How to Form an LLC in Washington

Last Updated on

Washington LLC Quick Facts

Washington LLC Costs

Initial LLC Filing Fee:

 

  • Filing by Mail – $180
  • Filing Online – $200

 

Recurring State Fee: Annual Report – $60

LLC Processing Time

  • By Mail: 2 weeks
  • Online: 2-3 business days

 

Expedited filing is available for an additional fee.

Don’t want to form an LLC by yourself?

Let IncFile or IncAuthority guide you through the LLC formation process, so you know everything was done right. Only pay state fees!

Quick Reference

The Limited Liability Company (LLC) is a popular entity structure for many businesses starting in Washington.  The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Washington without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Cost to Form a Washington LLC

To form a Limited Liability Company in Washington, file the Certificate of Formation with the Washington Secretary of State.  The LLC filing fee is $180 by mail and $200 online.

Approval for the LLC is typically around two weeks when filing by mail and 2-3 business days when filing online.

Guide to Forming an LLC in Washington

The steps for filing online or by mail are largely the same.  The screenshots show how to file online.

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

Step 1: Create an Account

Begin by creating a new user account on the Washington Secretary of State’s website. If you prefer to fill out and mail the application, download the Certificate of Formation Form.

How to Form an LLC in Washington

After verifying your email address, log in to your account and select “Create or Register a Business” in the left menu.

Next, assuming you are forming your first LLC for a business that will be located in Washington State, select “I would like to form a Washington State business.”

A new selection will appear where you can select the business type “WA Limited Liability Company.”

Create a Business in Washington State

Step 2: Defer Initial Report

Every LLC is required to file an Annual Report, and the first one is named the Initial Report.  The Initial Report is due within 120 days of the LLC being approved.

The Secretary of State’s office provides an option to delay the filing for up to 120 days; however, you are best served to file it along with the Certificate of Formation.  Choosing to delay the Initial Report, there will be an additional $30 filing fee.

Step 3: UBI Number

UBI stands for “Unified Business Identifier” and is a unique identification number for entities in the state of Washington.  Most filers wouldn’t have filed for this number already and would choose “No.”

Step 4: Select a Business Name

The first question is whether you already have a name reserved.  If so, you can select “Yes” and include the business name registration number.  Otherwise, click “No.”  You do not have to reserve a name before forming the LLC.

Enter the name you want for the LLC.  The name of the LLC has to differ from other entity names registered with the Secretary of State.  You can also check on available LLC names in Washington before going through the filing process to ensure the one you want is available.

The LLC’s name must also include a designator at the end of the business name and describes what type of business entity it is. Only the following words or abbreviations can be used as a designator:

  • Limited Liability Company
  • Limited Liability
  • L.L.C.
  • LLC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Enter the name along with the designator you would like to use in the “Submit a name for review” field and then click on “Look Up.”  A list of names will be displayed.  If the name you want is open, a message will appear that says it is your name available.

If the name you want to use is not available, a message will show up as “Not Available.”

Before settling on a name, you may want to do a domain name search to match your business name and website address.

If there is a name you want, but are not ready to register the LLC, you can file the Name Reservation Form. The name reservation will hold a name for up to 180 days, at the cost of $30.

If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a trade name (sometimes referred to as a fictitious business name, assumed name, DBA, or Doing Business As name).  Registration of the Trade Name will cost $5 for each name and can be applied at the same time as the Business License Application (see more below).

Register a Name for Washington LLC

Step 5: Registered Agent

A Registered Agent in Washington must be identified before forming an LLC.  The Registered Agent can either be a resident of Washington (Non-Commercial Registered Agent) or a Registered Agent Service (Commercial Registered Agent).  The agent must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The registered agent must also provide consent that they are the agent for this LLC.  If you are the Registered Agent, select the button stating “I am the Registered Agent”  Your contact information will prefill the Registered Agent contact information.  If another party is the Registered Agent, select “I am not the Registered Agent”  Be sure to have a signed consent form on file should the Secretary of State request it.

You are not required to pay for a registered agent. Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or are still employed and don’t want their employer to find out.  Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce unwanted phone calls and mailings.

Washington LLC Registered Agent

Regardless of whether the Registered Agent is an individual or entity, be sure to fill out the name, email, street address, and mailing address.

WA Registered Agent Address

Step 6: Certificate of Formation

If you have already filled out the Certificate of Formation, it can be uploaded.  Most filers have not and will select “No” and continue filling out the fields to complete it.

Step 7: Other Provisions

Most filers will skip this section unless they have additional rules for the operation of the LLC.

Step 8: Principal Office

Street Address – In this section, enter the phone number and an email for the principal office.  This does not have to be an official business email.   Next, enter the street address, city, state, and zip code of the initial principal office.  This address can be the LLC’s physical address, or it can be the address where the business records are stored.  You may not use a PO Box for the designated office.

Address Confidentiality Program – If you are a part of the Washington Address Confidentiality Program, you can check this box.

Mailing Address – If the mailing address and street address are the same, click on the “Same as Street Address” box.  If mail should go to a different address than the street address, enter that address here.

Principal Office Washington LLC

Step 9: Duration

In this section, you can indicate how long the LLC will remain in existence.  Most LLCs will choose a Perpetual duration; however, some businesses (usually investment-related) will have a specific closure date.

WA LLC Duration

Step 10: Effective Date

If you want the LLC to start as soon as possible, “Date of Filing.”  If you want the LLC to start later, enter a date less than 90 days in the future.  The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year, and the business isn’t going to have any activity until the start of the year.  By delaying until the following year, they will reduce the number of end-of-year filings.

Washington LLC Effective Date

Step 11: Executor

An LLC Executor (known as an Organizer in most states) is someone involved with the formation of the Certificate of Formation.  The Executor may or may not become a member, such as a mentor, attorney, or accountant, but any of the initial members can be listed as an executor.  At least one person must be listed as an Executor.

If you are the Executor, check the box that says “I am an Executor,” which will auto-fill the name and address information.  If, not enter that information in the following fields.

Washington LLC Executor

Step 12: Governors

Governors refer to how the LLC is managed.  Governors are LC Members or Managers and are typically going to be individuals.

At least one governor needs to be listed.  Some filers will want to leave out most of the governors to protect their privacy.  The downside is that it may be difficult to obtain signing authority from the bank for any governors that are not listed.

WA LLC Governor

Step 13: Nature of the Business

Here you are asked to provide some basic information about what the business does.  Open the drop-down menu to look at the basic categories.  If your business isn’t listed in any category, you can provide your own information in the box.

If you want to keep the business purpose more open-ended or not disclose what your business does, you can select  “Any Lawful Purpose” from the drop-down menu.

Washington LLC Business Purpose

Step 14: Return Address for This Filing

Enter an email and mailing address for the Secretary of State to send the Certificate of Organization

Step 15: Upload Additional Documents

If you have additional documents to upload, select “Yes,” otherwise select “No,” and continue.

Step 16: Email Opt-In

If you wish to receive all notifications from the Secretary of State for the LLC, like Annual Report reminders, check the box.

Step 17: Authorized Person

A person who is authorized to sign on behalf of the LLC must acknowledge they are an authorized person, and they agree that the information included in the Certificate of Formation is correct.

Step 18: Review

Review that all the information is correct.  If there are no corrections, click “Add to Cart.”

Step 19: Pay and File

Pay and file the Certificate of Formation.

When filing online, assuming there are no errors, the LLC will be approved in approximately 2-3 days.

If mailing, expect the filing to take up to 2 weeks.  Mail the form and payment to the following address:
Secretary of State
Corporation Division
801 Capitol Way S,
PO Box 40234
Olympia, WA 98504

You don't have to form your LLC by yourself or pay an attorney!

Forming an LLC is a little intimidating, especially when it’s your first time. Professional entity formation services help guide you to make sure it’s done right. Check out our reviews of popular LLC formation services to learn more.
  • Free plan offers a lot of value (state filing fees still apply)
  • Lifetime customer support
  • Free registered agent in the first year
  • Free 1-hour tax consultation
best value
  • Free plan offers a lot of value (state filing fees still apply)
  • Lifetime customer support
  • Free registered agent in the first year
  • Proactive customer service called to discuss next steps
best value
  • No free plan, but pricing is fair and upfront
  • Lifetime customer support
  • Free registered agent in the first year
  • Free business name availability check
easiest

Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Washington operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number, FEIN or Federal Tax Identification Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number (SSN) for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Occasionally, the bank will request a Washington Certificate of Good Standing to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

In addition to forming the LLC, there will likely be various business licenses and permits needed before starting the business. Some common registrations include:

  • Business License Application – All LLCs in Washington will need to apply for a state business license. This registration will quickly get a business set up with the Department of Revenue, Department of Labor & Industries and the Employment Security Department, and any Specialty Endorsements and/or City Endorsements.  The fee for the Business License Application is $19.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Sales Tax Registration – In order to sell products and certain services and collect sales tax, registration with the Washington Department of Revenue will be necessary.
  • Business and Occupation Tax (B&O Tax) – Even though Washington has no income tax, it does assess a tax on business income. All businesses generating over $12,000 in sales annually will pay this tax.

Related: What Business Licenses are Needed in Washington?

Get Business Insurance

Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:

  • General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
  • Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
  • Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
  • Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.

Related: 7 Types of Insurance Your Business May Need

File Annual Reports

LLCs are required to file an annual report with the Washington Secretary of State.  The annual report updates ownership information and other details.

Related: How to File a Washington LLC Annual Report