Legally forming a limited liability company (LLC) in Washington state 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.
Steps to Start an LLC in Washington State
- Step 1: Choose a business name for your Washington LLC
- Step 2: Designate a Washington registered agent
- Step 3: File the Washington LLC articles of organization & Obtain a Certificate of Existence/Good Standing
- Step 4: Prepare an LLC operating agreement
- Step 5: Obtain an EIN (Employer Identification Number) from the IRS
- Step 6: Costs to set up an LLC in Washington
- Step 7: Next Steps
Step 1: Choose a business name for your 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).”
Reserving a name
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.
Using a 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.
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.
Step 2: Designate a Washington registered agent
All Washington LLCs 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 articles of organization & obtain a Certificate of Existence/Good Standing
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. After approval, business owners should obtain a certificate of existence/good standing from the state of Washington. This costs $20 and will assist you moving forward on financial applications and various other business needs.
Step 4: 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 5: 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 6: Costs to set up an LLC in Washington
1. Filing cost: $180/$200
One of the main legal documents for your LLC is the Certificate of Formation (called Articles of Organization in other states). Obtaining it from the Washington Secretary of State (SOS) costs $200 if you file online and $180 if you file in person or by mail.
Online applications are processed within 2 days. Paper filings are processed in the order received, and in-person requests can be processed the same day.
You can request expedited processing on your LLC formation documents for an additional $50 filing fee.
If you wish to register as a foreign LLC in Washington, the filing fees are the same — $180 or $200.
However, you will need to complete a different form, called Foreign Limited Liability Company Registration, and request a Certificate of Good Standing from your home state, which often requires a payment to your home state.
As part of company formation, you’ll also need to file an initial report. It provides general company information and is due within 120 days of company incorporation. The state fee is $10 for mail filings and $30 for online submissions.
2. Registered agent costs: $100 to $200 per year
A limited liability company formed in Washington state must have a registered agent.
A registered agent is an individual or business entity appointed to receive tax notices, legal documents, and service of process on behalf of your LLC.
Your registered agent must have a physical street address in Washington (not a PO box).
They also agree to be present at this address during standard business hours year-round. Luckily, Washington doesn’t charge for appointing or changing your registered agent, so there’s one less cost you have to worry about!
You can be your own registered agent in WA. But many small business owners choose to hire a commercial registered agent service provider instead. That way, they don’t have to worry about being available during the business day in case of service of process. They also don’t have to disclose their personal address — home or office — or worry about address changes with the state.
Washington registered agent services cost as low as $50 per year. Some also provide value adds such as LLC formation services, accounting services, tax preparation help, and other professional services.
3. Trade name registration: $5
If your LLC operates under a name other than the legal name registered with the Secretary of State, you must file for a DBA (Doing business as name) or a trade name with the Washington Department of Revenue (DOR).
Trade name registration cost in Washington is just $5. You can register multiple DBAs for your LLC. But you’ll have to pay the $5 filing fee for each one.
You can place an application along with the mandatory business license (more on this in the next section!).
Unlike many other states that require you to renew your trade name, trade name requests in Washington don’t expire. Your trade name registration remains in effect until you cancel it. There’s no charge for canceling a trade name.
4. Washington LLC name reservation: $30
Coming up with a fine-sounding business name is challenging. Once you’ve landed at that ideal option, make it off-limits to other business owners.
Washington lets you place a name reservation for up to 180 days. The cost is $30.
Pro tip: Before you file the form, do a name search on the Washington Secretary of State’s website. Ensure your business name is different from the registered ones and contains “Limited Liability Company” or some version of the “LLC” abbreviation.
Step 7: Next Steps
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 protection 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.
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.
Washington requires all businesses to have a general business license if any of the following conditions apply:
- You plan to hire employees in the next 90 days
- You operate under a name other than your LLC’s legal name
- Your gross income is at least $12,000
- Your LLC meets nexus threshold reporting requirements
- You must pay taxes or fees to the Washington Department of Revenue
For a new business, the business license application fee is $50 + extra city/county fees if applicable. The endorsements are issued on the county or city level, and fees vary but are usually less than $100.
Use the Business Licensing Wizard to determine which types of licenses and extra endorsements on the city/county level you may need. Then complete the application form online.
Apart from a general business license, some regulated professionals also need to apply for an occupational business license.
These professions include accounting, architecture, veterinary, real estate, and healthcare, among others.
Professional business license registrations are processed by the Washington State Department of Licensing. Costs vary:
- Cosmetology, barber, hairdresser license – $300
- Court reporter license – $150
- Driver for hire/taxi license – $110
Does Washington have an annual LLC fee?
Yes. Washington requires all LLCs to renew registration annually.
It’s done by filing an annual report with the Secretary of State. The annual report fee in Washington is $60, whether filed online or by mail.
What taxes do LLCs pay in Washington?
If you make retail sales in Washington state, you’ll have to obtain a sales tax license.
Rates vary by county and the type of transaction: a retail sale, providing labor, or leasing tangible property, for example. You apply for the sales tax license application as part of the state business license application, and it costs $19.
In addition to the general business license, your LLC may need to pay a business & occupation tax or gross receipts tax. Rates vary and are determined by your industry and can be as high as 1.5%.
Other types of state business and occupation taxes may also apply to your type of business.
Washington doesn’t have a state income tax.
LLC members living in this state don’t have to pay extra state personal income taxes. You only pay federal income taxes calculated on your federal tax return.
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Last updated: Sep 2023