Key Takeaways

  • Forming a Washington LLC requires filing a Certificate of Formation with the Secretary of State and appointing a registered agent.
  • The filing fee is $180 by mail or $230 online, and processing times range from 3 days online to 3 weeks by mail.
  • Washington LLCs must file an Initial Report within 120 days of formation.
  • Businesses may need to register for state taxes, including Business & Occupation (B&O) tax, sales tax, and unemployment insurance if they have employees.
  • Maintaining an LLC includes annual report filings, business licensing, and compliance with industry-specific regulations.
  • Washington offers no personal or corporate income tax, but LLCs still owe state-level B&O tax on gross receipts.

Applying for a Washington State LLC license is straightforward when the correct steps are followed. The business must first be named before anything else can happen. Research must be done to make sure no other companies have the desired name. It should also be a name that potential clients can easily search. The name must include the words "Limited Liability Corporation," "L.L.C.," or "LLC." If restricted words such as "university," "bank," or "attorney" are used, extra paperwork will be required. A licensed individual may also need to be part of the LLC, such as a lawyer or doctor.

Steps to Start an LLC in Washington State

Some names are not allowed at all, as they would confuse the general public with a state or federal agency. This includes the Secret Service, FBI, and Treasury. A search can be done on the State of Washington's website to see if the name is available. The company should also check that the limited liability company's name is available so the domain name can be reserved. This should be done even if the owner doesn't intend to start a website anytime soon. It's better to have it so no one else gets it in the future.

A registered agent will need to be chosen to be in charge of receiving and sending legal papers on the LLC's behalf. This includes state filings and service of process of legal action in case the LLC is sued. They must either be a Washington State resident or a corporation that has been authorized to do business in the state. Someone in the LLC can also elect themselves as the registered agent, but the company itself can't be the registered agent.

There is a non-refundable fee of $180 to file the Certificate of Formation through the mail. If this is filed online, it will be more expensive, with a $230 expedited fee. Either a Certificate of Formation or Articles of Incorporation will need to be filed. The following details should be included on this:

  • Address and PO box for main office
  • Company name
  • Duration of LLC
  • Type of management
  • Name, mailing address, and physical address of registered agent
  • Registered agent's signature
  • Name, phone numbers, addresses, and signatures of all signers

After this is filed, it will take three days for it to be processed if it was filed online. If sent in the mail, it can take up to three weeks to get confirmation. An email will be sent by the Secretary of State to confirm that the business was formed and what the UBI number for the business is.

Washington LLC Initial Report Requirements

After filing the Certificate of Formation, a Washington LLC must file an Initial Report with the Secretary of State within 120 days. This report confirms key business details such as the registered agent, management structure, and principal office address. If filed online, the Initial Report is free when submitted at the same time as the Certificate of Formation, but filing it later costs $30. Missing this deadline may result in late fees or administrative dissolution of the LLC.

Washington LLC Costs and Fees

Forming a Washington LLC involves several fees:

  • Certificate of Formation: $180 by mail or $230 online (expedited).
  • Initial Report (if filed later): $30.
  • Annual Report: $60, due each year by the end of the month in which the LLC was formed.
  • Business License Application: Most businesses must also file with the Washington Department of Revenue and pay a $19 processing fee.

Unlike some states, Washington does not charge a franchise tax, but LLCs must comply with the Business & Occupation (B&O) tax, which is based on gross revenue rather than profits.

Key Steps After Forming a Business

An essential first step when starting an LLC is to open a bank account that will be used exclusively for the business. The owner's personal assets should never be combined with this so they will have personal asset protection. This will make filing taxes and accounting easier. The company should also get a business credit card so it can build credit and make it easy to separate the personal and business expenses.

The LLC will need to be registered for Washington State Tax. Most businesses in the state must pay the Business & Occupation Tax with the Washington State Department of Revenue. If there are employees in the company, they'll need to be registered for Unemployment Insurance Tax. Companies selling services or taxable goods in the state of Washington must register for Washington Sales Tax as well.

Even if the business hasn't officially opened to the public yet, they'll need to get their accounting in order. Having an accounting system that's well-managed from the beginning will make it easier to file the yearly taxes and track business income, expenses, and bills. There are many software programs that can make tracking simpler and will automatically sync activity from the bank. They will also match all transactions to any bills, orders, or invoices so accounting is simple.

The LLC must also get the proper permits and licenses to comply with state, local, and federal government rules. For example, any restaurants will need building permits, health permits, and signage permits.

Washington State Tax Obligations for LLCs

Although Washington has no personal or corporate income tax, LLCs are still subject to the state’s B&O tax, which applies to nearly all business activities. The rate varies depending on the type of business but is based on gross receipts rather than net profit.

Other potential tax requirements include:

  • Sales Tax: Required for businesses selling goods or taxable services.
  • Use Tax: Applies to items purchased out of state but used in Washington.
  • Employer Taxes: If hiring employees, an LLC must register for Unemployment Insurance and pay contributions through the Employment Security Department.

It’s also recommended to obtain an Employer Identification Number (EIN) from the IRS for tax reporting and opening a business bank account.

Ongoing Compliance for Washington LLCs

Washington LLCs must stay compliant by meeting annual requirements:

  • Annual Report: Due every year by the end of the anniversary month of formation; filed with the Secretary of State for $60.
  • Business Licenses and Permits: Industry-specific licenses (restaurants, contractors, healthcare providers, etc.) may be required at the state or local level.
  • Registered Agent Maintenance: The LLC must maintain a registered agent with a Washington physical address at all times.
  • Recordkeeping: Washington law requires that LLCs maintain accurate records of members, contributions, and company activities.

Failure to file an annual report or keep a registered agent may result in administrative dissolution.

Frequently Asked Questions

  1. How much does it cost to start a Washington LLC?
    It costs $180 by mail or $230 online to file a Certificate of Formation, plus $30 if the Initial Report is filed separately.
  2. Do Washington LLCs pay income tax?
    No. Washington has no state income tax, but LLCs must pay the Business & Occupation (B&O) tax on gross revenue.
  3. When is the Initial Report due for a Washington LLC?
    It must be filed within 120 days of formation. Filing online at the same time as the Certificate of Formation is free.
  4. What is required for the Washington LLC annual report?
    The annual report updates ownership and business information. It costs $60 and is due each year by the end of the anniversary month of formation.
  5. Do Washington LLCs need a business license?
    Yes, most LLCs must apply for a Washington business license through the Department of Revenue and may need additional local or industry-specific permits.

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