Want to learn how to form an LLC in Washington? We don’t blame you.
Washington is an attractive place to start a business for reasons such as low tax rates and the absence of sales tax. Regardless of your reasons for establishing a business in Washington, we’re here to help. Read our step-by-step guide to learn how to start your Washington LLC seamlessly!
Choose a Name for Your Business
Choosing a name for your business is the first thing you should do when forming an LLC in Washington. Be sure to choose a name your potential clients and customers will find easy to pronounce and remember. The name should also relate to the business activities of your Washington LLC.
That’s not all, though. Your business name should also comply with the LLC naming rules and guidelines in Washington, including the following:
- Your Washington LLC name must include the words “limited liability company” or the acronym “LLC” or “L.L.C” at the end.
- The chosen name should be distinguishable from other LLCs in Washington
- Restricted names, such as University, Attorney, Bank, etc., may need a licensed individual to be part of your Washington LLC. You may also require additional paperwork.
- Your chosen Washington LLC name should not include words or phrases that confuse your LLC with government agencies.
It’s vital to ensure that your preferred LLC name is available in Washington before going further. So, run an LLC name search on the Washington Corporations and Charities Filing System.
Finally, we recommend checking if your chosen Washington LLC name is available as a web domain. Even if you have no plans to start a website for your business, we recommend buying the URL immediately and trademarking it to prevent others from acquiring it.
Hire a Registered Agent
A registered agent refers to any person or business entity responsible for receiving and forwarding legal and official state documents on behalf of your LLC.
The state of Washington requires all business owners to nominate a registered agent before officially forming their LLCs. However, the state does not impose any restrictions on whom you can appoint as a registered agent. All that matters is your registered agent has a permanent street address in Washington and is available during regular business hours.
You can nominate one of your friends, a family member, another LLC member, or even yourself as a registered agent. But if you have a budget, we recommend hiring a third-party registered agent service provider.
You may wish to consider one of the following best registered agent companies in Washington:
Northwest is one of the most popular registered agent companies in Washington. At only $125, Northwest will give you access to a comprehensive registered agent package that includes annual report reminders, scanned documents, mail forwarding, compliance alerts, and pre-filled state forms.
In addition, Northwest is known for its remarkable customer support, also known as Corporate Guides. These experienced registered agent experts will help you with any issue related to compliance.
Northwest is also popular for its excellent Privacy by Default feature, as it protects your data from any third-party infiltrations.
Another good thing about Northwest is that you will get a discounted annual fee of only $100 if you hire their registered agent services in more than four states.
Our second recommendation is IncFile. This reputable registered agent service provider has helped over 800K businesses stay compliant over the years.
When you hire their registered agent services, you will get tailored SMS and email alerts, access to a personalized dashboard, and automatic mail forwarding. In addition, IncFile sends regular compliance reminders. So, you will never need to worry about getting in legal trouble with the state or risking a fine.
A year of IncFile registered agent service costs only $119. You can also hire IncFile for other LLC formation services, such as a tax consultation or drafting an operating agreement.
Our last recommendation for the best Washington LLC registered agent is ZenBusiness. Rated #1 on MarketWatch and Investopedia, ZenBusiness has helped over 300,000 businesses remain compliant over the years.
Their registered agent services include fast turnaround, access to a customized dashboard, email alerts, and document scanning.
An annual fee for ZenBusiness registered agent services is only $199. You can also upgrade it to include more perks, such as two free filing amends yearly.
File an Article of Organization
Once you have a registered agent in place, the next step should be registering your business with the Washington Secretary of State.
The simplest and fastest way to register your Washington business is by filing an Article of Organization online with the Washington SOS Online System. You’ll just need to fill in the online form and pay the fee of $180.
You can also file your Washington LLC’s Article of Organization by mail. If you opt for the mail filing, you must download and fill out the Washington LLC Article of Organization Form. Then send a copy together with a money order or check (not cash) for the $200 filing fee (for mail filing) to the following address:
Corporations & Charities Division
PO Box 40234
Olympia, WA 98504-0234
Write an Operating Agreement
An operating agreement is a legal contract that all LLCs in Washington must create.
Drafting an operating agreement outlines all the LLC members’ responsibilities, roles, and responsibilities. It also defines the ownership percentage of each member, the LLC’s management structure, and other relevant aspects of your business entity.
In addition, a well-created operating agreement can offer extra protection for the members of your LLC.
You can include the following clauses in your operating agreement:
- The management structure (manager-managed or member-managed)
- Conditions and rules for ownership stake transfer
- Core duties, roles, and responsibilities of each LLC member
- Voting rights for each LLC member
- Every member’s ownership percentage
You can easily create your operating agreement by downloading an operating agreement template online and filling in the necessary details. Alternatively, you can hire an LLC formation package that includes an operating agreement as a feature.
Get Business Licenses and Permits
The state of Washington has several business licensing and permit requirements for LLCs. In addition to the state-wide license, your Washington Limited Liability Company may require additional local and county business licenses and permits.
You should check the license fees and requirements based on your location and business. You can search online via the state of Washington’s Department of Revenue LLC Licensing Wizard. You will also get valuable information about navigating unique requirements in Washington.
Some common scenarios that need additional business licenses and permits include the following:
- Your LLC sells tangible services and products
- Your LLC sells or distributes liquor
- Your LLC offers dental services
- Your LLC operates in the food industry
- Your LLC operates in the tobacco industry
Obtain a Federal Tax ID
Every LLC in Washington with one or more employees will need an Employer Identification Number (EIN), which isused by the Internal Revenue Service to identify, analyze, and examine your business entity for tax purposes.
You will also need an EIN for other reasons, such as:
- Opening a business bank account
- Hiring employees
- Applying for business grants and loans
Applying for an EIN is straightforward and free of charge. Simply go to the IRS website, provide the necessary details, and you will have your EIN in no time!
Open a Business Bank Account
After registering your Washington LLC, one of the most important things you should do is open a business bank account.
For instance, you will need a business checking account to separate your personal finances from business ones. It is also vital to open a business credit card and savings account to assist in managing cash flow, especially when paying for equipment and inventory.
In order to open a business bank and credit account in Washington, you will need your EIN, your LLC’s Article of Organization, and an operating agreement. Some banks may also require you to have a small deposit amount.
If you are looking for the best banks that have incentives for small businesses, then consider one of the following:
Buy Washington Business Insurance
Washington does not require LLCs to purchase general liability insurance policies. However, you can still buy it as it will protect your LLC against lawsuits caused by property damage or personal injuries. Plus, most clients and landlords will require general liability insurance.
You will also require workers’ compensation insurance for both your employees and even some independent contractors. Unlike other states that allow you to buy workers’ compensation insurance, Washington mandates LLC owners to buy it through the State Department of Industries and Labor.
You will also require property insurance. It pays for repairing and rebuilding your inventory or equipment should there be vandalism, fire, theft, flood, or natural disaster.
Get a competitive quote for your Washington insurance needs by consulting a comparison site like Insureon.
Consider an LLC Formation Package to Speed Things Up
Most companies offer LLC formation packages. So, if you find the formation steps time-consuming, daunting, and complex, you can purchase one of the following top recommendations.
Regardless of your budget, you will always find a perfect LLC formation package for your LLC. Some service providers, such as ZenBusiness, offer to form your LLC in Washington for free. You will only need to cover the Washington state filing fee. For instance, their Starter LLC formation package is free, and your LLC will be up and running in 2-3 weeks.
ZenBusiness’ most popular LLC formation package is its Pro package. At only $199, you will get worry-free compliance, an operating agreement, and expedited processing. Your LLC will be ready in 4-6 working days. You can also consider their Premium package, which costs only $299, and your LLC will be set up in 1-2 working days.
Another top company that offers incredible LLC formation packages is LegalZoom. It has three packages, which include the Basic package (free plus state filing fee), the Pro package ($249 plus state filing fee), and the Premium package ($299 plus state filing fee).
FAQs About Forming an LLC in Washington
How Long Will It Take to Form My Washington LLC?
You can have your Washington LLC formed in two to three weeks if you file the Article of Organization online or seven to eight weeks by mail. However, you can pay for expedited processing if you want it formed faster.
How Much Does It Cost to Set Up an LLC in Washington?
The cost of forming an LLC in Washington varies depending on how you file your Article of Organization. For instance, the cost of registering your LLC online is $200, and $180 for mail filing of your Article of Organization. You may also need to cover other costs, such as $30, for your business name reservation.
Can I Act as my Own Registered Agent in Washington?
Yes. You can appoint yourself a registered agent for your Washington LLC. However, you must have a permanent address in Washington (a P.O. box is not allowed), be at least 18 years old, and be available to work during regular business hours in Washington.
Can I Form a Single-Member LLC in Washington?
You can form a single-member LLC in Washington. The formation process is straightforward. You only need to comply with the state guidelines for starting a single-member LLC and follow the steps outlined in this article.
We hope you enjoyed our step-by-step on forming an LLC in Washington and that you now have the insight and knowledge required to start and run your LLC in this state legally.
However, if you find any step time-consuming and challenging, you can purchase an LLC formation package to streamline and speed up the process.