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To start an LLC in Washington, you have to file a Certificate of Formation with the Washington Secretary of State. But that’s not it–there are several other nuances to keep in mind to ensure your business is off to a good start. Follow our step-by-step guide below to form a Washington LLC today and kickstart your entrepreneurial journey.
Why Starting an LLC in Washington Is Worth It
A Washington LLC offers a flexible form of corporate organization.
Instead of making business formation processes tedious and bureaucratic, the state offers online formation and registration services. Washington lets you file your Certificate of Formation online, by mail, or in person, allowing you to file the document as per your budget and convenience.
Moreover, you don’t have to maintain corporate minutes or resolutions, making it easier for you to operate.
Registering a new business in Washington also makes you eligible for several types of sales and use tax exemption. All your business losses, profits, and expenses flow through the company to the individual members, meaning you can avoid the double taxation of paying corporate taxes and personal taxes.
What’s more, you can select different ways of distributing profits among members.
You also aren’t liable for your LLC’s debts. If you have an EIN and an operating agreement in place, you’ll have solid proof backing your company’s limited liability status.
The Investment Needed to Start an LLC in Washington
You must pay $200 to file your LLC’s Certificate of Formation with the Washington Secretary of State. In addition, you’ll have to file an annual fee and franchise fee that is due annually by the end of the month in which the LLC was formed. This costs $60.
All Washington LLCs have to appoint a registered agent to be their point of contact as well.
You can either appoint yourself or hire a third-party adjusted agent service. If you decide to hire someone else, this will cost you money, which will vary from one service to another. For context, using ZenBusiness for registered agent services starts at $39 for the first year, plus state fees.
To form a foreign LLC in Washington, you’ll have to pay $200 when filing your Certificate of Formation online or $180 if you file it by mail.
The LLC filing costs include:
- Initial Report — $30 if online or $10 by mail
- LLC Name Reservation — $30
- Foreign LLC Name Registration — $30
- Doing Business As (DBA) Name — $24
- Certified Document Copies — $20
- Certificate of Existence — $20
Depending on your business niche and location, you may also have to pay additional fees to obtain the necessary federal, state, and legal permits and licenses to operate legally in the state.
5 Steps to Start an LLC in Washington
Below, we’ve created a step-by-step guide to show you how to start an LLC in Washington.
Step 1: Choose a Name for Your Washington LLC
Picking a creative and unique LLC name is the first step in forming a company in Washington. You want a business name that not only complies with Washington’s naming requirements but is also easily searchable by potential clients.
As per Washington state law, your Washington LLC name must meet the following guidelines:
- LLC name must be distinguishable from other Washington LLCs, corporations, and partnerships
- LLC name must include the phrase “limited liability company“ or one of its abbreviations (LLC or L.L.C.)
- LLC name cannot include words that could potentially confuse your company with a government agency (Treasury, FBI, State Department, etc.)
- You’ll have to file additional paperwork and include a licensed individual, such as a doctor or attorney, if the LLC name includes restricted words (Bank, Attorney, University, etc.)
You must also ensure your shortlisted names aren’t already taken by any other business. To find out whether your chosen LLC name is available or not, do an LLC name search on the Washington Corporations and Charities Filing System.
Before moving on to the next step, we also recommend checking if your business name is available as a web domain. Today, having a strong internet presence is incredibly important, and it would do you well if your business URL matches your LLC name. You may want to check for available social media handles, too.
Step 2: Appoint a Registered Agent in Washington
Washington state law has made it mandatory for every business entity to have a registered agent. This can either be an individual or an entity who acts as the point of contact between you and the Washington state for service of process and other legal documents.
In other words, a registered agent will act on behalf of your company.
Your registered agent must also have Washington residency in the form of a permanent address in the state and be authorized to do business there.
While you can list yourself as your company’s registered agent, it’s not generally recommended. For instance, if you’re served with a lawsuit, you really don’t want to receive this paperwork in front of your customers and employees. Additionally, being present from 9 AM to 5 PM every day to comply with the law isn’t realistic.
Keeping this in mind, it makes more sense to hire a third-party registered agent service—one that’s reliable, affordable, and offers state-wide registered agent services.
We highly recommend using ZenBusiness. It’s one of the best registered agent services online that can easily handle all your correspondence with the Secretary of State. It can also manage and communicate all your legal and tax documents promptly.
Step 3: File Your Washington LLC Certificate of Formation
This is the stage where you make things official. It is also where you should decide whether you want your LLC to be member-managed or manager-managed.
The Certificate of Formation is the official document that will formally establish your LLC as a recognized legal entity in Washington. You’ll generally need the following details to complete the document:
- Registered agent name and address
- Principal office address and contact information
- Business duration
- Effective date when your business begins to exist
- The executor who will form the LLC and sign the Certificate of Formation
- Assigned governor
- Nature of the business
- A return address for filing
Then you will file your Certificate of Formation with the Washington Secretary of State. This can be done online or by mail.
To file your Certificate of Formation online, visit Washington Corporations and Charities Filing System. You can fill and file your form and pay the $200 fee online.
If you decide to file your Certificate of Formation by mail, you have to download and print the form, then fill it out and mail it to the following address:
Secretary of State
P.O. Box 40234
You can also submit the form in person by visiting the following address:
Secretary of State
801 Capitol Way S
Olympia, WA 98501
If you’ve chosen to hire ZenBusiness as your registered agent, you can also use its services to file your Certificate of Formation. Once the state approves your LLC, all your state paperwork will be directly available on your ZenBusiness dashboard, along with your other important business paperwork.
Step 4: Draft Your Washington LLC’s Operating Agreement
An operating agreement is a legal document that formalizes how you plan on running your business, a breakdown of responsibilities, the profit-sharing ratio, and other critical information. All LLC members must approve and sign the document to make it a binding contract between them.
Full Disclosure: Washington doesn’t require LLCs to draft an operating agreement. However, this is something you don’t want to skip.
You see, the operating agreement serves as proof that all business owners are on the same page with regards to the business, reducing future conflict risks. Also, it helps preserve your LLC’s limited liability status by serving as proof that your business is truly a separate business entity.
Here’s a list of common pointers on an operating agreement:
- The products and services offered by the company
- Every member‘s name and address (and the manager, if there is one)
- Members’ financial contributions or percentage interest in the company
- Every member’s rights and responsibilities
- Every member’s voting powers
- How profits and losses will be allocated
- Rules for holding meetings and taking votes
- Procedure for admitting new members
- Buyout or buy-sell provisions that outline what happens when a member wants to sell their interest, dies, or becomes disabled
- Dissolution procedures
You can also use an operating agreement template from ZenBusiness.
Step 5: Comply With Other Tax and Regulatory Requirements
You may have to comply with additional tax and regulatory requirements. These may include the following:
- Obtain an EIN: You must apply for an Employer Identification Number (EIN) if your LLC has more than one member—even if it has no employees. On the other hand, if you are a one-member LLC, it only becomes mandatory if you have employees or elect to be taxed as a corporation. To get an EIN for your Washington LLC, go to the IRS website and complete the online EIN application. You don’t have to pay any filing fee.
- Apply for Business Licences: All businesses are required to obtain a state business license under Washington state law. You may also need county, city, or other local business licenses. To check business license requirements for your business and location, visit the Washington State Department of Revenue Business Licensing Wizard. You can register and get your state license, as well as other county and state licenses here. You may also require a professional license, depending on your occupation.
- Register With Washington Department of Revenue: Businesses with $12,000 or more in revenue—or that are required by law to collect sales tax—must register with the Washington Department of Revenue. While Washington doesn’t levy any income tax on individuals or businesses, it does impose a business and occupation tax on gross business income.
And that’s how you start an LLC in Washington.
Start by shortlisting names for your LLC that meet the Washington naming guidelines. Then decide whether you want to hire a third-party registered agent (we highly recommend you do!). Once you’re done filling your certificate of formation and completing other state requirements, you’ll finally have a company that Washington officially recognizes as a legal entity!
If all this feels intimidating, you can consider hiring an online legal service to take over. Most of them offer comprehensive packages that include business formation, registered agent services, and other formalities. Also, most of these services are very affordable, giving you greater peace of mind, sans a steep price tag.