A limited liability company (LLC) offers liability protection and tax advantages, among other benefits for small businesses.
LLC formation in Washington is easy. Just follow these eight steps, and you'll be on your way.
1. Name Your Washington LLC
You'll need to choose a name to include in your certificate before you can register your LLC.
Names must comply with Washington's naming requirements. The following are the most important requirements to keep in mind:
- Your business name must include the words Limited Liability Company, Limited Liability Co., LLC, or L.L.C.
- Your name must be different from an existing business in the state. You can conduct a search on the Secretary of State's website to determine if a particular business name is in use. For name availability in Washington, check this link.
- The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.
See a complete listing of Washington's naming rules.
- URL availability. Even if you don't think you'll need a webpage, you probably will. At the very least, you should reserve the option of having one in the future by buying your domain name now. Before finalizing your LLC name, it's a good idea to check if the URL is available.
- Reserve your name. If you aren't ready to register your LLC but are concerned your name might be taken by someone else, you can reserve it for a small fee. In Washington, names may be reserved for up to 180 days by paying the fee and submitting the proper form to the state authority.
2. Choose Your Registered Agent
Washington requires you to appoint a registered agent for your LLC.
A registered agent is the LLC's official contact. This is the person or entity who will receive legal documents, government correspondence, tax forms, as well as notice of lawsuits on the LLC's behalf.
A registered agent can be a person (including yourself or an employee of your LLC) or an entity that offers a registered agent service. They must meet the following criteria:
- Entities (or companies) must provide registered agent services.
- The agent must have an address in Washington.
- The agent must be on-site and available to accept documents during regular business hours.
3. Prepare a Certificate of Formation
The Certificate of Formation is a document that officially establishes your LLC by laying out basic information about it. In other states, this is known as the articles of organization.
Prepare your Certificate of Formation and file it with the Washington State Corporate Commission to properly register your Washington LLC. Though it sounds like a big job, that simply means filling out a relatively simple online form and submitting it. You can also send it by mail.
To prepare your Certificate, you usually need the following information:
- Your LLC name.
- The name and address of your registered agent.
- A reason why you formed the LLC. This can be a general statement.
- An effective date of formation - upon filing of the Certificate or a later date
- An LLC's duration or time period over which the LLC will exist. In most cases, LLCs are perpetual, meaning the duration is indefinite. A perpetual LLC can be dissolved voluntarily or involuntarily. If your LLC exists for a purpose that will end at a specified date, you will specify that date here.
- Management structure: Will its members or managers manage the LLC?
- The person forming the LLC is required to sign the Certificate. Also, in Washington the registered agent must also sign.
Once you file your Certificate, the secretary of state will review the filing. If the Certificate is approved, the LLC becomes a legal business entity.
4. Obtain a Washington Business License
All LLC's must obtain a business license registration with the Department of Revenue. In Washington, a company that hires employees or pays state taxes is required to have this license. Apply for the business license registration after filing an LLC Certificate of Formation. Applications are accepted online or in-person. Once you file this successfully, a Unified Business Identifier (UBI) will be issued. This nine-digit number is required to file an LLC's annual report and other documents.
5. Receive a Certificate From the State
You can file your LLC formation documentation online or via mail. For faster results, it is highly recommended you file online. For those who file online, you can also file the required Initial Report too. Approval is usually within 2 -3 days if filed online.
If approved, the Washington Secretary of State will send three LLC documents — 1) a congratulation letter; 2) Certification of Formation; and 3) Certificate of Formation with Initial Report - Fulfilled (This is a confirmation that LLC formally exists after the LLC's formation documents are filed and approved). You will receive these documents by email. A duplicate copy will also be mailed to your LLC's Registered Agent
This documentation will allow the LLC to obtain an Employer Identification Number (EIN), other licenses, and business bank account.
6. Create an Operating Agreement
An operating agreement is a document that outlines the way your LLC will conduct business.
Although Washington state doesn't require it, an operating agreement is an essential component of your business. Having a readily accessible, written operating agreement is helpful for a variety of reasons, including settling disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, the courts make determinations based on state law, not necessarily what is in the best interest of the LLC and its members.
The operating agreement can include, but is not limited to, the following:
- LLC's name and principal address
- Duration of the LLC
- Name and address of the registered agent
- Information about the Certificate of Formation
- Purpose of the business
- Members and their contribution
- The way profits and losses will be divided
- Procedure for admitting new members, as well as outgoing members
- Management of the LLC
- Indemnification and liability clauses
7. File an Initial Report
After you start an LLC in Washington, you are required to file an Initial Report (this is your LLC's first annual report) with the Washington Secretary of State. This report is due within 120 days of formation.
8. Get an Employer Identification Number
The nine-digit Employer Identification Number (EIN) is assigned by the Internal Revenue Service to identify your LLC for taxes. You can obtain your EIN by mail or online through the IRS.
The purpose of an EIN is to assist with the following:
- File and manage taxes at the state and federal level
- Open a business bank account.
- Hire employees.
Registering your LLC gives you a legal foundation to conduct business. Plan to keep your LLC compliant and in active status on the state's website.
In Washington, you're required to file an annual report each year. You must file it by the last day of the month you registered in. You must also make quarterly tax payments. You also need to maintain a registered agent for your business.
A registered LLC also makes it possible for you to do the following:
- Obtain permits or licenses necessary to operate your business, including health department permits, zoning permits, home occupation permits, professional licenses, and more. Some states require a seller's permit to conduct sales.
- Register your business with the state's tax agency.
- Open a business bank account.
- Apply for a business credit card.
- Purchase insurance for your business.
- Protect your name and logo with a trademark.