Here is an outline of the steps you need to follow in order to form an LLC in Washington. You should also read the general section on forming an LLC for information that is applicable in any state. Additionally, you should familiarize yourself with the Washington Secretary of State's website and the Department of Licensing website, which have useful information and resources.
1. Choose a business name for the LLC and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
- Washington law requires that an LLC name contain the words "Limited Liability Company," the words "Limited Liability" and abbreviation "Co.," or the abbreviation "L.L.C." or "LLC." Additionally, your business name must be distinguishable from other names on file with the Secretary of State (limited exceptions apply), and may not contain the words or phrases "Bank," "banking," "banker," "trust," "cooperative," "partnership," "corporation," "incorporated," or the abbreviations "corp.," "ltd.," or "inc.," or "LP," "L.P.," "LLP," "L.L.P.," or any combination of the words "industrial" and "loan," or any combination of any two or more of the words "building," "savings," "loan," "home," "association," and "society."
- Consult Access Washington for information on how to check the availability of your desired business name in Washington.
- Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
2. Prepare and file a certificate of formation with the Secretary of State.
- The filing fee is $180. The Secretary of State's website has a simple, fill-in-the-blank form for the certificate of formation. If you would like to file online, you can do so using the Secretary of State's Online Application Forms page. There is a $50 expedited processing fee and a $20 fee for online filing.
- The default rule in Washington is that an LLC is managed by all its members. If you want the LLC to be managed by on or more managers instead, then you should indicate that in your certificate of formation by checking "Yes" in the box which asks "MANAGEMENT OF LLC IS VESTED IN ONE OR MORE MANAGERS." For general information on the certificate of formation (usually called "articles of organization"), see the Articles of Organization page.
3. Negotiate and execute an operating agreement.
- Washington does not require an operating agreement in order to form an LLC, but executing one is highly advisable. There is no set criteria for the content of an operating agreement, but it typically includes topics such as how meetings are conducted, how the company will be managed, what capital contributions are required from each member, and how profits and losses will be allocated. The operating agreement does not need to be filed with the state. Please see the Operating Agreement page for details.
4. File a Business License Application with the Washington Department of Licensing.
- Washington uses a single form for many of the steps needed to start a business. This form is called the Business License Application.
- Before filing out the Business License Application, get the Business Licensing Guide so that you will fill out the application correctly.
- You can file the Business License Application by printing out the form and mailing it, applying online, or by visiting a business licensing office in person. The filing fee is $20, which is a processing fee of $15, plus $5 to register a trade name. If you filed formation papers with the Secretary of State, write the Unified Business Identifier (UBI) number that was given to you on your Business License Application.
- When you file the Business License Application, you will receive a state business license and a Unified Business Identifier (UBI) number (if you did not already receive one from the Secretary of State's office).
- The Business License Application lets you register a "trade name" for your business, which you need to do if you want to operate your business under a name other than that listed in the certificate of formation.
- The Business License Application also lets you create a state employment account, which you need to do if you will have an employee or employees in Washington. You should not set up an employment account unless you plan to employ someone in the next 90 days.
5. File an Initial Annual Report with the Secretary of State.
- You need to file an Initial Annual Report within 120 days of filing the certificate of formation. The filing fee is $10. If you file the certificate of formation by mail, you will receive the Initial Annual Report form by mail from the state. If you file the certificate online, you file the Initial Annual Report through the Online Application Forms page.
6. Determine what tax and other regulatory obligations the LLC has, and take care of any necessary registrations.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- If you have an employee or employees in Washington, you need to set up a state employment account using the Business License Application (discussed above).
- Whenever you hire an employee in Washington, you must inform both the IRS and the State of Washington. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information about reporting new hires at the Washington New Hire Reporting website.
- If you have an employee or employees in Washington, you need to carry workers' compensation insurance. The Washington State Department of Labor & Industry administers the program. Its website has a useful Intro to L&I's Workers' Comp Insurance page.
- As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
- Washington LLCs must complete the state excise tax return, generally on a monthly or quarterly basis, and pay the business and occupation (B&O) tax. B&O taxes are assessed on gross revenue, regardless of whether the company makes a profit. Generally, if a business has gross revenue of less than $7,000 in a quarter, it will not have to pay B&O taxes that quarter, but it must still complete the excise tax return. The B&O tax rate is determined by type of business activity, with rates between 0.1 percent and 2.0 percent of gross revenue (most services are 1.5%). For more information, contact the Washington Department of Revenue at 1-800-647-7706.
7. Open a bank account for your business.
- It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN), a copy of the certificate of formation, and a resolution identifying authorized signers if those names are not listed in the certificate. Here is one example of the documentation that banks ask for.
- Washington LLCs must file an annual report and license renewal with the Washington Department of Licensing every year after formation. The filing fee is $69, and you can file the report and renewal online.
- Washington requires certain documents to be kept at an LLC's principal place of business. A list of the required documents is located in Wash. Rev. Code § 25.15.135.