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How to get a business license in Washington

Date: 01/03/2023 | Category: | Author: developers

How to get a business license in Washington?

Washington has a thriving economy and a pro-business climate. It is home to a variety of industries from manufacturing to finance, retail trade, tourism, IT, transportation, and logistics. You can start a new business in any of these industries by obtaining a Washington business license. This guide will provide you with information concerning the different types of Washington business licenses and permits, issuing authority, and the process to obtain them.

Business Licenses in Washington

Every business operating in the USA requires some form of a license or permit to operate. The licensing requirements vary from one state to another. A Washington business license is a document issued by different government or state agencies. It is issued to individuals and businesses so that they can transact within the geographical jurisdiction of the state. Washington has specific licensing regulations, laws, fees, and renewal requirements when it comes to permits or licenses. A business or individual organizing a business may require one or more Washington business licenses and permits.

What business license do I need in Washington?

Most states in the USA normally require a general business license or a state business license. Washington also requires most businesses to obtain a state business license. If you are planning to start a new business in this state then you need to apply for state licenses and permits. The Washington State Department of Revenue is responsible for issuing this license. The best way to proceed is by completing the Business Licensing Wizard. The wizard can be used to conduct a Washington business license search.

To start, you will need to provide information in regards to the business’s primary activity to receive a comprehensive list of various licensing agencies for you to contact, along with information on additional endorsements. Be mindful of the Unified Business Identifier (UBI) number that you will be assigned after you obtain a Washington business license. Apart from state licenses, you may also need to apply for other local licenses and industry-regulated or professional licenses and permits.

State (General) Business Licenses

The most common Washington business license is the state or general business license. You will need to register your business with the Department of Revenue (DOR) to obtain this license. Not all businesses may require this license as there are certain criteria to qualify for the need. If your business meets the following conditions then you will need to apply for and obtain a Washington business license. The qualifications are:

  • If your business requires state and city endorsements
  • Sole proprietorships or other businesses using any name other than the full name of the owner
  • Planning to hire employees within 90 days of starting a business
  • Selling a product or providing a service, which requires the collection of state sales tax.
  • The annual gross income is $12,000 or more.
  • The business is required to file any fee or taxes with the Department of Revenue.
  • The business activity involves buying or processing specialty wood products.
  • The business meets the requirements of reporting thresholds and nexus

You will need to fill out the Business License Application (Form 700 028) and submit it to the Business Licensing Service, Department of Revenue (DOR). The processing fee for the license is $90. There may be additional fees for endorsements and mark registrations. It is important to note that if your business requires any state or city endorsement then it will be necessary to renew your annual Washington business license.

Specific Licensing for Regulated Professions and Industries

The requirement for licenses depends on the type of business or business activity. There is a category of Washington business licenses and permits for regulated professions and industries. The Department of Commerce has created a regulatory roadmap so that businesses can fulfill their local, regional, and state licensing requirements. This roadmap is applicable for specific industries or business activities like restaurants and manufacturing including the sale of alcohol, as well as any gambling event occurring within the premises of a business.

Some professions or occupations may require you to conduct a Washington business license search. The Washington state department of licensing provides a detailed list of professional licenses, along with information referring to the application and renewal of licenses and permits.

For example: If you want to start a business in Washington for landscaping architecture, then there is a process to obtain a Washington business license for that particular industry. You will need to apply by filing the Landscape Architect License Application along with a fee of $450. It has to be renewed once every 2 years. The business license will be issued if you have the Landscape Architectural Accreditation Board (LAAB) accredited degree.

City Business License

Once you start or register your business in Washington, you may also require separate licenses in the city where your business is located. To do this, you will need to conduct a Washington business license search to identify the various permits you require. You may even require multiple licenses or permits depending on the business activity. The licensing requirements and fees vary from one city to another. We have listed 5 top cities for businesses.

Seattle

If your business is located in Seattle, then you will need to apply for a Seattle business license tax certificate (BLTC). This certificate is considered a Washington business license. The distribution of this license is handled by the License and Tax Administration, City Finance Division. You can apply for a new license or renewal using the online portal called FileLocal. It is important to obtain the UBI number first. There are specific business activities that require this license like Manufacturing-Extracting, Tour Operator, and Retail among others. The fee for this Washington business license and permit is $59. In the city of Seattle, a regulatory endorsement is also added to the business license tax certificate. You may need to apply for additional licenses if your business is categorized under Regulatory License.

Spokane

If you are planning to establish your business in Spokane, then you may be required to obtain a Washington business license and permit in addition to the state or general business license. The permits or business licenses will vary according to the type of business and activity. If you want to start a restaurant then it will be considered an Entertainment Facility in the city of Spokane. You can conduct a Washington business license search to identify the right application as there are separate applications for permanent and temporary facilities. You will have to file the Entertainment Facility license application with the Department of Taxes & Licenses, City of Spokane along with a fee of $100.

Tacoma

The business licensing rules in Tacoma are a little different from Seattle because the application process is structure-based. There are two types of Washington business license structures, a general business, and a rental business. If your company falls under the general structure, you will need to apply for a City of Tacoma Business License. If the activity is related to leasing or renting real estate property, then you will have to complete and file the registration and rental business license application. The fee to obtain a Washington business license in Tacoma is based on the gross income and revenue e.g., if the gross income threshold is under $12,000 then the fee would be $25; if it is more than $250,000 then the fee would be $250. It is also important to note that there are Regulatory Business Licenses applicable in Tacoma.

Vancouver

The city of Vancouver has specific licensing regulations and requires all companies conducting their business activities within the city limits to have the necessary permits or licenses. The Washington business license fee is determined through a calculation of the gross annual income as well as the number of employees (full-time equivalent/FTE) working within the city limits. If the reported gross annual income is $12,000 or more then the license fee would be $200 + $90 per FTE. Some businesses may also require a Vancouver special license in addition to obtaining a Washington business license and permit, as well as city business license.

Bellevue

If you are planning to conduct your business in Bellevue then you need to obtain a Washington business license in Bellevue. This is true for the following conditions:

  • If a business office, warehouse, or retail outlet is located in the city per Bellevue City Municipal Code 4.09.030 (W)
  • If an individual or business is engaged in business activities within the city limits and its gross income or sales is equal to or more than $2,000, then a city license is necessary.
  • Your business may also require regulatory licenses for specific activities like adult entertainment or pawnbroker activities. Some of these regulatory activities also require additional addendums

Building & Zoning Permits

One of the focal points of conducting a Washington business license search is checking for proper building and zoning permits in the state. These permits are mostly applicable in local jurisdictions like cities and counties. If your business activity is connected to any kind of construction projects, then you will need to obtain a building permit in the respective county or city.

Example: If you are constructing a building in Clark County or are working on the structural components of a building like plumbing; then you need to apply for building permits from the Clark County Permit Center.

Each city or county has individual zoning codes that each business needs to be compliant with. Zoning involves dividing land in a specific jurisdiction into regulated zones. Some cities or counties require businesses to be established only in business districts, which is considered a commercial zone.

Need any Assistance in Obtaining Your Washington Business License?

If you are planning to start a new business in Washington, then it is important to obtain a proper Washington business license. Licenses or permits can vary depending on the type of business activity and location of the business. If you conduct your business without proper licenses and permits then you may risk facing penalties and even punitive action.

The process and requirements of obtaining and maintaining Washington business licenses and permits may look complex. Therefore, we have created a “Business License Research Report” service which constitutes detailed information concerning licensing in Washington like filing instructions and supporting document requirements. We also provide several additional services to new and existing businesses in the state.

Do you need help with a Washington Business License?

How to start a sole proprietorship in Washington

Date: | Category: | Author: developers

How to start a sole proprietorship in Washington?

One of the most common and simplest business structures to form, in the world, is a sole proprietorship. Most home business owners prefer to start a sole proprietorship in Washington as compared to other entity structures. The operational and business aspect of this business structure is different from an LLC or a corporation. This guide has been created to provide you with an insight into how to start a sole proprietorship in Washington and understand its many characteristics like business plans, business names, licenses and permits, and bank accounts among others.

Sole Proprietorship in Washington

Washington is home to over 600,000 small businesses spread over a diverse umbrella of industries from Aerospace, to clean technology, manufacturing, information and communication technology, e-commerce, and global health among others. The state provides a strong infrastructure, commercial spaces, startup hubs, and loans and grants that will help you to start a sole proprietorship in Washington with ease. The state also offers small business assistance through many state-governed programs including business incentive programs.

What is a sole proprietorship in Washington?

Filing a sole proprietorship in Washington refers to operating an individual entrepreneurship or sole tradership. It is a company or enterprise that is owned as well as operated by a single individual. This individual is also responsible for all business assets, as well as profits and liabilities. A sole proprietorship also has a different tax structure as compared to other businesses like a corporation. If you want to know how to start a sole proprietorship in Washington then it’s important to identify the various characteristics of this particular entity.

Important features of sole proprietorship in Washington

First time business owners normally prefer to start a sole proprietorship in Washington due to its salient benefits and several features. Some of the key features are:

  • It works well for small entities including home-based businesses as well as medium-sized enterprises.
  • There is no requirement for registering a sole proprietorship in Washington with the office of the Secretary of State. Therefore, it is not required to file any type of new business formation documents.
  • A sole proprietorship business is also known as a sole-owner business, meaning the business and the owner are considered as one.
  • Filing a sole proprietorship in Washington means that any, and all financial, management, and operational decisions will be made by the owner. One of the benefits is that no one else can interfere with these decisions.
  • The tax structure of a sole proprietorship is different from other structures. It has to be filed through the owner’s income tax return.
  • Registering sole proprietorship in Washington also equates to unlimited liability. This simply means that the owner will be liable for any losses or debts.
  • The process of dissolution for a sole proprietorship is also simple.

Are you ready to start a sole proprietorship in Washington?

Steps to Start Sole Proprietorship in Washington

If you intend to start a sole proprietorship in Washington then you must start by identifying the various business requirements. You will need to focus on the financial and management aspect of the business. You will also need to consider several of the state-based requirements like tax IDs and business licenses. If you are wondering how to start a sole proprietorship in Washington, these steps will help you get started and continue to run the business smoothly.

1. Prepare a business plan

When thinking of filing a sole proprietorship in Washington, one of the first details to focus on is creating a proper business plan. This plan focuses on several major elements that will aid in the overall growth of the business. It will provide you with a clear visual path regarding finance, budgeting, marketing, prospective markets, customer base, and state requirements among other details. Different types of businesses have different requirements and plan components. Some of the most common facets of a general business plan are:

  • Executive Summary
  • Company Description and Objectives
  • Industry and Market
  • Direct and indirect competitors
  • Chain of command or Management
  • Details of Products or services
  • Marketing Plan
  • Sales Plan
  • Funding Plan
  • Financial Projection

2. Choose a Washington business name

When you start a sole proprietorship in Washington, you must choose a business name. Creating a company name is important because it helps to create a professional identity and communicate the nature of the business and its objectives to customers, partners, and vendors among others.

A sole proprietorship is a type of business where the business name is usually the personal name or the name of the owner. You can conduct a sole proprietorship Washington search to check the names available for use, or to identify if your chosen name is unique or not. Some focal points to consider while choosing a company name are:

  • Keep the business name as simple as possible
  • The company name should represent your product or service like “Steven Johnson Sportswear”
  • Conduct a copyright or trademark search for the chosen name
  • If you plan to create a website, check for domain name availability

3. File for a Trade name

If you are thinking of filing a sole proprietorship in Washington, you will have two options available when it comes to choosing a company name. They are:

  • The full legal name of the owner can be used as a company name
  • Alternatively, you can register a trade name

A trade name is often referred to as a “doing business as” (DBA) name, a fictitious name, or an assumed name. It is a company name that is any name other than the full legal name of the owner. You have to register a trade name pursuant to RCW 19.80.10.

For example: IF your name is Susan Wright and you want to start a sole proprietorship in Washington as a Yoga Studio. You can use your own name like ‘Susan Wright Yoga.’ Alternatively, if you use a name like “Susan’s Master Yoga” then it will be considered a DBA or trade name. In this situation, you will need to conduct a sole proprietorship Washington search to determine availability and then register the trade name.

You can file for a trade name online with the Online Business Licensing Service. We, at IncParadise can also help you with the process of filing your trade name in Washington.

4. Get an EIN

An EIN or Employer Identification Number is required for most businesses, mostly for tax purposes or opening a business bank account. When you start a sole proprietorship in Washington, you will be required to file your income and expenses through an individual tax return using your Social Security number (SSN). You can also apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). As a sole proprietor, you will need an EIN if you meet the following conditions:

  • If you hire employees
  • When you open a business bank account
  • A Keogh plan for an unincorporated business or are self-employed
  • For filing excise tax returns
  • Filing Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy
  • If you change or convert the entity structure from a sole proprietorship to an LLC or partnership

5. Obtain the necessary licenses and permits

If you are interested in filing a sole proprietorship in Washington, then you must fulfill certain state requirements. Filing for a business license and permit is one of the most vital requirements. Obtaining the right license your business will allow your business to become and remain operational. Business licensing in the state can be categorized as:

  • A state business license
  • Professional or regulated licensing
  • City or County licenses and permits
  • Zoning permits

To start a sole proprietorship in Washington, your business may require any one of the above or all of the above licenses. Whether or not you require these licenses will depend on the business profession, business activity, and the city where your company is located.

The licenses and permits are issued by different agencies. The state business license is issued by the Department of Revenue (DOR) while a city license would be issued by the city licensing administration. Identifying the right licenses can be a complicated task, this is where our Business License Research Report service can provide the necessary guidance and aid. This research report contains a detailed list of filing instructions, supporting document requirements, and fees for all business licenses and permits necessary for your sole proprietorship business in Washington.

6. Open a bank account for your Washington business

Sole traders or proprietors often feel as though they don’t require a separate business account for banking purposes. Having a business bank account has its advantages especially when it comes to managing finances. Opening a business banking account is an ideal professional decision because they have been specifically designed to serve the financial and accounting requirements of a business.

You can open a business or checking account before or after you start a sole proprietorship in Washington. The greatest benefit is that it will help make organizing your finances easier. These accounts allow you to view your balance, track your expenses and income, and check outstanding payments. A business bank account also helps build your business credit rating.

7. Report and pay taxes

Since a sole proprietorship is operated by a single owner, it is considered an unincorporated business for tax purposes. Normally, the owner of this type of entity has to file personal income tax but Washington State doesn’t have any personal or business income tax. Therefore, if you start a sole proprietorship in Washington then you will be required to file sales and use tax in the state depending on your business activity and the location of your company.

Example: If you start your company in Seattle then the combined sales tax rate would be .101, but if you are based in Vancouver then the rate would be .084. The combined tax rate includes local and state sales tax.

After registering a sole proprietorship in Washington, if it is involved in retail sales or the sale of tangible personal property then a retail sales tax will be levied. It also includes the sale of services like cleaning, repair, and recreational services among others. The use tax is applicable only for the use of goods as well as certain services.

Ready to Start a Sole Proprietorship Business in Washington?

A sole proprietorship, one of the simplest business structures, is well favored amongst first-time business owners. If you are wondering how to start a sole proprietorship in Washington then you will be happy to know that you are not required to submit any paperwork with the office of the Secretary of State. Although there is no registration process; paperwork and documentation will be required for making the company operational. This is where IncParadise can provide guidance and expertise to help you start a sole proprietorship in Washington with ease.

Once you form a new business in Washington, there are certain state guidelines and annual requirements that you may be required to fulfill. This is why IncParadise provides a wide variety of additional services like filing a DBA, and getting an EIN, among others.

Do you want to start a sole proprietorship in Washington?

How much does it cost to form Washington LLC or Corporation

Date: | Category: | Author: developers

How much does it cost to form a Washington LLC or Corporation?

Washington is considered one of the top states for setting up a new business. The economy is stable and has grown by 3.7% in the last few years. It is home to several high-growth industries like Aerospace, Agriculture, Clean Technology, Food Manufacturing, Forest Products, Life Sciences, and IT among others. If you want to start a business in this state and want to know about the costs of forming an LLC in Washington; then this guide will be helpful. This guide has been created to provide you with an insight into many facets of the incorporation of an LLC formation in the state.

Washington LLC or Corporation

There are a variety of types of business structures available to choose from depending on your needs and objectives. A limited liability company and a business corporation are two of the most popular entity structures. Whether you choose to incorporate in Washington or form an LLC; each has its advantages and state-specific maintenance requirements. There are several other items to consider including the cost of forming a corporation in Washington and state business taxes.

Which business entity should I choose for my Washington business?

Washington is considered a global leader in several essential industries including aircraft and unmanned aerial systems (UAS). The state is also home to several unicorn startups with Seattle ranked #9 in the list of top startup ecosystems. The business climate along with a steady infrastructure, availability of a talented workforce, and taxation are determining factors in choosing a business structure. The chosen structure will further define the actual cost of forming an LLC in Washington or a corporation. We have listed several focal points that will help you determine the right structure for your business.

  • Ownership Control – The structure of ownership or ownership control in an LLC is different from that of a corporation. There are certain business structures like sole proprietorships that have a single owner. An LLC can have single or multiple owners. Corporations and partnership firms conversely, cannot operate with single ownership. A corporation has to issue shares and each shareholder is considered an owner of the company.
  • Funding or investment – The cost to form a corporation in Washington as well as any other business type, and operational costs are considered to be a part of capital investment. A new business always requires funds and the operational costs for certain entities can be more than for others. The state provides grants and funding options to all businesses but getting an investment from VCs and other private sources is easier for corporations in comparison to an LLC.
  • Taxes – State taxes or business taxes are one of the central points that will help you choose a business structure. If you form an LLC in Washington, then it will be considered a pass-through entity in terms of taxation, whereas a corporation undergoes double taxation. The entity type selected will also determine the state taxes one is liable to pay.
  • Limited Liability Protection – Liability Protection is another paramount basis for identifying the best structure for your business. Liability protection helps business owners avoid any personal liability for company debts
  • Complexity – There are a few particular entity structures that have a complex registration process. They call for more documentation and may require written laws concerning the way management functions, duties, and the way operations are conducted.

Washington LLC Costs

A limited liability company is one of the most popular entity structures due to its many benefits. The lower cost to form an LLC in Washington is just one of several other advantages this type of business structure offers. You can choose to form a sole proprietorship and treat it like a single-member LLC (SLLC) or start a Multi-member LLC and elect S Corporation status. If you are interested in forming an LLC in Washington, then let us take a look at the several costs you may encounter.

Costs of forming an LLC in Washington

The cost to form an LLC in Washington should include the initial new business registration fee, as well as annual maintenance costs. Making the business operational may include several other expenses. The principal fees are:

  • Reserving a business name is the primary step to forming an LLC in Washington. You will have to file the name reservation form along with a fee of $30.
  • According to state laws, you will need to hire and maintain a registered agent for the service of process. The cost or fee would vary depending on the service you select.
  • The business registration fee is the single most significant cost to form an LLC in Washington. You will have to file a Certificate of Formation along with a filing fee of $180. If you want to expedite the process, there is an additional fee of $50.

Annual maintenance costs for a Washington LLC

Once you have registered your limited-liability company in Washington; it is critical that you meet all state requirements including the annual business maintenance requirements. This includes the Washington LLC annual fee for keeping the business active and operational. The fees involved are included in the following:

  • Annual Report – Filing annual reports is a mandatory annual requirement for all LLCs.
  • The Washington LLC maintenance cost for an annual report is $60. The report has to be submitted annually by the end of the LLC’s registration anniversary month. Failure to submit this report can lead to penalties and even dissolution of the company.
  • Taxes – Since a limited liability company is considered a “Pass-through Entity”; the company will not file any taxes on the business income. Instead, the owners or members will have to file taxes on their share of profits. There are other taxes that your company may have to file and are considered part of the cost to form an LLC in Washington.
  • Business Licenses – Once you have filed the Certificate of Formation, you will need to apply for a business license or permit to operate in the state. This is another form of Washington LLC maintenance costs and will vary according to the type of licenses, the number of permits or licenses, and the county where your business is located. It is important to remember that business licenses have to be renewed annually.

There are several processes involved in a new business formation as well as keeping the business active and operational. There are different expenses involved including a Washington LLC annual fee. We, at IncParadise, can assist you with the registration of your LLC in Washington and provide guidance and expertise wherever you may require it.

Register your LLC in Washington Today!

Washington Corporation Cost

A modern-day business corporation is also known as the C Corporation and is another well-favored legal structure. A corporation works differently from an LLC and although the cost to form a corporation in Washington or incorporation cost is the same as that of a limited-liability company. If you have an interest in forming a Washington Corporation then let us take a look at some of the expenses you may encounter.

Cost of forming Washington Corporation

The Washington corporation maintenance cost includes the initial registration costs as well as various annual fees. The principal costs related to forming a Washington Corporation are:

  • When you start a new business, You will need to decide on a name for your company. To identify a name, conduct a business name availability search, and then reserve the chosen name with the office of the Washington Secretary of State. The name reservation fee is $30 and it is an essential cost to form a corporation in Washington.
  • The state laws require you to designate and continuously maintain a registered agent in the state according to WA Rev Code § 23B.05.010 (2012). The role of a registered agent is to facilitate service of process. The fee or cost will vary depending on the service chosen by you.
  • The third and most cardinal Washington corporation maintenance cost is the new business registration fee. You will have to file Articles of Incorporation with a filing fee of $180. If you want to expedite the process, there is an additional fee of $50.

Annual maintenance cost for Washington Corporation

Aside from the initial costs to form a Corporation in Washington, there are a variety of expenses concerning the annual maintenance of your business. The annual requirements will help your business to remain in compliance with all state laws. The costs include the following:

  • Annual Report – An essential annual cost for a Washington Corporation is filing the annual report. The fee for filing an annual report is $60. The report has to be submitted annually by the end of the incorporation anniversary month. If you fail to submit this report then it can lead to penalties.
  • Taxes – A corporation has a different tax structure from any other business entity. A corporation also undergoes double taxation. The state of Washington does not have any corporate income tax but depending on the type of activity, a company may be subjected to business and occupation (B&O) tax.
  • Business Licenses – After filing the Articles of Incorporation, applying for and obtaining a business license is important. A business license or county permit will allow you to operate in the state. This is another form of Washington corporation maintenance cost and will vary depending on the county, as well as the type of permits or licenses being issued. These licenses and permits must be renewed annually or on dates as prescribed by the county.

The cost to form a Corporation in Washington will also include obtaining an Employer Identification Number (EIN). We, at IncParadise, can not only guide you concerning fulfilling annual maintenance requirements but also help you with the process to incorporate in Washington.

Incorporate Your Washington Business with ease!

Need any Assistance in Forming Your Washington LLC or Corporation

There are certain processes and costs involved when you register an LLC or incorporate in Washington. These include initial new business registration-related processes as well as annual business maintenance. We at IncParadise, can provide valuable assistance by handling your incorporation or new business formation requirements while ensuring your company is compliant with all state laws.

IncParadise is one of the leading business incorporation and Washington registered agent service providers. We have helped thousands of corporations and LLCs with formation requirements. We also provide a wide variety of additional services like getting a tax id, foreign qualification, and S corporation status among others.

Are you ready to form a new business in Washington?

How to register a corporation in Washington

Date: | Category: | Author: developers

How to register a corporation in Washington?

Entrepreneurs and first-time business owners prefer to register businesses as corporations in Washington because this type of entity structure can be highly beneficial. Corporations in Washington have many benefits and advantages over other business entity types. The state has the largest concentration of STEM (science, technology, engineering, and math) workforce. This article has been created to provide you with guidance regarding the steps towards incorporation. This guide will provide an insight into the benefits of incorporating in Washington and the various processes involved like obtaining an EIN, creating business plans, local licenses and permits, and taxes among others.

Corporations in Washington

Entrepreneurs prefer to start corporations in Washington due to the superior business climate. The state exhibits a flourishing economy that provides a variety of business incentives and tax credits. Washington is home to several Fortune 500 companies as well as many small businesses. One of the benefits of incorporating a business in Washington is the convenience of their strong transportation and logistics infrastructure including ports, Foreign Trade Zones (FTZ), and Opportunity Zones.

What is a Washington Corporation?

Corporations are commonly referred to as C-Corporations. A C-Corporation is a legal structure where the shareholders and owners are taxed separately. It is a popular business structure in Washington, and across the U.S. C corporations are considered to be publicly traded companies that are owned by shareholders or those who have shares or stakes in the aforementioned company. There are various types of Corporations that you can form, from profit to not-for-profit entities. You can incorporate your business in Washington under the following:

What are the benefits of incorporating in Washington?

There are several advantages that entrepreneurs and startups find useful when they register a Corporation in Washington. A C Corporation is different from an LLC or any other entity in terms of its legal structure. A C-Corp has distinct advantages. Some of the benefits of incorporating in Washington are:

  • Limited liability for owners – One of the major highlights of a corporation that you as an owner will benefit from, is limited liability protection. This particular entity is considered to be a separate legal entity; the liabilities, debts, and other obligations, will remain separate from the owner. The owner will not be personally responsible for any business debts or liabilities.
  • Perpetual existence – Perpetual existence is another of many great incentives for incorporating in Washington. The business corporation exists separately from its shareholders or owners.
  • Transfer of ownership – Another favorable privilege when you incorporate in Washington, is ownership transferability. You will be able to transfer the ownership of the company by selling a share of the corporate stock.

Starting a Corporation in Washington

Washington is a great destination for startups and small businesses. It has just the right business climate to support your ideas and business. The state does not require you to file personal income tax returns and offers several tax incentive programs to help reduce your overall tax burden. So, how do you register a Corporation in Washington? Let us look at the various processes involved.

1. Name your Washington Corporation

Whether you want to start a corporation in Washington online or offline; the first step involves choosing a name and reserving it. A business name is the key identifier for every company and helps in distinguishing it from other entities. The name of a corporation is used for several purposes from incorporation, to sales, marketing, and branding activities. There are certain naming guidelines you will be required to follow governed by WA Rev Code § 23B.04.010 (2012). The guidelines also require the name to contain identifier words like “corporation”, “incorporated”, “company” or abbreviations like “corp.”, “inc.”, “co.” or “ltd”.

Once you have selected a unique name for your business, you will need to look up a corporation in Washington to confirm its availability. This process of determining your business identification is conducted through the business name availability search. If your chosen name is available then you can reserve it with the office of the Washington Secretary of State for 180 days. You will need to file the name reservation form along with a fee of $30 and mail it to the Secretary of State, Corporation Division.

2. Appoint a Washington registered agent

If you want to start a corporation in Washington then it is important to note that there is a specific process that you are required to follow. This process involves filing incorporation documents, name reservation, and maintaining compliance with all state laws. It may seem like a complex process and it will involve extensive documentation. A reputable Washington registered agent like IncParadise can assist you with the process of incorporation.

The state laws require you to designate and continuously maintain a registered agent according to WA Rev Code § 23B.05.010 (2012). IncParadise can not only help you register a Washington corporation online but can also be your chosen registered agent in the state. We have a deep knowledge of the state laws and provide meaningful assistance with the various processes involved in establishing an incorporation.

3. File Articles of Incorporation with Washington SOS

The foremost requirement to incorporate in Washington is to file the Articles of Incorporation for a Profit Corporation. You will be required to prepare and then submit the Articles of Incorporation pursuant to WA Rev Code § 23B.02.020 (2012). The Articles can be hand-delivered or mailed to the Office of the Secretary of State, Corporations & Charities Division. The filing fee is $180 and the expedited fee is an additional $50.

Are you thinking of starting a Washington Corporation?

4. Choose your Washington Corporation’s initial directors

A corporation is managed by a board of directors and officers, wherein the former is the governing body. You have to choose the initial directors before you register your Washington Corporation online. This is a mandatory requirement because they are the first directors and their names are submitted in the articles of incorporation. The initial directors are required to serve until the shareholders of the said company hold the first meeting for electing successors. According to WA Rev Code § 23B.08.030 (2012), a Washington corporation may have one or more directors.

5. Prepare bylaws for Washington Corporation

The initial board of directors or incorporators of a corporation in Washington will be required to adopt initial bylaws pursuant to WA Rev Code § 23B.02.060 (2012). You can adopt the bylaws before or after you start a corporation in Washington. The bylaws are the governing rules based on which a Washington corporation will operate. The bylaws constitute the following:

  • Rules and obligations of directors, shareholders, and officers
  • Annual meeting rules
  • Guidelines for removal of directors and officers
  • The purpose of the corporation
  • Stock issuance rules
  • Duties and responsibilities of owners and managers
  • Voting rights
  • Maximum and minimum number of directors allowed
  • Specific rules for making amendments to existing bylaws

6. Get an EIN for your Washington Corporation

The Employer Identification Number (EIN) is a unique nine-digit number that is assigned to businesses by the Internal Revenue Service (IRS). Certain businesses may not need this number but if you incorporate in Washington then you will need an EIN. It is also known as the Federal Employer Identification Number (FEIN) and is required for the filing of business or corporate taxes in the state. You may also need an EIN for hiring employees, obtaining credit, and opening a business bank account.

7. Hold an organizational meeting

There are many benefits of incorporating in Washington but the most important objective is to operate the company properly. This is made possible by holding a corporate organizational meeting. Such a meeting highlights all the important tasks that need to be executed. The tasks will vary from one company to another but some of the key areas covered in this meeting include:

  • Drafting articles of incorporation
  • Election of officers
  • Distribution of initial shares
  • Adopting corporate bylaws
  • Election of officers
  • Accepting resolutions necessary for the operation of the company
  • Voting for adopting the corporate seal

8. Open a bank account

Whether you start a brick and mortar store or an online business, having a business bank account really helps. When you start a corporation in Washington there may be several financial transactions in terms of making payments or expenses and receiving payments or revenue. Having a business bank account will help simplify these finances, ensure clean bookkeeping, and further assist with tax preparation and easy tax filing. A business banking account will also help in building your credit and creating a good credit history, which can be useful when applying for a loan.

9. File your annual report

Once you register your Washington Corporation online, you will be required to maintain annual state compliances. This helps the business to enjoy a good standing in the state. Another of the many vital requirements for your Washington business is filing your annual report. This report has to be submitted to the office of the Washington Secretary of State – Corporations Division according to WA Rev Code § 23B.16.220 (2012). The annual report has to be filed each year by the end of the incorporation anniversary month.

Example: If you filed the Articles of Incorporation on July 23, 2022, then your annual report will be due on July 31, 2023. The fee for filing this report is $60 and there can be penalties for not filing or filing late.

Know more about starting a Washington Corporation

There are several procedures involved in setting up a new business. If you are planning to start a corporation in Washington then you may have queries concerning the steps to incorporation. For that reason, we have created a special section of “Frequently Asked Questions” for addressing such queries.

Why is Washington a great place to start a Corporation?

Washington has a growth-oriented economy that supports several industries driven by small businesses and large corporations. There are several benefits to incorporating in Washington that a first-time business owner can enjoy including its pro-business climate. Some of the salient highlights of the state are:

  • It is a high-growth region for advanced manufacturing, clean technology, aerospace cluster, and cloud-based data centers
  • The state offers one of the lowest energy costs to businesses
  • Access to industry-specific tax incentive that encourage growth and innovation
  • A robust transportation and logistics system to facilitate the movement of goods
  • There are many opportunities for growth and expansion including opportunity zones, grant programs, and workforce training among others.

How much does it cost to incorporate in Washington?

You can form different types of businesses in Washington. The process, documentation, and fee may be different for each of them. If you plan to incorporate in Washington then you will be required to submit Articles of Incorporation. The initial cost to incorporate is $180. If you want to expedite the process then the total fee along with a business registration fee would be $230. Apart from this initial cost, there will be costs for your business licenses, name reservation, and annual report among others.

What are the annual costs associated with a Washington Corporation?

If you look up a corporation in Washington for annual requirements, the most significant is the annual report. You will also be required to file taxes annually and renew your business licenses and permits. It is important to note that the fee for county licenses will vary according to license type and county.

Are there any disadvantages in forming a Corporation in Washington?

There are many benefits when incorporating your business in Washington. A traditional corporation may have advantages as well as disadvantages. A corporation is one of the most preferred entity structures but it can have potential downsides. The biggest drawback is double taxation, which means that both the business and the shareholder will have to file taxes. Corporations also have rigid structures, formalities, lengthy application processes, and are expensive to operate.

Who can be a registered agent for your Washington Corporation?

If you intend to register Corporation in Washington then you will have to appoint a Washington registered agent pursuant to WA Rev Code § 23B.05.010 (2012). An agent can be an individual or a business that will have the authority to receive any legal or business documents like annual reports on behalf of your corporation. The registered agent representing you like IncParadise will provide a service of process on behalf of your company. You can also change your registered agent by filing a statement of change with the secretary of state.

Do all Corporations need a business license in Washington?

Yes, whether you register your Washington corporation online or by any other form of business entity, you will need to apply for business licenses and permits to make the business operational. It is mandatory to apply for Business License Tax Certificates with the Department of Revenue, Business Licensing Service. You may need to apply for county licenses and professional licenses as well.

How to qualify for a Foreign Corporation in Washington?

If you already own a business in any state other than Washington and want to move or expand your business in this state then you will need to apply for foreign qualification. This is a process through which you will be able to incorporate in Washington as a foreign entity. You will be required to file a Foreign Registration Statement or Certificate of Authority with the Secretary of State pursuant to WA Rev Code § 23B.15.030 (2012).

How do I dissolve my Washington Corporation?

Once you start a corporation in Washington there can be several reasons for dissolving the company in the future. The dissolution can be carried out by the board of directors, shareholders, and incorporators. You will be required to file the Articles of Dissolution for a Washington Profit Corporation pursuant to WA Rev Code § 23B.14.030 (2012). You will also be required to publish a notice of the dissolution within thirty days.

Ready to Start a Corporation in Washington?

There are a variety of business structures that you can form in Washington, though entrepreneurs prefer to incorporate their businesses over other types of entities. If you are thinking of registering a domestic or foreign entity in the state then IncParadise can assist you with the process of incorporation.

IncParadise is one of the top registered agents in Washington and we have helped with more than 10,000 new business formations. We also offer a wide variety of additional services like foreign qualification and EIN assistance, among others.

Do you want to incorporate in Washington?

Start a Business in Washington

Date: | Category: | Author: developers

Start a Business in Washington

The state of Washington situated in the Pacific Northwest region of the USA is considered one of the best destinations for new businesses. Entrepreneurs and small business owners prefer to start a business in Washington as it has consistently been ranked as a top state as far as the business climate is concerned. Entrepreneurs interested in incorporating a new business in the state will be required to follow state-governed laws and processes including business registration and applying for business licenses.

Entrepreneur’s guide to establishing a business in Washington

If you are a first-time business owner planning to start a business in Washington then you will be able to take advantage of several benefits that the state offers. The state boasts of a strong economic environment with no personal or corporate income tax. It has a highly competitive business environment including an abundance of state and business incentive programs that assist small and medium-sized enterprises to achieve financial objectives and operational excellence.

This guide has been specifically created for entrepreneurs, startups, and small business owners so that they can incorporate their business in the state of Washington with ease. The guide will provide information related to various aspects of a startup like preparing a business plan, choosing the right business structure and location, obtaining an EIN, and applying for a business license among others.

Why do companies prefer to incorporate and register in Washington?

Washington is a state with plenty of business resources. It has one of the top ten Real Gross Domestic Product (GDP) in the nation. The economy and even the larger industries are primarily driven by numerous small businesses from retail establishments to manufacturing. Washington state is home to numerous companies listed in the Fortune 500 such as; Amazon, Microsoft, Costco Wholesale, Starbucks, Nordstrom, Expeditors International, Weyerhaeuser, Expedia, and Alaska Airlines. Entrepreneurs who register their business in Washington state have several benefits available to take advantage of. Some of the top benefits are:

  • Tax-Friendly Environment – One of the benefits of incorporating a business in Washington is the tax-friendly environment. There are 7 states in the United States which have renounced individual income taxes, Washington is one such state. The state also doesn’t have any corporate excise tax and property tax on inventory. There are a wide variety of tax incentive programs according to each industry which can help businesses to offset any applicable taxes.
  • Pro-Business Environment – The business climate in the state of Washington is quite the favorite amongst entrepreneurs and startups. Once you register a business in Washington, you will have access to an environment that offers a platform for creativity and innovation, a strong and educated workforce, a powerful emerging startup climate, a robust transportation infrastructure; and supply chain logistics.

When entrepreneurs incorporate in Washington, there are several benefits available for your company to take advantage of, including access to state incentive programs, financial aid, and grant programs by the Washington State Department of Commerce.

Steps to start a business in Washington

The state of Washington is home to several industries including several high-growth industrial sectors. If you are planning to start a business in Washington then steady business growth and economic stability are two professional highlights for you to look forward to. However, forming a new business is never an easy process, and there are several factors you must consider before you take the first steps. Let’s take a look at some of the key factors that can help strengthen your business, and guarantee your ability to achieve your desired objectives.

1. Prepare a Washington Business Plan

Every business has specific objectives, a target market, and products or services that are different from any other business in the same industry. For that reason, the business plans for two businesses are hardly ever identical, even though some of the components or elements of the plan might be similar. This plan is also known as a corporate plan and focuses on key components for operating a successful business. If you are planning to incorporate in Washington, then your plan should take into consideration an efficient marketing launch, pivotal financial details, diverse marketing strategies, and adverse competition.

Providing a business projection of at least 5 years advanced time is one of the principal reasons for creating an impeccable business plan. The purpose of an operational plan is to provide an outline of the path that a company needs to follow which is beneficial to them in achieving growth, expansion, and income. If you plan to register a business in Washington then your company operation plan should include the following components:

  • Executive summary
  • Company description
  • Products and services
  • Market analysis
  • Competitive analysis
  • Financial features and requirements
  • Management and Organization
  • Branding and marketing
  • Logistics and operations
  • Financial Projection

2. Attend Entrepreneurial Training or Development Programs in Washington

Creating a new business or start-up from scratch can be an arduous task. For this reason, entrepreneurs or small business owners can benefit from entrepreneurial training or development programs. These particular programs help in strengthening the specific skill sets needed for first-time business owners through a variety of business development training. If you intend to start a business in Washington then you would benefit from checking out some of the top programs available such as the “StartUp Washington” program by the Washington State Department of Commerce.

“StartUp Washington” can help you learn how to navigate through the several aspects of creating and managing a new business including, ways to increase profitability, calculated use of your building capacity, and strategies for stimulating growth. Choosing to incorporate a business in Washington comes with many opportunities to participate in various events, conferences, summits, and workshops on various business topics including setting up successful startups.

3. Choose an Appropriate Structure for your Washington Business

Bear in mind that there are several decisions you must consider before you register a business in Washington. Choosing the most suitable entity structure for your company to be identified as one of the most pivotal decisions you as an owner can make. It is important to note that each type of structure has its own advantages and limitations including tax treatment.

Whether you choose to form an LLC, incorporate in Washington, or go with a sole proprietorship; each structure will cater to specific business objectives or goals, both in the short and long-term planning. Therefore, it is extremely important to conduct research and take the time to decide on the most appropriate structure for your company. The type of business entities you can choose in Washington are:

One of the most reputed Washington registered agents like IncParadise can help you start a new business in the state.

4. Naming Your Washington Business

The two most fundamental elements of any branding strategy are the business name and the logo. Business names create powerful visualization and have the ability to provide customers with an idea about the brand, product, or services. A company name also imparts significant value especially if you want to start a business in Washington and create a franchise soon after. When finalizing a business name, there are several aspects to consider including state naming requirements and guidelines. Let’s look at the naming guidelines and process according to the Washington Secretary of State:

  • The business name in the state of Washington will vary according to the entity structure especially when it comes to the use of words and abbreviations. If you were to incorporate in Washington then the name should contain words like “corporation” or “incorporated” or abbreviations like “Inc.” or “Corp.”.
  • The Washington business laws also state that a business name should be unique and distinguishable from any other business name in the state. This is made possible by conducting a name availability search. This process will help you to determine distinctiveness as well as the availability of the said name to be reserved.
  • You will need to reserve your company name before you register a business in Washington. The reservation fee and forms are the same for all types of entities and you have the option to expedite the process by paying an additional fee. The name reservation application must be submitted to the office of the Secretary of State, Corporation Division.

5. Choose The Best Location for Your Washington Business

When you start a business in Washington one of the most significant focal points is the location of your company. Location plays an integral role in the success or failure of any business. When envisioning the location of your business, consider several key elements like the availability of an educated workforce, access to the state infrastructure, who your competition will be, your target customer base, and the overall market conditions.

Let’s look at an example to better understand this point. Seattle is considered to be one of the top tech hubs in the Pacific Northwest, as well as the nation. So if you were to start a business in the tech industry then Seattle would most likely be your first choice. There are several top cities where you can incorporate your business in Washington, or form a new business and these include:

  • Seattle
  • Olympia
  • Lacey
  • Richland
  • Redmond
  • Bellingham
  • Pasco
  • Burien
  • Shoreline
  • Lakewood

Here are some of the chief elements to focus on when choosing the right location to register your business in Washington:

  • Transportation and logistics are vital details as they enable the movement of products or goods. If your company is in the manufacturing or retail industry then emphasis on these features are crucial. You can also choose specific industrial hubs in the state as they offer a robust transportation infrastructure as well as several business incentives and tax credits. Such hubs include opportunity zones that may offer various advantages when incorporating businesses in Washington.
  • The availability of educated and professional talent is also vital concerning the success or growth of any business. Sometimes locating your business in a city with a maximum number of universities and other skill-developing institutions can be quite beneficial.
  • It is important to check the city or county zoning ordinances where you plan to oversee your business. These regulations provide information and rules concerning commercial spaces, city or county licensing and permits, building codes, and land use.

6. Register Your Business with The Washington Secretary of State

Starting a business in Washington requires particular state-governed processes and requirements which must be met. You will have to complete and submit documentation determined by the type of entity structure you wish to form. The governing laws, processes, forms, and fees may vary according to the entity structure. The new business registration documents have to be filed with the office of the Washington Secretary of State, Corporation and Charities Division. Let’s look at an example to understand this.

Example: If you want to form a C Corporation then you will have to submit the Articles of Incorporation of a Profit Corporation with the Washington Secretary of State pursuant to WA Rev Code § 23B.02.020 (2016). The processing fee for the incorporation documents will be $180 and the process can be expedited by paying an additional fee of $50. Similarly, if you want to register a business in Washington as an LLC then you will be required to file a Certificate of Formation along with a filing fee of $180 pursuant to WA Rev Code § 25.15.071 (2016).

The most important part of the filing process is the preparation of the Articles of Incorporation or Certificate of Formation, which may seem like a complex process as you are required to provide a wide variety of information. This is where a reputable Washington registered agent service like IncParadise can assist you. Whether you want to form an LLC or a corporation, we can help you to register your company with the state.

Do you want to form a new business in Washington?

7. Get Your EIN

Once you register a business in Washington, you will be required to fulfill certain Federal and state requirements. One of the most important requirements is that of business taxes. Consequently, you will need to apply for and obtain an Employer Identification Number (EIN) to file a business tax return. The EIN is a unique tax ID number issued by the Internal Revenue Service (IRS) and not all forms of businesses require it.

8. Open a Business Bank Account for Washington Business

Whether you are planning to incorporate in Washington or start a small sole proprietorship firm, it is extremely important to establish certain business practices in the initial phases itself. Since, managing finances is a crucial aspect of any new business; it is always recommended to open a business bank account. This account unlike your personal account will focus entirely on business-related expenditures and earnings. Although it is a legal requirement for certain forms of entities like a business corporation, there are several benefits of a checking account that any entity structure can enjoy. You can open a business bank account before or after you register a business in Washington. Some of the benefits are:

  • Your company bank account will help with tracking business income, thus reflecting overall business growth.
  • It will make it easier to track your business expenses and will enable client or vendor payments
  • It will help in streamlining company financial records as well as tax information
  • Having a business account increases credibility
  • Help in providing clear records of audits
  • Plays a key role in establishing business credit

9. Obtain Necessary Washington Business License and Permits

There are several state requirements that every new business needs to meet in order to run smoothly. One of the most important requirements is obtaining a Washington business license, which will enable the business to be operational in the state. Even if you register with the state, you will not be able to conduct your business without licenses or permits. You may need single or multiple licenses and it will vary on the type of business activity and the location. Let’s take a look at Washington state business licensing requirements.

  • Business License Tax Certificates – This is a form of general license or Washington business license that is issued by the Department of Revenue. You can apply for this by using a Business License Application (BLA) after you register a business in Washington. The Business License Tax Certificates can also be issued by the local authorities or License and Tax Administration agencies in cities and counties.
  • County Specific Licenses – A Washington business license or permit can also be issued by a county depending on the business activity, and the county where the said business is located. There are several types of activity or even industry-specific licenses and permits issued by counties.

Example: If you start a business in Washington as a permanent food establishment then the permits required may vary from one county to another. If your establishment is located in King County then you will need to file an application for a permanent food establishment along with a Plan Review Application.

It is important to note that some businesses may even need occupational licenses or regulated industry licenses depending on the business activity or profession. The Washington business licensing regulations and requirements can be fairly complex, and this is where IncParadise can help you. We offer a “Business License Research Report” service, which is a detailed report containing a list of filing instructions, supporting document requirements, and fees for all business licenses and permits in this state.

10. Register for Taxes

Once you register a business in Washington, there are several types of state or business annual maintenance requirements that you must also fulfill. These requirements can vary from one state to another, although the most particularly common is taxes. The business structure you choose may determine the type of taxes applicable to your business.

Washington is considered to have one of the best business tax climates in the nation and the most common tax applicable is the Business & Occupation Tax. The state also has sales & use tax as well as property tax. After you incorporate in Washington you will need to file taxes with the Department of Revenue (DOR). Therefore, you will need to set up a SAW User ID (SecureAccess Washington account).

11. Annual and Ongoing Requirements

Once you register a business in Washington, you will be required to fulfill specific annual state requirements. Meeting these requirements will allow the business to enjoy active status. The type and nature of annual requirements can vary from one state to another. For example, if you obtain a Washington business license then you will need to renew it each year. Similarly, you will also be required to file annual tax returns for your businesses such as corporate tax and sales or use tax.

One of the most important annual requirements when starting a business in Washington is the annual report. There are a variety of entities that are required to file this report including Limited Liability Companies, Profit Corporations, and Limited Partnerships among others. The report has to be filed with the Washington Secretary of State, Corporations & Charities Division along with a filing fee of $60.

Some Important Quick Resources for Washington Businesses

Once you have put together a business plan, it is time to start a business in Washington. To operate your business successfully, you will need to proceed with various processes involved with the registration and maintenance of a new business. This is where useful knowledge can be helpful, and there are various government and private agencies that can provide the necessary resources. Let us look at some of the important resources.

Washington Secretary of State

The office of the Washington Secretary of State (SOS) is responsible for handling all types of requirements concerning the formation of new businesses. They also provide detailed information on the different types of entities that you can form in the state. They have several programs and business-related services like trademark registration, Apostilles, Service of Process, and other various types of forms and fees.

Washington Taxation Departments

The Washington taxation department is also known as the Department of Revenue (DOR). Their website provides information regarding how to start a business in Washington, managing a business, various applicable business taxes in the state, tax rates, and the procedures for filing taxes. The taxation department also provides information and guidance concerning Washington business licenses. You can even find an extensive list of publications on tax incentives and liabilities in various industries.

  • Washington Department of Revenue
    Department of Revenue
    Special Programs Division
    PO Box 47477
    Olympia WA 98504-7477
    Phone: 360-705-6741
    Website – https://dor.wa.gov

Washington Department of Labor & Industries

The Washington Department of Labor & Industries provides information about labor. If you incorporate in Washington, you may need to go through their safety training manuals, health and safety rules, and even request a safety consultation, depending on the industry you choose. You will also find information on the various grants available in the state. The website provides information on business insurance, wages, workplace policies, and several other types of licensing and permits.

  • Washington Department of Labor & Industries
    7273 Linderson Way SW
    Tumwater, WA 98501-5414
    Phone: 360-902-5800
    Website – https://www.lni.wa.gov/

Washington Small Business Development Center

If you are planning to start a business in Washington, keep in mind there are several sources which can provide you with valuable business information like the Washington Small Business Development Center (WSBDC). As a new business owner, you can find the right training, tools, and resources, as well as business assisting and advising services. Their Start-up-Guide is also an important resource that provides detailed information on feasibility and financing.

Washington Chamber of Commerce Executives

The primary objective of the Washington Chamber of Commerce Executives (WCCE) is to provide information and resources required to achieve success in business through education, coordination, and facilitation. There are 200 chambers in the state of Washington available for you to reach out to. They organize leadership events and conferences for first-time business owners and entrepreneurs. You can also benefit from their small business guidance services.

Ready to start a business in Washington?

Washington is quite a popular state for entrepreneurs and business owners due to its favorable business climate. You can start a business in Washington and achieve high growth and expansion, even though the startup registration process may seem quite complex. This is where a reputed Washington registered agent like IncParadise can provide valuable assistance. We have the necessary expertise, experience, and understanding of state laws that can help you with your new business formation.

IncParadise has already helped thousands of businesses to form an LLC or a business corporation in the state. We also provide a wide variety of additional services like EIN assistance, and foreign qualification among others.

IncParadise can help you to start a new business in Washington!

How to form your LLC in Washington

Date: | Category: | Author: developers

How to form your LLC in Washington

Washington is considered the leading producer of lumber and is home to small businesses and large enterprises. The Real Gross Domestic Product (GDP) of the state is generated by several big industries including computer software development. The state offers several benefits for entrepreneurs to enjoy when they form an LLC in Washington, including a variety of tax incentive programs. This article has been created to provide you with guidance on the topic of starting an LLC. The guide will provide you with insight into various business requirements like the Washington LLC operating agreement, local licenses and permits, and taxes among others.

LLCs in Washington

Entrepreneurs prefer to start an LLC in Washington because it has one of the top pro-business climates in the nation. Today, the state situated in the Pacific Northwest region is home to more than 600 thousand small businesses and this includes several Fortune 500 companies like Amazon, Expedia, Alaska Airlines, clothing merchant Nordstrom, and Microsoft among others . The state not only has a strong industrial base but also small business incentives and grants programs that aid with business growth and expansion.

What is an LLC in Washington?

A limited liability company (LLC) is a type of business structure that provides limited personal liability. An LLC may have a single owner (member) or multiple members. The tax classification of an LLC by the IRS is that of a “pass-through entity”. It is also considered to be a hybrid entity as it has similar characteristics to a C Corporation as well as a partnership. If you want to form an LLC in Washington then you may choose from any of the following structures:

  • Single-Member LLC similar to Sole Proprietorship
  • Multi-member managed LLC
  • Manager-managed LLC
  • A series LLC
  • Manager-Managed LLC
  • Foreign limited liability company

What are the benefits of forming an LLC in Washington?

If you want to establish a limited liability company then a Washington LLC registered agent can help you with the process. There are several facets to this particular type of entity but above all, it offers several benefits. Some of the advantages are:

  • Limited Personal Liability – Business debts are an important aspect of any company. Now, if you register a Washington LLC online then unlike certain other forms of entities, an LLC will enjoy limited liability protection. This simply means that as the owner or member of the said LLC, you will be protected from liability due to any debts of such an LLC.
  • Tax Flexibility – One of the greatest advantages of an LLC is the ability to elect the type of taxation it will follow. A limited liability company may elect to be taxed as a C Corporation, S Corporation, sole proprietorship, or partnership.
  • Membership Flexibility – When you set up a limited liability company, you will be able to enjoy certain flexibilities in terms of management structure. This means that the core members of such a limited liability company may include individuals, partners, trusts, estates, or other business entities.

Forming an LLC in Washington

Washington is quite a popular state among entrepreneurs and you can register a Washington LLC online. The state has a sound business infrastructure that includes the availability of a skilled workforce, a strong culture that promotes creativity, the availability of low-cost energy, and a robust supply chain. There are however several key areas to focus on when starting a limited liability company as these will pave the way for conducting business skillfully and efficiently.

1. Choose your Washington LLC name

One of the most important aspects of any new LLC in the state of Washington is the business name. A business name is essentially the identity of the company and is used for several purposes including registering a business, marketing, and branding activities. There are certain naming guidelines you will be required to follow governed by WA Rev Code § 25.15.011 (2016). The guidelines require the name to contain words like “limited liability Company”, “limited company” or abbreviations like L.L.C or LLC.

Once you have selected a unique name, you will need to conduct a Washington LLC name search. This process of business name availability search ensures you can reserve the chosen name with the office of the Washington Secretary of State. You will be required to file the name reservation form along with a fee of $30 and mail it to the Secretary of State, Corporation Division.

2. Choose a Washington LLC registered agent

If you are interested in starting an LLC in Washington, there are necessary steps that must be taken. The new business registration process varies from one state to another and correct information is a crucial detail that cannot be overlooked. You will also have to maintain compliance with all state laws. A limited liability company is required to continuously maintain a registered agent in the state pursuant to WA Rev Code § 25.15.021 (2016). A Washington LLC registered agent like IncParadise can assist you with the process of new business formation.

IncParadise can be your Washington LLC registered agent as we are committed to providing a service of process, as required by the Revised Code of Washington. We can also assist with the process of helping you register a Washington LLC online.

3. File a Certificate of Formation with Washington SOS

The foremost requirement to start an LLC in Washington is the Certificate of Formation for a Limited Liability Company. You will be required to prepare and submit the Certificate of Formation pursuant to WA Rev Code § 25.15.071 (2016) along with a filing fee of $180. A Washington LLC registered agent like IncParadise can help you with the submission process. The certificate can be hand-delivered or mailed to the Office of the Secretary of State, Corporations & Charities Division. You can expedite the process by filing an additional fee of $50.

Form your new business in Washington Today!

4. Prepare Washington LLC operating agreement

To successfully form and operate an LLC in Washington, you will require an operating agreement. It is a type of legal document, which will allow you to shape the financial as well as the working relationship of the LLC with its members or co-owners in such a way that it benefits the business. This document is an internal document and is not required to be submitted to the state. A Washington LLC operating agreement helps with protecting overall business operations. Some of the key areas of a basic operating agreement are:

  • The percentage interests of each member in the LLC
  • The rights and responsibilities of the members
  • The voting powers
  • The allocation of profits and losses
  • The capital contribution
  • The future changes to the membership structure
  • The rules for holding internal meetings
  • Dissolution or buyout

5. Obtain a Washington LLC EIN

Once you register a Washington LLC online; you will be required to maintain annual state requirements. One such requirement is that of state or business taxes. To file these taxes, you need to possess a tax ID. If you own a single-member LLC then you will require a Social Security number (SSN) to file taxes but if it is a multi-member LLC then you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

6. Open a Bank Account

When starting a new LLC, apart from creating a Washington LLC operating agreement; the second most vital step is opening a business bank account. This is also known as a checking account and plays an essential role in protecting business interests, further aiding in the overall growth of the business. One of the greatest advantages of having a business account is that it will help you to maintain a record of all your business expenses thus simplifying tax reporting.

7. Obtain necessary business licenses and permits for Washington LLC

When you form an LLC in Washington, there are several state requirements for each business to meet. Apply for your state business licenses or permits post registration. Different types of licenses that may be applicable depending on business structure, location, and activity. Once you have acquired the necessary license, your business can become operational. It is critical to remember that business licenses are also an annual requirement like a Washington LLC annual report. Licenses and permits for Washington LLC can be categorized under:

  • Business License Tax Certificates – This is a general license mandatory for every domestic LLC and that is issued by the Department of Revenue, Business Licensing Service. You will need to provide your Unified Business Identifier (UBI) and EIN while applying. The fee is $90.
  • County or City Licenses – This is a type of license that is also known as a local license. Every county in Washington has different rules and regulations for licensing. You may need a single or multiple Washington business licenses or permits to operate in any said county.

    Example: If you start a business in Kings County or are planning to install amusement devices then you need a county license. A Pool table license starts at $100 per table and will be a maximum of $500 per establishment.

  • Professional and occupational licenses – The requirement of this license depends on which specific area or activity the business focuses on. Certain professions associated with business like Athletic Trainers, Accountants, Security Services, Cosmetologists, and Vehicle manufacturers are areas where licensing is regulated by the Washington state department of licensing.

The Washington business licensing regulations and requirements may seem confusing and complex. A top Washington LLC registered agent like IncParadise offers a “Business License Research Report” service. This is a detailed report containing a list of filing instructions, supporting document requirements, and fees for all business licenses and permits in this state.

8. File an LLC annual report

Once you register Washington LLC online and obtain the necessary permits and licenses, the next step is to meet all required annual state compliances. One of the most pivotal requirements for several businesses, including a limited liability company is filing an annual report. This report has to be submitted to the office of the Washington Secretary of State – Corporations Division according to WA Rev Code § 25.15.106 (2016). You are required to file the Washington LLC annual report each year by the end of the LLC registration anniversary month.

Example: If you have filed the Certificate of Formation on August 10, 2022 then your Washington LLC annual report will be due on August 31, 2023. The fee for filing this report is $60 and there can be penalties involved for late or no filing.

9. Comply with Washington LLC taxes and other regulations

Once you register your Washington LLC online, you will be required to comply with annual maintenance requirements. State taxes are equally as important as the Washington LLC annual report. The type of state or business taxes will depend primarily on the entity structure, and for an LLC, the most integral is the Business & Occupation Tax. This is a gross receipts tax that is measured on the value of any products, gross income, or gross proceeds from sales.

If your Limited Liability Company has employees then you may also be required to pay employer taxes. Apart from this, sales and use taxes may also be applicable if you are selling some form of goods to consumers within the state.

Know more about starting an LLC in Washington!

The process to register a Washington LLC online may include several questions concerning different aspects of your new business formation. We have created a special section of Frequently Asked Questions for addressing some of these queries.

Is Washington a good place to start an LLC?

The state of Washington has been consistently ranked as one of the top states for starting a new business. The state is home to large corporations, single-owner, startups and work-from-home businesses. Some of the salient highlights of the state are:

  • A rapidly growing economy with a 5.7 percent increase annually
  • Energy costs for businesses are quite low as compared to other states in the country
  • A variety of landscape that promotes tourism including a 3,000-mile coastline
  • Washington is currently ranked 7th in the country for higher education resulting in the availability of a talented workforce
  • Wasahington is home to a strong creative community and a diversity of industries

How much does it cost to register an LLC in Washington?

If you want to form an LLC in Washington then you will be required to submit a Certificate of Formation. The initial cost to register an LLC is $180. If you want to expedite the process then the total fee along with the registration fee would be $230. Apart from the initial cost, additional costs include the Annual Registration, Business Licenses, Name Reservation, and hiring a Washington LLC registered agent among others.

What are the annual fees for a Washington LLC?

The annual fee will vary depending on the type of documents being submitted. Once you start an LLC in Washington, you will need to file annual reports ($60 filing fee), name reservation ($30) and business license ($90 non-refundable fee) issued by DOR. It is important to note that the fee for county licenses will vary according to license type and county.

What are the disadvantages of forming an LLC in Washington?

Choosing to form an LLC in Washington is one of the best structures that you can choose to form. Since a limited liability company is governed by Washington state law, this may affect the way an LLC can behave in certain scenarios, especially in cases of dissolutions. The biggest disadvantage is a transfer of ownership, which is a much harder process for an LLC, than for a corporation.

Do I need a registered agent for my Washington LLC?

Yes. If you are planning to conduct your business in the state of Washington then you will need to operate your company according to the state laws. The Revised Code of Washington requires every LLC to hire and maintain a Washington LLC registered agent according to WA Rev Code § 25.15.021 (2016). You can also change your registered agent by filing a statement of change with the secretary of state in accordance with RCW 23.95.430.

Does an LLC need a business license in Washington?

Yes. A business license is required for any company to be operational. You may incur a penalty if you conduct business without proper licenses or permits.

Can I register a foreign LLC in Washington?

Yes. You can register and operate a foreign LLC in the state. You will need to file a Profit Foreign Registration Statement pursuant to WA Rev Code § 25.15.321 (2016), with the office of the Secretary of State, Corporation & Charities Division. This process is known as the “Qualification of Foreign LLC” and without it; you will not be allowed to conduct business in Washington.

Can I cancel my LLC in Washington?

If you want to cancel it or close your company then the LLC has to undergo the process of dissolution. According to state laws, WA Rev Code § 25.15.265 (2016), you will be required to file a Certificate of Dissolution with the Secretary of State, Corporations & Charities Division. There is no fee for dissolution.

Ready to form a Washington LLC?

A Limited Liability Company is one of the most popular structures that you can form in Washington. There are several advantages to forming this structure over other business structures including tax benefits. If you want to start an LLC in Washington then IncParadise can assist you with the process of registration for your new business.

IncParadise is a highly reputable Washington LLC registered agent and we have helped with the registration of more than 10,000 businesses. We also offer a wide variety of additional services like foreign qualification, EIN assistance, and certificate of good standing in Washington among others.

Do you want to register your LLC in Washington?