Start a Business in Washington

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.

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.

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.

• 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.

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.

• Sole Proprietorship
• General Partnership
• Limited Liability Company (LLC)
• Corporation
• Limited Partnership (LP)
• Limited Liability Partnership (LLP)

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.

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

• 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).

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.

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.

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.

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 Secretary of State
  Legislative Building · PO Box 40220
  Olympia, WA 98504-0220
  Phone: 360- 902-4151
  Email: secretaryofstate@sos.wa.gov
  Website – https://www.sos.wa.gov/

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 Small Business Development Center
  901 East 2nd Ave., Suite 210
  Spokane, WA 99202
  Phone: (833) 492-7232
  Email: washington@wsbdc.org
  Website – https://wsbdc.org/

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.

• Washington Chamber of Commerce Executives
  PO Box 1349
  Enumclaw, WA 98022
  Phone: 360-802-4595
  Email: wcce@comcast.net
  Website – https://www.wcce.org/

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.