How to Start an LLC in Washington State
Starting a Washington LLC is a fast and simple process. To form an LLC in Washington, you have two choices: hire a business formation service like us, or do it yourself.
If you hire us to form your LLC, you’ll be done in minutes, as soon as you complete our signup form. If you form the Washington LLC yourself, you’ll need to follow the steps below:
4 Steps to Forming a Washington LLC:
Complete the LLC Certificate of Formation:
A Washington Certificate of Formation is the document you file with the secretary of state to form your Washington LLC. The act of you approving the statements on Certificate of Formation is technically called adopting a Washington LLC Certificate of Formation. The Washington Secretary of State provides a PDF formatted Certificate of Formation you can use, or you can file online on the secretary of state’s website. It’s easier to use the WA Online Wizard to form your LLC right on the Washington LLC Agency database, or you can do 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. You’ll find links to both below. No matter which way you choose to file, you’ll need to include the following Washington LLC information requirements:
- Name of Limited Liability Company (LLC)
Washington requires all LLCs to have a unique name. If you adopt the Certificate of Formation online, you’ll automatically be able to search for an available business name. If you use the paper filing, you’ll need to do a business name search first to find a name available to your Washington LLC.
- Address of Principal Place of Business
This address is not the same as a mailing address; it’s the address where the business will be operating. For added privacy, if you hire Washington Registered Agent, LLC, we allow you to use our address in this space to keep your address off public documents to help avoid junk mail and solicitors.
- Effective Date of Formation
You can choose the date when you want your LLC to be formed, if later than the date on which the filing is processed by the Washington Secretary of State.
If your LLC will only be active for a set amount of time, you can indicate the day it will become inactive. Most LLCs, however, exist perpetually.
- LLC Management Structure
Choose whether the LLC will be managed by the members (the owners) or by a manager.
- Washington Registered Agent
A Washington LLC’s registered agent must be an individual or company located in Washington and can reliably accept official mail and service of process should the LLC be sued.
- Executor Information
Name, address, and signature of the executor (person authorized to complete the filing on the LLC’s behalf).
- Name of Limited Liability Company (LLC)
Meet All Washington Address Requirements:
As you work through the process of completing the LLC Certificate of Formation, 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 LLC’s public paperwork, but many people don’t want their home address OR their names on these kinds 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 file 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 Unified Business Identifier (UBI) Number:
Once you’ve completed and submitted the filing, you’ll need to wait until you’ve received the LLC Certificate of Formation back from the Washington Secretary of State. The certificate will contain a United Business Identifier (UBI) number, which is the number you will use to register with the Department of Revenue in order to receive a Master Business License. The Washington UBI number will also be used to file annual reports and file other forms with the state.
Acquire the Master Business License:
Use the UBI number you received from the Secretary of State to obtain the Washington Master Business License. Register for the business license with the Department of Revenue online or via a 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 sign up for our registered agent service 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 as part of our Washington LLC formation package. 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 name 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 LLCs 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 LLCs 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 1.5% (.015) 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 among 200 others, or look up a state provided form and work their way through it.
For $365 total, we do all that extremely fast without any fumbles. We also create initial resolutions, operating agreements, LLC membership certificates, and make sure what you want to accomplish is done in the best possible way. This total also includes a full year of our registered agent service.
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 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.