Washington State is home to a thriving small business community with more than 608,000 small businesses registered in the state. Small businesses account for 1.4 million jobs, which is more than half of the state’s private-sector workforce. If you’re looking to establish a business in Washington State, you’re in good company, and many resources are available to help you on your journey.
We’ve created this guide to help you set up a limited liability company (LLC) in Washington. This is the first step in getting your business started in the state.
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Before Establishing an LLC in Washington State
Before you pay to file for your LLC, take a moment to do a little research. This can help to save you time and money down the road.
Check Name Availability
Before registering for an LLC, you’ll want to make sure that the name you want to use is available. This is free to do through the Secretary of State and only takes a few minutes. The Secretary of State limits how similar names can be to avoid consumer confusion about companies and what they do. If the search comes up with companies with the same name as yours, adjust your name so that it will be accepted without the risk of infringing on another company’s name.
Hire a Registered Agent
Every Washington State LLC will need to appoint a registered agent for the company. This person (or business) must have a physical address in the state and be willing to accept all legal documents on behalf of the LLC. The agent must agree in writing to act as agent.
Often, the registered agent is a member (owner) of the LLC, but an LLC may instead hire a registered agent to fulfill this requirement. A registered agent costs anywhere from $50 to $300 per year. Be sure to vet out anyone hired for this role.
Reserve Your Domain Name
Few businesses get by without a website in today’s digital age. You’ll want to buy your domain name as soon as possible to ensure that no one else takes the name. Do a domain name search online to find a name that is available. There are many companies that can help you secure the domain name that best suits your business for anywhere from $0.99 to $49.99 per year.
Register Your Washington State LLC
To register your LLC in Washington, you’ll need to file a Certificate of Formation. You can file the certificate online or by mail. The fee for online filings is $200 and your paperwork is typically processed in two business days. The fee for paper filings is $180 and the Secretary of State processes these filings in the order they are received. Expedited service is available for an additional fee.
Out-of-state LLCs registering to do business in Washington file a Foreign Registration Statement. You must attach a Certificate of Good Standing from your state of formation dated no more than 60 days before the date you file the registration statement. Foreign LLC filings have the same fees and processing times as domestic LLC filings.
Mail documents to:
Office of the Secretary of State
Corporations & Charities Division
PO Box 40234
Olympia, WA 98504-0234
After You Form Your Washington State LLC
Once you’ve completed the Certificate of Formation and have gotten it approved by the Secretary of State, you’ll want to take the following steps in completing the establishment of your LLC.
Obtain a Business License
To legally operate in the state, you must have a valid business license. Your LLC can obtain the business license from the Department of Revenue. It generally takes up to ten business days to process the request, though it can take up to three weeks for companies that need city or state endorsements. Application fees vary based on the type of business you have and what endorsements are required.
Create an Operating Agreement
The operating agreement outlines how the business will go about running day-to-day operations. It isn’t required but is an important step in making sure that all members of the business understand their roles and responsibilities in the company. It also sets the foundation for how the company’s mission will be accomplished.
The operating agreement generally contains:
- Members’ names and contributions
- How profits and losses get distributed
- Holding meetings and voting rights
- How to admit new members and deal with departing members
- Management of the LLC
- Dissolution procedures
Once the operating agreement is complete, place it in the company records book with the formation certificates from the state.
Get an Employer Identification Number (EIN)
Go to the Internal Revenue Service (IRS) website and obtain a free EIN. This is a tax identification number used for tax purposes and to get a bank account. Most LLCs are required to get an EIN.
File an Initial Report
Washington State requires that any new LLC file an Initial Report with the Secretary of State within 120 days of formation. This is the first annual report filed with the state. There is a $10 fee to file this report, whether by paper or electronically. You can expedite its filing by paying an extra $50 fee. Washington LLCs must also file an annual report each year.
Correcting Filing Mistakes
You can amend your Certificate of Formation with the Secretary of State. It costs $30 to do so with the Statement of Correction form found online. Notate what corrections or amendments you need to make. Be as clear as possible with the corrections, as the form asks you to specify inaccuracies and defects in the original paperwork.
Dissolving Your Washington State LLC
You can dissolve your Washington State LLC by filing a Certificate of Dissolution with the Secretary of State. The form is very straightforward and only requires the company name, where the stamped form will be mailed and a signature of a manager or member.
Frequently Asked Questions
How much does it cost to start an LLC in Washington State?
Filing the forms online will cost $200 to establish an LLC in Washington State. New companies can save $20 by filing it via mail sent to the Secretary of State, but processing times may be longer.
How long does it take to set up an LLC in Washington State?
The length of time it takes to process your LLC filings will depend on whether you filed online or by mail, whether you paid for expedited processing and the workload in the Secretary of State’s office. Prior to filing, you may spend time researching and choosing a business name and selecting a registered agent.
Do I need an LLC service?
Everything an LLC service can do, a business owner can do on his or her own without the service fees (fees still must be paid to the state or other entities for filing, and other costs may be incurred, but they’ll undoubtedly be lower than paying someone else and also paying those fees). LLC services can provide value to business owners who don’t want to do the filing on their own and can provide access to other legal services that may provide added value from someone with experience. A local business lawyer can also form your LLC for you. While this may cost more than an online service, a lawyer can be a good option if you prefer a personal relationship with someone who can help you with a variety of legal questions and issues.
Can I have an LLC without a business license?
Washington State requires LLCs to have a business license.
What are the different types of LLCs to set up?
When determining how to start an LLC, there are several types of LLCs to choose from. Knowing the LLC structures available is essential for selecting a business model that most closely aligns with the nature of your company and how you intend for it to operate. These LLC structures include:
- Single-member LLC: This LLC is owned and operated by a single person. While similar to a sole proprietorship, this LLC provides additional tax benefits and liability shielding.
- Multimember LLC: Standard LLCs with more than one member, often divided into manager-managed or member-managed entities.
- L3C: These entities, also known as “low-profit liability companies,” act as a bridge between nonprofit LLCs and for-profit LLCs where the business cause remains the primary focus rather than earnings.
- Series LLC: Series LLCs are tiered business structures where the topmost LLC owns a series of lower-tiered LLCs through limitless segregation. Each LLC in the series operates mostly independently of one another; their assets are also primarily separated.
- PLLC: A specialized LLC, this business formation type is only available to certain licensed professionals.
- Restricted LLC: Restricted LLCs are not taxed during the first 10 years of formation. Likewise, they cannot make distributions to members. It must be stated in the articles of organization that the LLC will be restricted.
What kind of tax flexibility does an LLC provide?
LLCs can be taxed as sole proprietorships, partnerships, C corporations (C-corps) or S corporations (S-corps). This choice allows members of an LLC to minimize their tax burden.
