4 Steps to Forming a Washington LLC Yourself:
Complete the LLC Filing:
The Washington Secretary of State provides a PDF formatted Certificate of Formation you adopt to form an LLC. The act of you approving these statements is technically called adopting a Washington LLC Certificate of Formation. You can do all this the old fashioned way by downloading their PDF from their website, typing into it on your computer, printing it out, and mailing it to them, or the same thing can be accomplished online. It’s easier to use the WA Online Wizard to form your LLC right on the Washington LLC Agency database. Find links to both below.
Meet All Address Requirements:
As you work through that process, you’ll notice something called a “Washington Registered Agent”, which is what we do for a living. You can be your own agent and list your home address on your LLCs public paperwork, but many people don’t want their home address OR their names on these kind of permanent records. Our Washington LLC clients list us as the registered agent, registered office address, and for the principal, mailing, and member and manager addresses to keep their home address off of permanent public records. If you want to be your own registered agent, you simply sign and elect to be your own when you make the filing online or by paper. If you hire a registered agent service like us, we provide the signed consent forms and instructions in your online account.
Obtain a UBI Number:
Wait until you’ve received the LLC Certificate of Formation from the Washington Secretary of State. The certificate will contain a UBI number, which is the number you will use to register with the Department of Revenue in order to receive a Master Business License.
Acquire the Master Business License:
Use the UBI number you received from the Secretary of State. Register for the business license with the Department of Revenue online or via paper application. When the application has been received and filed by the Department of Revenue, they will mail you your Washington LLC Master Business License 7 to 10 days later.
Washington LLC Requirements:
- The LLC must be registered with the Washington Secretary of State Corporations Division. The name must include”Limited Liability Company” or “Limited Liability Co.,” or the abbreviation “LLC” or “L.L.C.” You can do a name search to find a legally distinct name for your LLC.
- Washington LLCs are NOT required to be registered with the Department of Revenue or have a Washington Master Business License to maintain their good standing with the Secretary of State. Most Washington LLCs are Washington State holding companies and do not have business licenses, but if you’re going to operate a business here in WA, you’ll need to get registered with both departments.
- You must have a Washington Registered Agent. You can hire us for $65 a year.
- You must maintain a Washington Registered Office address.
- LLCs have to file initial reports within 120 days. The Washington initial report costs $10. We include filing this when we form Washington LLCs. You will have to disclose at least one member or manager on this report; however, you can list another Washington LLC as the member or manager to keep your personal names off of the Corporations Division database.
- You will have an LLC annual report due each year on the anniversary of your initial filing of the Washington LLC. The Washington LLC annual report costs $71 to file.
Benefits of a Washington LLC:
Washington LLCs are nice because you don’t have the formalities of annual minutes, directors, and officers that a Washington corporation does. You also can use two Washington LLCs managing each other to keep your personal name off of business name search results. Corporations cannot use other entities as the officers or directors.
If you are a sole proprietor, you are crazy not to have an LLC. You are paying the same B & O tax as an LLC with zero personal liability protection. If you would like help converting your current DBA to an LLC, we can help you accomplish this while keeping all your information the same with Labor and Industries.
Washington LLC Protections
Washington LLC’s are governed by chapter 25.15 RCW.
- RCW 25.15.040 eliminates the personal liability of the members and/or managers of the LLC., except regarding intentional misconduct or knowing violation of a law. The state statute also:
- Indemnifies the members and/or managers from judgments, settlements, penalties and fines of the LLC, providing they acted within the law.
- Indemnifies the members or managers from the LLC itself.
- RCW 25.15.235 specifically prohibits members from taking abnormal distributions when they know the LLC cannot meet the LLC’s financial responsibilities because of the distribution. This is called a fraudulent transfer of assets.
- RCW 25.15.060 specifically says that failure to hold corporate formalities such as meetings is not sufficient means to pierce the corporate veil. It does say that the corporate veil can be pierced, but veils get pierced by swapping money around where you shouldn’t, intermingling accounts, and conducting illegal activities and fraudulent transfers. This section protects the common business owner and should ease the fears of the formalities of having an LLC.
- We have no personal income tax in WA. So by default an LLC is taxed at a personal level with the IRS. If your WA LLC makes money, that income comes down to you, and you pay the IRS for the net profits of your WA LLC. There’s no double taxation, and a WA LLC is extremely simple from a tax standpoint.
Washington State Taxes for an LLC:
- Washington LLC’s have the first roughly $40,000 of income tax free. It then gradually fades into the full gross income tax.
- Washington has a gross income tax. Most people fall under the “service and other activity” classification of 1.8% (.018) of your gross income. Manufacturing, wholesaling, and retailing get a lower rate of .5% ( .005)
- There is no personal income tax in Washington State.
- Unless you are providing a professional service, you must collect sales tax on all your sales and repay it to the WA Department of Revenue. This averages from 8.5% up to 11.5%.
Here’s how Washington Business Taxes work in depth.
Where to File a Washington State LLC Yourself:
What to Expect if You Hire Us to Form Your WA LLC:
Anyone can download state provided PDFs or fumble their way through the cumbersome online filing process the state provides for free. You can do this yourself or you can hire one of hundreds of national online LLC formation websites that will pay employees with no special interest in Washington to do the same thing you would do: stumble through an online filing website they do every now and then when they get an order for one Washington LLC to 200 others, or look up a state provided form and work their way through it.
For $100, we do all that extremely fast without any fumbles. We also make initial resolutions, operating agreements, llc membership certificates, and make sure what you want to accomplished is done in the best possible way.
What national companies cannot provide, is our ability to correctly keep your information as private as possible. If you want to, we’ll use our address to keep your information off state records. These records are permanent records. So let’s say your new business takes off, and 10 years from now, your competitors want to figure out more about you. They may find your old apartment or home that might not portray your current image. Or worse, they can follow you through office change after office change and see any instability you’ve fought through to get to the point we hope you’ll be at. We can help you show consistency by having one consistent address on public records. National websites selling Washington LLC filing services can’t offer this, because they aren’t here. We are. We want you to succeed and look great while doing it.
You can place an order and you’ll get an online account with us. We process your new WA LLC the same day. We will form your WA LLC as fast as logistically possible. We’ll form it right the first time. We look over your order for errors, and will call you to clarify anything we see as a problem.