Starting a Business in Washington: What You Need to Know
It involves choosing a name and filing Articles of Incorporation with the Secretary of State, whether you're establishing a corporation or an LLC.3 min read
Starting a business in Washington state involves choosing a name and filing Articles of Incorporation with the Secretary of State, whether you're establishing a corporation or an LLC. This requires payment of a filing fee. All corporations must use a corporate ending in their title. Some examples are incorporated, corporation, or some abbreviation of those. Don't be intimidated by the process though. The forms are simple enough to complete.
Special Considerations for a Limited Liability Corporation
If you are setting up an LLC, the name cannot duplicate any business already registered with the state, and it must include the words "limited liability company" or some variation of that. You'll need to include whether the LLC will have managers, members, or both.
Special Considerations for a Sole Proprietorship
- When you choose your business name, you'll need to check to be sure that it's available and not already in use by another company.
- You'll file your paperwork with the Washington Department of Licensing, starting with a Business License Application. This single document takes care of many of the steps to start your company. You can print it, complete it, and mail it in, or you can fill it out and submit it online. If neither of those options works for you, you can deliver the form in person. Whichever option you choose, the filing fee is $20. Of that amount, $15 is for processing, and the other $5 is to register the trade name for your business.
- As a sole proprietorship, the trade name gives you a way to do business without having to use your name. You may also want to look into registering your business name with federal and/or state authorities.
- The Business License Application sets up your state employment account. This is necessary if you plan to have even one employee. This step doesn't have to be done until you are within 90 days of hiring your first employee.
- Once this is completed, you get your state-issued business license and a number called a Unified Business Identifier or UBI. It's possible to receive this from the Secretary of State's office earlier in the process.
What Do I Need to Include in the Articles of Incorporation?
The Articles of Incorporation must include:
- The duration of the corporation.
- How many authorized shares are available in the company and what classes of stock.
- The name, address, and signature of the registered agent and office inside the state.
- The incorporators' names, addresses, and signatures.
- The date of incorporation.
The Articles do not have to include the purpose of the business.
Things to Do to Start Your Business
- If you plan to have employees, you need to get a federal tax ID number, also called an Employment Identification Number (EIN) or FEIN, from the Internal Revenue Service (IRS) once you have the approval from the state to proceed. You can complete the form for free online.
- Even if you don't plan to have employees right away, getting an EIN can make it easier to open a business bank account. It also reduces your odds of having your identity stolen.
- When you do hire your first employee, you must notify the IRS and the state of Washington. You'll also be required to have workers' compensation insurance.
- Once you have your EIN, you will want to open a bank account in the name of the new business to keep the finances separate from your personal accounts.
- Look into getting a Washington Master Business License to simplify setting up your business. This process registers the company with the Department of Revenue, the Department of Labor and Industries, and the Department of Employment Security.
- Investigate whether your industry requires a trade license. Most businesses are not required to get this document.
- Consult with the governing body of the city and county where you plan to operate to see if you need any particular permits or licenses. You may also need approval from a local zoning board to locate your office or store in a given location.
- Investigate the schedule for filing taxes for your type of company. You may have to file informational returns with the IRS once or twice per year.
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