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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.
An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.
Starting an LLC in Washington State follows an uncomplicated process that is similar to those found in most other U.S. states. However, the state does impose some unique tax requirements on businesses.
To avoid a misstep in the filing process, follow these steps to start an LLC in Washington State, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Washington step-by-step
1. Select a name for your Washington LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the State of Washington:
- An LLC’s name must be distinguishable from the names of existing business entities on file with the Washington Secretary of State.
- An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”
Check name availability
After picking a name that follows naming rules, check that your LLC name is available in Washington by performing a search using the Washington Secretary of State Business Search.
Reserve your LLC name with the Secretary of State
Reserving your chosen LLC name with the Secretary of State prevents another business from using it before you can file your Certificate of Formation and legally form your LLC.
FIle a Name Reservation with the Washington Secretary of State by mail (no online filing option) to reserve a name for up to 180 days. The filing fee is $30 (with the option of paying $50 for expedited service).
2. Designate a registered agent
As in every U.S. state, forming an LLC in Washington requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.
The registered agent must either be a state resident or business entity with a street address in Washington OR if the individual or business is based out-of-state, they must have a business office in Washington.
3. File a Certificate of Formation
An LLC is formed in Washington State through the filing of a Certificate of Formation of a Limited Liability Company with the Washington Secretary of State.
You can file the certificate online or by postal mail. The filing fee is $200 for online filings or $180 for mail filings.
The Certificate of Formation must provide the following information:
- LLC’s name and principal office address
- The effective date of LLC formation (if later than filing)
- Duration of LLC (if not perpetual)
- Registered agent name, mailing address, and signature
- The signatures of the LLC executor
Foreign LLC registration
An LLC formed in a state other than Washington that plans to do business in the state must register with the Washington Secretary of State.
Complete these steps to do business in Washington as a foreign LLC:
- Comply with Washington LLC naming guidelines and confirm that the LLC’s name is available using the Secretary of State Business Search.
- Appoint a Washington registered agent.
- File a Foreign Limited Liability Company Registration with the Washington Secretary of State online or by mail. The filing fee is $200 for online filings or $180 for mail filings.
- Your LLC must include a Certificate of Good Standing or Certificate of Existence from its state of origin that is no more than 60 days old.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Washington, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.
The operating agreement should do the following:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- Detail how the LLC will be run
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).
The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Fulfill your Washington LLC’s additional legal obligations
Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
File Annual Reports
All LLCs active in Washington must file an annual report every year with the Washington Secretary of State. The initial report is due within 120 days of an LLC’s formation or authorization to do business in the state (foreign LLCs). The following reports are due each year at a date decided by the Secretary State.
Register with the Washington Department of Revenue
Many LLCs doing business in Washington, including those that collect sales tax and those that generate $12,000 or more in annual revenue, must register with the Washington Department of Revenue.
Additionally, county and/or city business licenses may be necessary, as well. You can learn which licenses are necessary and obtain most local business licenses online at the Department of Revenue website or apply through the mail.
Obtain business licenses
Most LLCs doing business in Washington State are required to obtain a business license. Find out the exact requirements for your LLC using the Washington Business Licensing Wizard.
Washington LLC checklist
A Washington LLC’s name must obey the following guidelines:
- Must be distinguishable from the names of existing business entities on file with the Washington Secretary of State.
- Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”
Formational documents and filing fees:
- Name Reservation (optional) – $30 filing fee
- Certificate of Formation of a Limited Liability Company – $200 for online filings and $180 for mail filings
- Foreign Limited Liability Company Registration (foreign LLCs only) – $200 for online filings and $180 for mail filings
- An LLC is created in Washington State through the filing of a Certificate of Formation of a Limited Liability Company with the Washington Secretary of State.
Additional legal obligations:
- File Annual Reports – Required for all LLCs doing business in Washington, both foreign and domestic
- Register with the Washington Department of Revenue – Required for a majority of businesses doing business in Washington
- Obtain business licenses – Required for nearly all LLCs doing business in Washington