Do you want to expand an existing LLC into Washington with a foreign qualification, but you’re not familiar with the process?
This guide will outline important details when expanding your business and explain how to foreign qualify an LLC in Washington.
Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Oregon and you are looking to open a second location in Washington, you may need to complete a foreign qualification in Washington before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Washington. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before doing business in Washington yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
Mull over those penalties for a moment. The fees your business will retroactively owe, like the $180 Foreign Registration Statement and the $60 Annual Report fees, add up fast, especially if you’ve been doing business in Washington for multiple years. But on top of that, you could lose your revenue stream and legal footing as well. All things considered, it’s best to foreign qualify as soon as you begin doing business in the state.
Despite these penalties, if you’re caught doing business without proper registration, it won’t invalidate your existing contracts, and it won’t prevent you from defending a lawsuit in the state.
You can find the legal context for these penalties in RCW 23.95.505 of the Revised Code of Washington.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Washington? The state’s LLC Act doesn’t specifically define this term, but its tax laws indicate that you are considered to be “doing business” in Washington and required to foreign qualify if:
Also, depending on how you structure your LLC and what type of business you do, you may have to pay certain Washington business taxes. When you foreign qualify, it lets the state know that you’ll be paying these taxes. Otherwise, you could run into some heftier fines down the line. For more information on Washington business taxes, see the Department of Revenue website. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to foreign qualify in Washington, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Washington. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
Make a list of your business activities in Washington and then cross-check it with this one. If you find all of your activities here, you’re likely exempt from foreign qualifying. It might also help to check out the in-depth list in RCW 23.95.520. If you have questions, it would be wise to speak with an attorney.
Foreign qualification in Washington is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Washington, your task is to submit a “Foreign Entity Registration” either online or via paper form.
Despite which route you take, you will need to obtain and submit a Certificate of Good Standing from the state where you initially formed your LLC. This certificate cannot be more than 60 days old.
Time is important when registering your business in a new state, and filing online is typically the quicker process. On the S.O.S. foreign entity forms page, choose the “File Online” option next to “Foreign Entity Registration.” This will take you to the online filing portal, where you need to create an account to continue. After you’re signed in, continue with your Foreign Entity Registration by following the prompts. You can pay the $180 filing fee with a Visa, Mastercard, or American Express.
But if you’d prefer to leave a paper trail, download and print the “Foreign Entity Registration” form. The form itself contains step-by-step instructions for how to complete it. If you’re filling it out by hand, make sure to use dark ink. When finished, include a check (made out to “Secretary of State”) and mail your materials to:
Secretary of State
Corporations & Charities Division
P.O. Box 40234
Olympia, WA 98504-0234
In a hurry? You can fast-forward the standard processing time by requesting expedited filing on your paper or online form. This service costs an additional $50 and ensures that your registration is processed within two business days. All expedited mailing must have the word “EXPEDITE” written on the envelope.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.
Don’t forget that each state has its own rules for business entity names, and Washington is no exception. As you’re preparing your foreign qualification materials, check to confirm that your LLC name:
You can also reserve your Washington business name if you’re not quite ready to foreign qualify your LLC.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait roughly two business days for Washington to process your application if you file online. If you file by mail, you’ll need to enclose a $50 additional fee for expedited service to match that two-day turnaround, and even then, it will take a couple of extra days to arrive via mail. In-person expedited filings receive same-day processing, usually within one hour, if filed before 3:30 pm.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Washington state law. For more information about business licenses and more in this state, check out the state’s highly convenient Business Licensing Wizard.
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Washington LLC Annual Report.
The overall costs of operating a Washington LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Washington registered agent.
The service then files your Foreign Entity Registration with the state to qualify your LLC to do business in Washington.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Washington Business Resources
Ready to Start Your LLC?