How to File an LLC in Washington

Before you begin doing business in Washington, you must go through a filing process to establish a business entity. Your business structure determines how you can run and protect your business. A hybrid business structure like a Washington LLC might be your best bet. This article details starting and structuring an LLC in a few simple steps.

Key Takeaways

• Starting a Washington LLC is arguably the best decision for a prospective small business owner looking to combine the freedom and flexibility of a sole proprietorship with the liability protection aspects of an S corp or C corp business structure. 

• Washington state law requires that LLC owners submit an initial report alongside their business formation documents, specifically their Certificate of Formation. Note that there is a 120-day grace period during which you can submit this report, though doing so will cost you an additional $10 in fees.

• Washington allows LLC owners to act as their own registered agents, but this can lead to several issues with privacy, workload, etc. Leveraging a registered agent service is often the better option.

What Is LLC Formation?

A limited liability company (LLC) is often the best choice for entrepreneurs. It’s a flexible solution that simplifies management roles and minimizes liability. It has shared elements of limited liability partnerships, corporations, and sole proprietorships.

An LLC owner filing with the Washington Secretary of State can have complete autonomy over their business entity. They can create the management structure and decide how to run the business, without worrying about many state regulations. That’s substantially different to what a corporation owner many have to face.

An LLC formation also offers superior liability protection for personal assets. Creditors and plaintiffs in business-related disputes often can’t go after personal assets. Granted, exceptional circumstances may arise that expose some personal assets.

LLC formation has relatively few legal guidelines to follow:

• Must pay a sales tax if they’re leasing and selling tangible products and services

• Must submit an LLC annual report

• Must submit an LLC initial report

• Owners must pay the associated state fees when filing LLC formation documents

• Must elect and retain a registered agent to process their legal documents and correspondence

• Business name must contain the words “limited liability company,” “LLC,” or another accepted abbreviation

These regulations are relaxed compared to what corporations deal with in Washington. And the added liability protection more than makes up for following a few state laws.

Who Should Form an LLC in Washington?

Many entrepreneurs may wonder if forming an LLC in Washington is necessary. Although not all situations call for it, there are plenty of scenarios where an LLC is the best option. For instance, liability protection against legal recourse is beneficial if you have many personal assets.

Furthermore, small business owners should consider forming an LLC instead of a corporation. Corporations come with share distribution issues and must adhere to more complex regulations. LLCs, especially with an LLC operating agreement, grant almost complete autonomy to the owner.

Likewise, an LLC is safer in the long run. This business entity doesn’t need to distribute shares. Hence, hostile takeovers are less likely. As a bonus, owners and LLC members can decide who can invest in the company.

Step-By-Step Guide To Starting Your Washington LLC

Filing your Washington LLC differs from filing for an LLC in Alaska, Texas, and most other states. Each state has its own state filing fees and formation documents. In addition, each state could have unique requests from small business owners. But the following five-step process will make it easier to form an LLC, should you want to do it without third-party assistance.

Step 1: Choose a Business Name for Your LLC

Choosing a business name for your company isn’t a straightforward process. It can take a long time to develop an LLC name that fits your business and brand and is available.

Remember that your name must appeal to your target audience and customers. It must also look good on any marketing materials you intend to distribute. Furthermore, it can’t be the same or too similar to another company’s name operating in Washington.

When selecting your LLC name, you must take your time and do your due diligence. Rushing the process increases the risk of infringing on other companies’ trademarks. Therefore, consider using the following four-stage approach to naming your business.

Stage 1 — Find an Available Name

A few common sense rules to naming an LLC apply to most U.S. states. Here’s what you should keep in mind when starting an LLC in Washington:

• Use terms like “limited liability company,” “limited company,” “LLC,” “limited liability co,” and other approved abbreviations in the business name

• Don’t use a name that’s hard to differentiate or the same as one used by a licensed Washington business

• Avoid referencing services, products, and areas of expertise you can’t or won’t cover

With these restrictions in mind, you can begin running a business name search in the entire Washington area. The Secretary of State Corporations & Charities online database can be used to determine an LLC name’s availability.[1]

But note that the database doesn’t contain assumed names, trade names, or “doing business as” (DBA) names. To determine the availability of those names, you should run a standard internet search.

Stage 2 — Find and Buy a Domain Name

Speaking of internet research, you must find a good domain name after settling on your LLC name. Every business needs a solid online presence to reach customers, present its services and products, and make it easy to research the brand.

But before you can build a website, you need a domain name relevant to your business. Therefore, you must search the web for suitable domain names derived from your LLC name. If you want, you can take one of two approaches:

• Type domain names in a browser to find out if companies with those names pop up

• Use a domain registrar database to identify available names derived from your LLC name

Using a registrar is recommended in most cases. That’s because once you find a name you like you can quickly buy it to ensure no one else can take it.

Stage 3 — Reserve the LLC Name

Just because you have an available LLC name in mind doesn’t mean you’re ready to file the formation documents with the Washington Secretary of State. Someone else might take your LLC name if they file before you.

To avoid this, you must reserve your LLC name. File the business Name Reservation form with the Office of the Secretary of State Corporations & Charities Division. It costs $30 in filing fees and $80 for expedited service.

You can send the complete form to the following address:

Secretary of State Corporation Division

801 Capitol Way S

PO Box 40234

Olympia WA 98504-0234

Stage 4 — Register Trademarks

Trademarking your business name or any marks associated with your brand isn’t mandatory. However, registered trademarks provide substantial legal protection against unauthorized use of your brand.

You can still proceed with forming an LLC without registering trademarks. But since the process is easy enough in Washington, there’s no point in not doing it. The legal document you receive can be used in many legal disputes.[2]

Use this trademark registration form to protect multiple classifications in the Washington State area. Each classification costs $55, and an additional $50 fee for expedited filing. You can use the following mailing address:

Secretary of State Corporation Division

801 Capitol Way S

PO Box 40234

Olympia WA 98504-0234

Alternatively, you may file the paperwork yourself at:

Secretary of State Corporation Division

801 Capitol Way S

Olympia WA 98501-1226

Step 2: Fill Out Washington Certificate of Formation

Most states require entrepreneurs to file Articles of Organization when forming an LLC. However, once your business name is reserved, you must file a Certificate of Formation application.

Although the document’s name is different in Washington, the idea is the same. A domestic LLC and a foreign LLC must file different documents and fill out specific information about the business, structure, etc.[3]

Use the following addresses to submit your paperwork:

Secretary of State Corporation Division

801 Capitol Way S

PO Box 40234

Olympia, WA 98504-0234

Alternatively, you may file the paperwork yourself at:

Secretary of State Corporation Division

801 Capitol Way S

Olympia, WA 98501-1226

Form a Domestic LLC

A domestic LLC filing requires the Certificate of Formation of a Limited Liability Company RCW23.96 and 25.15. It costs $180 in filing fees or $230 for the expedited service.

It’s important to note that the Washington Secretary of State requires including the company’s initial report. However, you may submit it separately within 120 days if you don’t mind paying another $10 in state fees.

Here is some of the information requested in the Certificate of Formation:

• UBI number

• Reserved business name and reservation number

• Period of duration

• Registered agent information

• Registered agent street address and mailing address

• Registered agent’s consent and signature

• Principal office information

• A return address for the filing

Form a Foreign LLC

The LLC formation process for a foreign LLC in Washington is slightly different. Owners must file the Foreign Registration Statement RCW 23.95 application with the Secretary of State.

Both for-profit and nonprofit foreign LLCs use the same form. However, for-profit entities pay $180 in filing fees, and nonprofit entities pay $30 in state filing fees.

Here is the typical information requested:

• Requalification information

• UBI number

• Business name

• DBA name

• Jurisdiction information for the original country or state

• Type of business

• Registered agent information

• Principal office information

• Date of formation in the home jurisdiction

• Nature of the business

Form a Professional LLC

Professional LLCs or business entities that offer specific services must file the Certificate of Formation of a Professional Limited Liability Company RCW 23.95 and 25.15.046 application. It costs $180 in filing fees and an extra $50 for expedited service.

You can also include the Initial Report with the filing to avoid paying another $10 in filing fees.

The form asks for typical information:

• UBI number

• Entity name

• Whether it provides dental services

• Period of duration

• Effective date

• Registered agent name and contact information

• Principal office information

Form an LLC Online

Filing your LLC Certificate of Formation paperwork online with the Washington Secretary of State entitles you to expedited service. This process takes up to two business days and costs $200 in filing fees for all LLC types.

Step 3: Hire a Washington Registered Agent

Under Washington law, you can’t form and operate an LLC without a consenting registered agent or registered agent service provider. Every new business owner should know this when starting a company or expanding operations in Washington.

Registered agents have the following duties:

• Use a real mailing address as their registered office

• Receive and process legal documents and correspondence like service of process for their clients

• Stay open five days per week and keep regular business hours

A Washington LLC business owner may name themselves the registered agent in the Certificate of Formation paperwork. However, that’s not always a good idea..

Why You May Want a Registered Agent Service for Your Washington LLC

Being your own registered agent can seem like a solid financial decision. However, small business owners and all other entrepreneurs can benefit from a registered agent service.

These are just a few of the benefits:

• You don’t have to make your mailing address public

• Your sensitive documents don’t arrive during inopportune times, like client meetings

• You have more time to focus on business-specific tasks instead of focusing on paperwork

• Your Washington LLC is more likely to stay compliant and in good standing with the state

• You’re able to hold irregular business hours and have a flexible schedule

• You save money by not needing to rent or own physical office space in Washington

• You have professional help when it comes time to file an initial and annual report

Swyft Filings offers registered agent services in Washington and can help domestic and foreign LLCs comply with the law. The professional service has a base cost of 1$99 per year. It ensures complete privacy and peace of mind for busy LLC owners.

Step 4: Create an LLC Operating Agreement

Despite not being a mandatory document, an LLC operating agreement is a crucial contract for all LLCs. Formalizing this contract with the Secretary of State can protect and empower your LLC business structure and offer many benefits.

For example, an LLC operating agreement helps define all LLC members’ duties, roles, and responsibilities. It can outline your business entity's management structure, ownership percentages, and other relevant aspects.

Moreover, a well-drafted LLC operating agreement can provide extra liability protection for LLC members. That’s necessary to keep creditors at bay when settling debts. And the operating agreement is a legal document that applies to single-member LLCs and multi-member LLCs.

Here are some clauses you can add to your LLC operating agreement:

• Each member’s ownership percentage of the business entity

• Voting rights for all types of members

• Core responsibilities, roles, and duties of the LLC members

• The exit strategy guidelines for buyouts

• Rules and conditions for ownership stake transfers

• Profit and loss distribution scheme for the LLC members

• Additional perks or powers for certain members

• Outline the member-managed or manager-managed structure

There’s another reason to consider formalizing an LLC operating agreement. The document can help companies govern themselves with almost complete autonomy. The LLC may need to follow additional Washington business rules without internal guidelines. That can result in an unwanted ownership structure and internal disputes between members.

Step 5: File for an Employer Identification Number and Business License

Every LLC with multiple members will need an Employer Identification Number or EIN. This is a nationwide requirement by the Internal Revenue Service (IRS). The IRS uses the EIN to analyze and examine the following:

• Federal taxes

• General tax returns

• Income taxes

• State taxes

But companies need an EIN for other reasons. Firstly, they need it to collect employment taxes. Secondly, most financial institutions ask for an EIN when opening a business bank account or granting a business credit card.

Therefore, mailing or faxing Form SS-4 on the IRS website is crucial. Online filing works even faster. And you don’t have to worry about more fees since requesting your EIN or business Social Security number is free.[4]

You can get your EIN after applying online, via mail, or by fax. The following contact information is available for any company or individual from all 50 states and the District of Columbia:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: 855-641-6935

International applicants may use the following address and fax number:

Internal Revenue Service

Attn: EIN International Operation

Cincinnati, OH 45999

Fax: 304-707-9471

Get Your Business License

Washington has many business license requirements for LLCs, corporations, and other business structures. Your LLC may need additional county or local business licenses in addition to a state-wide license.

You must check for license requirements based on your business and its location. You can do that online using the Washington State Department of Revenue Business Licensing Wizard.

The State Department of Licensing website also contains valuable information on navigating the unique requirements in Washington.

Here are common scenarios that require additional licenses:

• Your LLC sells tangible products and services

• Your LLC operates in the food industry

• Your LLC provides dental services

• Your LLC operates in the tobacco industry

• Your LLC distributes or sells liquor

Always find the business license application that fits your business type. The Washington Department of Revenue can help with that online, in-person, or via phone.

Let Us Handle Your LLC Paperwork

Entrepreneurs need plenty of help to start running a small business in Washington. But with so much on their plate, even a straightforward business formation process can be overwhelming. Therefore, it’s worth looking for an alternative.

Swyft Filings can provide a personalized professional service to streamline your LLC formation process and help you maintain your good standing. Our LLC formation team has served over 250,000 clients with their business formation nationwide.

If your Washington LLC needs assistance in the long run or the inception stage, Swyft Filings can help.

Contact the Swyft Filings LLC formation team, give us some details about your business, and let’s find the best way to file your paperwork.

FAQs

How much does it cost to set up an LLC in Washington?

The cost varies, depending on your LLC type and the filing method. All online filings cost $200 for the expedited service. Other filings cost $180, and nonprofit LLCs only pay $30 in state fees. However, you may also want to factor in registered agent expenses, buying the domain name, reserving your LLC name, trademark registrations, etc.

How is an LLC taxed in Washington?

Washington LLCs are pass-through tax entities by default. Therefore, the company doesn’t pay corporate tax. Its members are taxed instead. However, LLC owners can choose the S Corp taxation structure.

What are the benefits of a Washington LLC?

Having a Washington LLC gives owners and other members more liability protection for personal assets. Likewise, drafting an LLC operating agreement allows owners to create unique management structures and run the business as they want. The alternative would involve adhering to many more state-mandated regulations.

How do you dissolve an LLC in Washington?

Dissolving an LLC requires submitting the Revenue Clearance Certificate Application and the Articles of Dissolution.[5] Note that domestic and foreign LLCs have slightly different forms. However, unlike filing formation documents, filing dissolution paperwork is free.

Bibliography

1. Washington Secretary of State. “Corporations & Charities Filing System (CCFS). ” Accessed February 10, 2023.

2. Washington Secretary of State. “Corporations & Charities – Additional Services – Trademarks.” Accessed February 10, 2023.

3. Washington Secretary of State. “Corporations & Charities - Limited Liability Companies (LLC) Online and Paper Registrations.” Accessed February 10, 2023.

4. Internal Revenue Service. “How to Apply for an EIN.” Accessed February 10, 2023.

5. Washington Secretary of State. “Articles of Dissolution.” Accessed February 10, 2023.