Setting Up an LLC in Washington State: Everything You Need to Know
The first step is to name your business. Washington, like other states, has specific naming requirements. 3 min read
2. Important Documents
3. Reports, Licenses, and Taxes
Setting up an LLC in Washington state involves the following steps:
- Choose an appropriate business name.
- Choose a registered agent.
- Create an operating agreement.
- Submit a certificate of formation to the state, along with filing fees.
- Obtain an Employer Identification Number.
- File a business license application.
- File an initial annual report with the state.
- Register for state tax.
Setting up an LLC in Washington: First Steps
The first step is to name your business. Washington, like other states, has specific naming requirements. You must include a designator in your company name that identifies it as an LLC. This may be one of the following:
- Limited Liability Co.
- Limited Liability Company
You must also choose a unique business name that's distinguishable from existing companies in the state. You can do a name search at the Secretary of State database to check the availability of a name you wish to use. If desired, you can reserve a business name by filing a name reservation and paying a $30 fee. The reservation is good for 180 days.
Note that you won't be able to use “restricted designations” in your LLC name. These include the following:
- Banking or bank
- Corporation or Corp.
- LLP or Ltd.
You must elect a registered agent for your LLC. This is an individual or company that accepts and sends legal papers on your business's behalf. Your registered agent must be a resident with a physical address in the state or a company authorized to do business in Washington.
You can act as your company's registered agent or hire a registered agent service. Using a service comes with benefits such as always having an agent who's available during normal business hours.
Washington doesn't require that you have an operating agreement, but it's still a good idea to prepare one. This legal document outlines your LLC's ownership and operating procedures.
Also, complete a certificate of formation. You'll fill in the blanks on this form and add the following information:
- LLC name and address
- The registered agent's name, address, and signature
- Date of formation
- Terms of existence (i.e., limited or perpetual)
- Management type
- Organizers' names and addresses
You can submit your certificate online or by mail. It takes two to three business days to process online filings. The fee is $180 for mail-in filing and $230 for online filing.
Reports, Licenses, and Taxes
You also need to obtain an Employer Identification Number, or EIN, from the IRS. You can apply for your EIN online for free from the IRS website.
You'll need an EIN to:
- File business taxes
- Open business bank accounts
- Hire employees
If your LLC has two or more owners or members, you must have an EIN.
Next, file a business license application and pay the $20 fee. This officially registers your business in Washington state. When you file for a business license, you'll get a Unified Business Identification (UBI) number. The UBI is required to conduct business in the state.
Your UBI links your business to the following:
- Secretary of State
- Business Licensing Service
- Department of Revenue
- Department of Employment Security
- Department of Labor and Industries
Your business license also allows you to create a state employment account, which is required if your business hires employees. If you plan to hire someone within the next three months, you must have a state employment account.
File your initial annual report with the state within 120 days of filing your formation documents. The cost for the initial filing is $10.
Washington has no personal or corporation income tax, and most LLCs don't pay state income taxes. However, LLCs pay a business and occupation (B&O) tax.
If your business has employees, you must pay employer taxes. You'll also have to inform the state and the IRS when you hire workers. You must then register for unemployment insurance and workers' compensation. You can do this at the same time you file for your business license.
LLCs are generally an easy, inexpensive enterprise to form, and it's the preferred structure for many small business owners. You can refer to the Secretary of State office for tips and information on starting an LLC.
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