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.
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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.