Washington LLC Operating Agreement: Everything to Know
Creating a Washington LLC operating agreement is a smart idea for a company to do, especially when there are multiple members.3 min read
Creating a Washington LLC operating agreement is a smart idea for a company to do, especially when there are multiple members. This will decrease the risk of conflicts in the future. It's easy to form LLCs in Washington State as well as affordable. However, there are some rules that must be followed, similar to other states. Anyone wishing to form a limited liability company needs to register with the Secretary of State by filling out the appropriate forms, paying the required fees, and meeting any formation and name requirements.
Registering for an LLC
A Certificate of Formation must be filed through the Secretary of State. This must include the following information:
- LLC's name and address
- Resident agent's name and address
- If applicable, date of dissolution
- If it's a member-managed LLC or a manager-managed LLC
- Address of the main place of business for the LLC
- The name and address of all organizers
Make sure to include the filing fee with it, which will vary depending on if it is filed online or by mail. This process can be sped up for an extra fee. Any fees and forms should be filed with the Secretary of State. Money orders and checks are the only forms of payment acceptable for paper filings. Credit cards can be used when the fee is paid online. It normally takes two or three business days for the forms to be processed.
There are certain naming requirements in Washington when it comes to LLCs. The name must stand out from other limited liability companies. It also must get approved by state agencies and have certain words in it, such as "Limited Liability Company," "LLC," "L.L.C." or "Ltd. Liability Co." A name can be reserved for up to 180 days from the time the request is filed.
It's required for limited liability companies in the state of Washington to have a UBI, or unified business identifier. This is also known as a tax registration number, which is a nine digit number that allows companies to run their business in Washington. When applying for this, a small fee is required.
Starting an LLC in Washington
Before an LLC is started, it should be agreed upon that this is the right business structure for the company. Once the name is picked, a resident agent will need to be chosen by the LLC. This person will be in charge of any legal demands brought against the company. This can be someone within the company, a legal resident in Washington, or a business in Washington. A processing fee must be paid when the application for the LLC is sent in. It costs $180 if sent in through the mail and $200 if submitted online.
After this, an EIN, or Employer Identification Number, will need to be obtained if the LLC wants to hire employees or have large financial transactions with the company. Getting an EIN is completely free and can be done online on the IRS's website.
Washington LLC Operating Agreement
If a limited liability company has multiple members, an operating agreement should be created. It is not required, but it makes clear who runs the business and what the rules and regulations are. This is used by owners and members of the company to create their own procedures and policies. It also states what the logistical and financial affairs of the company are. The operating agreement will also talk about how to deal with money, disagreements, and anything technical such as the right of first refusal.
This document will also state what happens if the company dissolves. Since it's not required, its main purpose is to be used internally and referred to in case there is any confusion in the future. If there are ever any problems regarding litigation or creditors, every member would be responsible if they don't have a document in place stating otherwise. Operating agreements often cover what each member's percentage of interest is, how to allocate any profits or losses, provisions related to management, rules for taking votes and holding meetings, and the limitation on indemnification and liability.
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