renewals.
  • Annual report requirement, plus a filing fee of $60.
  • City license endorsements may be required, along with initial and renewal fees, which means looking at each city and state requirement for where your LLC operates.
  • State endorsement requirements for LLCs conducting certain business activities. State fees may apply.

Key takeaways

  • You can form an LLC in WA online using a convenient and fast document processing system.
  • The baseline company formation cost is $200 for a certificate of formation and $90 for a general business license.
  • WA doesn’t charge personal or corporate income taxes. But some state taxes may be due, such as Manufacturing B&O tax.
  • Local businesses will benefit from a talented workforce and a strong economy.

Washington LLC FAQs

Below are some of the most frequently asked questions (FAQs) about forming an LLC in Washington.

1. How much does it cost to start an LLC in Washington?

To formally start your LLC in Washington, you must file a Certificate of Formation with the Washington Secretary of State. The cost is $200 if filed online or $180 if filed using a paper form. These costs apply to domestic LLCs, foreign LLCs, and professional LLCs.

Charlotte Lauren

Article by:

Charlotte Lauren

Attorney

Charlotte Lauren is an attorney, freelance writer, and consultant. She enjoys writing on finance, legal matters, and budgeting. Additionally, she has a blog on how to save and make money online or through side jobs. Charlotte received a B.S. in Accounting, summa cum laude, and a B.A. in Philosophy, summa cum laude from Virginia Tech (2009). She then received her J.D. from the University of Virginia School of Law in 2012.

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