Amazon, Boeing, Costco, Microsoft, Starbucks, UPS – these are just a handful of the global companies that started as small businesses in Washington State. Maybe you’re about to launch the next Zillow or Tim’s Cascade Snacks – the first thing you need to do to turn your dream into a reality is to make your business official by forming an LLC in Washington State.
Luckily, we’re here to help. Here is a comprehensive guide to limited liability companies (LLCs) in Washington. You’ll learn how our products and services can help you start, run and grow your business from the ground up.
LLC requirements vary state by state so it’s important that you are well-versed in Washington laws before proceeding. Generally, it comes down to these steps:
Starting a limited liability company in Washington State isn’t as complicated as you may think. It does, however, demand careful attention to detail. Before you can file your Certificate of Formation, there are preliminary matters to consider. These include choosing a unique name that meets Washington state’s criteria, appointing a registered agent to accept legal correspondence for your business, and formulating a comprehensive operating agreement.
It might sound like a lot, but our many tools and support services can make the process of forming an LLC in Washington easier. This leaves you to focus on what you really want to do: build and grow your business.
Before you register your LLC in Washington, you need to decide on a name. Make sure that your LLC name isn’t taken by another company in the state. Also, make sure it is unusual enough to be distinguished. The state has a business name search, but with our Washington business name search page tool, we’ll walk you through it step by step.
Washington state law requires you to include some variation of “Limited Liability Company” as the name’s suffix. You can end your company’s name with the full “Limited Liability Company,” shorten it to “Limited Liability Co.,” or use the abbreviations “LLC” or “L.L.C.”
The state additionally prohibits certain words and combinations of words from appearing in LLC business names. You cannot use words that would suggest your limited liability company is a financial institution, like “banker,” “banking,” “trust,” or “cooperative.” You also can’t combine the words “trust” and “loan.” Finally, you may not use any combination of two or more of the following words: “savings,” “association,” “society,” “home,” “loan,” or “building.”
You might not be ready to take the next step and file your Certificate of Formation right away. Washington gives you the option to reserve your intended name for 180 days, so if you need some time, use our name reservation service to make sure your name is ready when you are.
As you search for available business names, check if relevant domain names are available for those business names. A website is an affordable marketing tool that can drive customers to your business. You want a domain that aligns with your LLC name, making the website easy for search engines to find. Check out our domain registration and domain name search services for more information.
If you plan to use an alternate name for your limited liability company, you’ll need to complete this process twice. Known as a trade name or “Doing Business As” (DBA) name, you’ll first need to check that your trade name is available and compliant with Washington’s requirements. Unlike your LLC’s official name, your trade name should not have any business entity suffix, including “Limited Liability Company,” “LLC,” or “L.L.C.” The trade name should also not include any words relating to financial institutions, such as “bank,” “trust company,” “credit union,” or other similar words or phrases.
Once you’ve found an acceptable DBA name, you will need to register it. This guide to Washington DBAs can give you the specifics.
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Every registered Washington business entity needs to have a registered agent. This is a person or entity acting as the point of contact for service of process and other legal documents on behalf of the business.
The registered agent must meet two conditions:
As an LLC member, you can list yourself as a Washington registered agent for your company; however, this option is not always in your best interest. If you are served with a lawsuit, for example, you don’t want to receive this paperwork at your place of business, with customers and clients around.
Instead, consider our professional registered agent service. We can help you fill this legal requirement and make sure all important documents get to you in a discreet and time-efficient manner.
When you use our registered agent service, we’ll provide you with an agent who’s available to receive important legal, tax, and other notices in person. This gives you the peace of mind of knowing you’re in compliance with the registered agent requirements. And, it helps avoid embarrassing situations where you could be served papers for a lawsuit in front of clients and employees.
As a bonus, our service also keeps you organized. When you get important documents, we will quickly inform you and keep them together in your online digital dashboard so that you can view, download, and/or print them whenever you want. It’s better than rummaging through piles of papers to try to find important legal documents when you need them.
Once you’ve decided on a business name and appointed a registered agent, the next step is making your Washington LLC official! To do so, you’ll need to complete a Certificate of Formation and file it with the Washington Secretary of State. This is the official document that formally establishes your LLC as a recognized legal entity in Washington.
To complete your certificate, you’ll need:
The Washington Secretary of State prefers online filing but does accept paper forms with an extra fee. Once accepted, your LLC will receive a Washington State Unified Business Identifier (UBI). Be sure to keep a record of that number, as you will use it when dealing with other state agencies. Within 120 days of forming an LLC in Washington, you are required to file an Initial Report, which is really the first annual report your LLC will file every year.
If this sounds overwhelming, don’t worry. Take a look at our business formation packages and let our team do the work for you. Once the Washington Secretary of State approves your LLC, your state paperwork will be available on your ZenBusiness dashboard, where you can keep it and other important business paperwork digitally organized.
In addition, we offer customized business kits to help you keep these important documents organized and looking professional. Whether it’s an operating agreement, member certificate, business contracts, compliance checklists, transfer ledgers, or anything else, you can be sure it’s all in one safe place.
An operating agreement is a legal document where you put in writing how the business will run, the breakdown of responsibilities, how profits will be shared, and more. All members (owners) of the LLC will approve and sign it, making it a binding contractual relationship between the members. Washington does not require a business to have an operating agreement, but most experts strongly encourage all LLCs to have one.
This is because you can tailor an operating agreement to your business’ needs. If a conflict arises, the default state LLC laws will control the outcome. You can help avoid unpleasant situations like this by using our operating agreement template, available in many of our formation plans.
What does a Washington operating agreement look like? What’s contained inside will depend on the specifics of your business, but there are a few things you will want to include:
Once it is completed and signed, it should be kept in a secure location with other important business formation information.
✓ If you’re unsure as to how to start creating an operating agreement for your LLC in Washington, then check out this guide. Make note that, if you decide to form your LLC with ZenBusiness, all our plans include a customizable operating agreement template to save you time researching and crafting the agreement yourself.
A federal Employer Identification Number (EIN) is a nine-digit code the Internal Revenue Service (IRS) uses to identify businesses for tax purposes. Most Washington LLCs need this Tax ID number, sometimes even those that are single-member LLCs with no employees. Getting an EIN should be a priority anyway, as it can help with practical things like opening a business bank account. You can use our EIN registration service to make it easy.
✓ Our LLC formation service includes obtaining an EIN for your LLC but we can also help you get an EIN for an existing company
Once you’ve secured your EIN, you’ll be able to open a business bank account. It’s important to keep separate accounts for your business and your personal banking, as failing to do so might land you in legal trouble and open your personal assets up to creditors or those looking to file a lawsuit against your business.
To help you avoid this, we offer a discounted bank account for new businesses. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.
If you don’t feel confident in your financial skills quite yet, try ZenBusiness Money. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
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The cost of starting an LLC in Washington State depends on your situation. Filing a Certificate of Formation requires a fee, and you must also provide your Initial Report within 120 days, which will cost an extra fee. The cost varies based on filing method, and you will pay more if you need expedited service. The total cost could range from $180 to around $300 based on these factors.
In addition to this cost, you may have state and local business licenses, permits, and insurance to pay for when starting your Washington LLC. This will depend largely on the type of business you run. For example, if you work in the foodservice industry, you need a state business license, health permit, and possibly a liquor permit — to name just a few. LLCs with employees will need workers’ compensation insurance, as well.
You’ll need to make sure your LLC has all the business licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal, state, and local levels, there’s no central place to check to see if you have all the licenses and permits you need. If you feel lost, our business license report service can do the work for you.
LLCs aren’t the only type of business you can form in Washington. However, about 90% of our customers choose to form an LLC over all other types. Compared to corporations and other forms of entities, LLCs come with enticing benefits. The reporting requirements for LLCs are less extensive than those of a corporation, for instance, and they allow for flexible management structures.
Forming your LLC in Washington state means you’ll reap the following added benefits:
Your Washington LLC will likely need to pay taxes on the federal, state, and local levels.
At the federal level:
At the state level:
At the local level:
State employment tax:
Workers’ compensation premiums:
Those who purchase any of our plans get a free accounting consultation and tax assessment from our specialists to receive helpful resources and no-obligation recommendations around your bookkeeping, accounting, and tax needs.
It depends. Your Certificate of Formation will be processed with the Washington Secretary of State in the order in which it is received. Online filing is the quickest way; your LLC paperwork is usually processed within two business days.
Washington has options for expediting your filing for an additional fee. If you’re in a hurry to form your LLC and don’t want to jump through the hoops of the state’s expedited filing processes, we can handle it for you with our faster filing speeds service.
No. The operating agreement is kept internally by the members. While some states legally require LLCs to have an operating agreement, Washington is not one.
As an LLC, you have different tax classification options to choose from. The majority of LLC owners opt for the default status. Under this set up, profits are passed through the LLC to the members. You pay taxes only on your individual income tax return. This is unlike most corporations, in which profits are taxed twice, first at the business level and again at the individual shareholder level.
Alternatively, you can have your LLC taxed as a corporation federally, but this is usually advisable only for much larger and more profitable businesses. A tax professional can advise whether this makes sense for you.
Note that the LLC will likely be subject to other state taxes, however. Washington requires LLCs to pay business and occupation taxes, for instance. These are calculated based on your business’s gross receipts. The tax rate varies depending on the type of business.
A Series LLC is a special business structure that allows multiple limited liability companies to operate under one “parent” organization. Washington does not allow Series LLCs (only a minority of states do).
All LLCs in the state of Washington need to file an Initial Report within 120 days of being formed. It should be submitted to the Washington Secretary of State. The Initial Report is the first version of the annual report required each year.
You’ll first need to review your Certificate of Formation and operating agreement, as these documents should outline how your business handles the addition of new LLC members. If your LLC is member-managed, you may need consent from specific members before adding a member. Similarly, if your LLC is manager-managed, you may need approval from the manager.
Once the addition of the member has been agreed upon, you will need to amend your operating agreement or draft a new agreement entirely to document the changes.
Yes, any business entity doing business in the state is required to file an annual report. This rule applies regardless of whether it is a domestic LLC or a foreign LLC authorized by the Washington Secretary of State to conduct business in Washington. The Washington LLC annual report can be filed online or mailed in. In both cases the filing gee is the same – $60. For more information and if you need help filing an annual report for your LLC go here.
Formally, you can. However, there is a number of pitfalls you need to be aware of. These pitfalls can be avoided with ZenBusiness’s professional registered agent service. If you want to learn more about the registered agent service and the pros and cons of being your own registered agent, please visit this page.
Before starting the dissolution process, the members of an LLC should vote to dissolve it. For the subsequent steps please refer to our Washington business dissolution guide.
An LLC registered in a different state, also referred to as a foreign LLC, should undergo registration with the Washington Secretary of State before it can conduct business in the state.
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