How to Start Your LLC in Washington

This is the guide that will take you through all the procedures of forming your LLC in Washington, including the choice of a name and registration with the Secretary of State, licenses, and compliance. These steps will help you to guarantee that your LLC is registered and can run legally without any doubts.

1. Name Your Washington LLC

One of the most significant initial steps in the creation of your LLC is the choice of the business name since it is your name and your brand. It should be a unique name that is easily memorable and one that demonstrates your purpose of business.

The first step is to define your business idea and you can brainstorm it with your friends, mentors or colleagues who can know your intentions. Business name generators may be good ideas to start off with, though not to substitute the creativity of humans or your knowledge of your market.

Moreover, the name should not consist of such words as bank, insurance or university without the permission of the state.

Your LLC name must not either imply that it is a corporation or a partnership and must be distinctive in relation with other registered business names in Washington.

Once you have confirmed the availability, it is advisable to make an inquiry with the US Patent and Trademark Office (USPTO) as a sign of whether your chosen name is already registered in the country as a trademark.

Doing Business As (DBA) or Trade Name

In the event that you are going to carry out under a name different than your LLC, you will be required to register a trade name. This will be handy in case of product line expansion or the need to have a different brand name within the same LLC. An example of this is that you can use JJ as a trade name, but the firm is called JJ Waffles. On the one hand, trade names can be registered in Washington in the Department of Revenue with the help of a Business License Application, thanks to which it is possible to open bank accounts and receive payments in this name.

2. Select a Registered Agent

Washington law demands that any LLC should choose a registered agent, either a person or an organization, who may accept legal, tax, and official mail. The registered agent makes sure that your LLC does not fall out of pocket with the state requirements and that you are aware of key documents.

The requirements to be a registered agent in Washington are that a person should be at least 18 years of age, should reside in the state and must be present in a physical location during the usual working time. Although you are free to operate as your own registered agent, most LLC owners place their privacy, flexibility and reliability in the hands of a professional service. Registered agent service will help you concentrate on the development of your business instead of taking care of legal correspondence.

3. Decide Your Management Organization

Washington LLLCs may be member-managed or manager-managed. The responsibility of operating a company on daily basis is shared by all members in a member-managed LLC, a typical characteristic of small businesses where members are highly involved. In manager-managed LLCs, the non-members can be in charge of the management and this is best suited to bigger LLCs with non-managerial investors.

Unless you state otherwise, your LLC will be member-managed. Early selection of the structure will prevent unrest in the future and there will be no confusion of command, power to vote and control over operations.

4. Filing of Certificate of Formation

The Legal document that formally makes your LLC a reality in Washington is referred to as Certificate of Formation. You are allowed to file online or by mail using the Secretary of State. The filing will need simple details such as the LLC name, the main office address, registered agent, duration of the period and names of members or managers. You will also provide a short explanation of the purpose of your business.

The submission fee is 180 dollars in case of online filing and 200 dollars in case of mailed submissions. When submitted over the internet, your LLC is usually processed within 2- 3 days whereas one that is filed by mail can take a maximum of 2 weeks.

Secretary of State Contact

Washington Secretary of State
PO Box 40220
Olympia, WA 98504-0220
Phone: (360) 902-4151

5. Write out Operating Agreement

Even though much-needed operating agreement is not legally required in Washington, it is strongly suggested. This is an internal document that specifies the ownership, member duties, distribution of profits and losses, voting rights, management processes, dispute resolution and adding or removing members.

A detailed operating agreement will assist in safeguarding your liability, avoiding confusion and confusion, and defining good governance. The templates can be found online, yet by discussing them with an attorney, you can make sure that they fit your particular business requirements and state requirements.

6. Get an Employer Identification Number (EIN)

The IRS issues you with your EIN and serves as a federal tax identification number. Multi-member LLCs, LLCs that employ workers and a business bank account opening require it. The applications may be done online, by mail and via fax. This has to be done by the responsible party that is a person who has control of the LLC and not by a business entity.

7. acquire Business Licenses and Permits

Depending on your industry and location, you can require federal, state and local license or permit. The majority of businesses in Washington are required to acquire a state business license by the Department of Revenue. The additional permits may be needed in specific industries like construction, childcare, food service or professional services. Sales tax license is also mandatory in case you sell taxable goods or services.

Local licenses can be zoning permits, fire permits, health inspections or signage permits. The risk of working without the appropriate licensing will result in fines or the closure of the business, hence it is necessary to confirm the requirements with all the relevant authorities. This can be made easier through the use of online tools such as business licensing wizard.

8. Determine Your Tax Status

Default is that an LLC is considered a pass-through taxable entity. This implies that the LLC would not be taxed to pay federal income tax. Profits and losses are instead reported in personal tax returns of the members. Single member LLCs are taxed as sole proprietorships and multi member LLCs are taxed as partnership.

Corporate taxation is also electable in LLCs. By filling the IRS Form 8832, C-Corp taxation is possible in which the LLC would be subject to income taxes as a company, but the self-employment taxes on dividends would be lower. Form 2553 allows taxation as an S-Corp and has the advantage of passing on any gains and losses through to shareholders, with the potential of lessening self employment tax on distributions so long as members are paid a reasonable salary.

Washington has a Business and Occupation (B&O) tax, gross receipts tax and can pay a sales or use tax. There is no income tax in the state.

Other Key Steps

Open a Business Bank Account

Separating personal and business finances is very important to protect liabilities and accurately record accounting. In opening your account, bring your EIN and Certificate of Formation.

Apply To Business Credit Card

Helps assist in the creation of business credit and control operating costs effectively.

Obtain Business Insurance

The coverage types can be;

• General liability
• Professional liability
• Workers' compensation
• Property
• Equipment breakdown
• Commercial auto
• Business owner's policy (BOP)

Maintain LLC Records

Keep your Certificate of Formation, operating agreement, contracts and financial records in a safe place.

Annual Reporting

Washington has a requirement that LLCs submit an annual report before the end of the month of formation of LLC. The filing fee is $60.

Washington LLC FAQs