Washington State Sole Proprietorship Registration
Washington State sole proprietorship registration is not required for a business to legally exist.3 min read
Washington State sole proprietorship registration is not required for a business to legally exist. It is a requirement for a sole proprietor to register before the business can legally operate in the state.
Washington law requires that most businesses register with the Washington Secretary of State. Additional laws deal with other aspects of a business, such as anti-competitive activities and the choice of business name.
About Sole Proprietorships
A sole proprietorship is a common formation for businesses in Washington. It is also the easiest and least expensive among the four entity types. As a sole proprietor, this type of business structure offers flexibility and minimal legal controls.
A sole proprietor is someone who decides to "go it alone" as an individual entrepreneur. This is one person who forms a for-profit business. When running a business alone versus forming a company, you are considered a sole proprietor in the eyes of the law.
A significant disadvantage to forming a sole proprietorship versus forming a company is that the owner is fully liable for all business debts. This means if a lawsuit is filed against the business, the owner (sole proprietor) stands to lose their personal assets. A sole proprietor must also pay self-employment tax due on any profits.
Naming a Sole Proprietorship in Washington State
In Washington, a sole proprietorship may carry the legal name of the person forming the business. The owner may use a trade name instead.
If you are operating as a sole proprietor and use your legal first and last name for the business, such as a contractor or consultant, you are not required to file. If you choose to operate under a fictitious name (assumed, doing business as) you must file with the State of Washington Business Licensing Service.
A trade name belongs to the individual who used it first as part of their business. This gives that person the right (ownership) to use the name.
A business name that's similar to or the same as another business operating in Washington can't be used. To ensure this doesn't happen, verify name availability at the department of licensing website. Also, check the Secretary of State website for corporations or limited liability companies that may be using a similar name for the business.
To protect your registered business name, it's recommended that you also register for a trademark. This is handled at the U.S. Patent & Trademark Office website.
Things to Know for Sole Proprietorship Registration
A business license isn't needed if all of these exceptions are met:
- No retail sales tax is collected.
- The businesses yearly gross is less than $12,000.
- The company isn't required to pay any other taxes, such as utility or use taxes.
- A regulated or renewable license with the Master License Service of Washington isn't required.
- There are no employees or plans to have employees in 90 days.
- The business is under your legal name, not a "doing business as" name.
Businesses operating as a general partnership or sole proprietorship will file the Washington Master Business Application. Businesses that need a specialty license must submit the master business application along with supporting documents to the Master License Service. Specialty licenses include areas such as liquor sales and vehicle dealers.
The Washington Master Business Application allows someone to apply for more than one state license as well as permits and some city licenses. The Business License Application is used to register a trade name. It also allows the creation of a state employment account, which is used for employees working for your business. It isn't necessary to set up an account for employees unless there will be workers within the next 90 days.
Information for Registering a Sole Proprietorship
File a master business application online at the Washington Business Licensing Service, by mail, or in person. Include the current filing fee and the application fee for a trade name, if applicable.
- Provide the purpose of the sole proprietorship.
- Indicate that you're registering a trade name.
- Check the applicable box indicating sole proprietorship.
- List the owner's name and address, the location of the business, and when it opened.
- List the type of ownership.
- Provide your Social Security Number.
- Provide your Federal Employer Identification Number, which the IRS issues.
If you need help with Washington State sole proprietorship registration, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.