Starting a limited liability corporation (LLC) in Washington state can seem complex at first. It involves some steps that aren't mandated in every state, such as obtaining a business license.
On the other hand, forming an LLC is worth the trouble for many business owners. An LLC helps you cut back on paperwork, limits your personal liability for business debts, and grants you some tax advantages.
I’m familiar with the process of starting a Washington state LLC, so I've created this detailed guide with six easy steps to create your new business entity..
6 Steps to Start an LLC in Washington State
You can create your new Washington LLC with just a few key steps.
1. Choose Your LLC’s Name
First, you'll need to name your LLC. Your business name can’t be in use by another Washington business. You can check whether your chosen name is available by searching on the Secretary of State’s website.
You also need to comply with these state naming guidelines:
- Referencing the LLC structure by including "Limited Liability Company" or an abbreviation.
- Completing additional documents to use a business name that reflects a restricted sector, such as legal services, banking, or healthcare.
- Avoiding words that may cause confusion with government agencies, such as State Department, FBI, Treasury, etc.
Once you’ve chosen an available name that’s available and aligns with the Washington naming requirements for LLCs, consider buying the domain name. Even if your business is primarily offline, it’s smart to maintain a website with a similar name.
2. Appoint a Registered Agent
Washington state requires LLCs to appoint a registered agent. This person or entity has official authorization to receive legal correspondence, tax forms, and notices on behalf of the LLC.
The registered agent can be an individual (including yourself or a member of your LLC) or a company that offers this service. Registered agents must have an address within Washington and be available to accept documents and correspondence during regular business hours.
3. Prepare and File a Certificate of Formation
To register your Washington LLC, you’ll need to file a Certificate of Formation with the Washington State Corporate Commission either online or by mail.
The Certificate of Formation requires you to submit the following information:
- The name of your LLC
- The name and address of your registered agent
- The LLC’s effective start date
- The management structure of your LLC
- Your LLC’s duration – most LLCs exist indefinitely, but you have the option to make it legally terminate on a specified date
- The signatures of your registered agent and the person forming the LLC
When the Secretary of State approves the Certificate of Formation, your LLC will become an official legal entity, effective from the start date specified in your application.
4. Obtain a Washington Business License
Before your LLC starts operating in Washington, you’ll need a business license from the Department of Revenue. You can apply either online or in person after filing your Certificate of Formation documents.
Once your application is successful (typically after around ten business days) you’ll be issued a Unified Business Identifier (UBI). You need this nine-digit number to file your LLC’s annual reports and other official documents.
5. Write an Operating Agreement
Your operating agreement is a document that establishes how your LLC will do business. It contains basic information about your business, its structure, and its management. It also helps members preserve limited liability by providing further proof of the LLC as a separate legal entity.
Washington state doesn't mandate an operating agreement for LLCs, but having this document can help the LLC settle any potential legal disputes you may encounter in the future. Otherwise, the Washington state court system will decide how to proceed based on state law rather than considering the best interest of your LLC and its members.
6. File an Initial Report and Receive Certification
Washington State requires new LLCs to file an Initial Report with the Secretary of State within 120 days of formation. Filing your Initial Report involves a $10 fee, or $60 if you choose to expedite the process. You'll also file an Annual Report for the LLC in each subsequent year.
If you file your Certificate of Formation documents online with the Secretary of State, you can also file your Initial Report online. Approval typically takes 2-3 days when filed online.
Once approved, you and your registered agent will receive two certificates by email: a Certificate of Formation and a Certificate of Formation with Initial Report - Fulfilled. These certificates will allow your LLC to obtain an Employer Identification Number (EIN), business bank account, and business loans.
The Next Steps After Forming an LLC in Washington State
After you’ve officially set up your LLC, consider taking these steps to help protect and optimize your business.
1. Obtain an Employer Identification Number (EIN)
If you plan on having more than one employee in your LLC, you need to apply for an Employer Identification Number. You can submit an online or direct mail application for one with the IRS for free.
You can skip this step if you’re running a one-member LLC, but you probably shouldn’t. Having an EIN helps keep your personal finances separate from your business finances. You can also use this number when you hire employees, open a bank account for your LLC, build up credit, and file taxes as a company.
2. Set Up Your Payment System
Before your Washington-based business can truly hit the ground running, you need a solid payment system. Pay.com is a reliable way for your business to receive payments from clients, including credit cards, debit cards, digital wallets, and many more payment methods.
Setting up your account is a straightforward process – our user-friendly interface makes it simple regardless of your technical experience. We also have an advanced developer API so you can seamlessly integrate Pay.com into your website for complete customization.
The Pay Dashboard offers an easy way to oversee all transactions in a single place. You can analyze your revenue for any period, create custom analysis reports, and examine customer data.
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3. Purchase Insurance for Your LLC
Insurance protects your LLC from unforeseen bills or accidents that you otherwise may be unable to cover, such as lawsuits or employee injuries. Since your LLC provides personal liability, the business entity holds the financial responsibility in these cases. Insurance will protect your company's assets.
The type of business you run, the number of people you employ, and other factors determine the right types of small business insurance for your LLC, including health insurance, commercial property insurance and workers' compensation. Most companies benefit from general liability insurance.
The Bottom Line
Setting up an LLC in Washington takes a few steps, but it’s fairly straightforward once you know what to do. You can streamline the process and avoid unwanted detours by following our six simple steps.
To accept credit cards, mobile wallets, and other payment methods, you can sign up with Pay.com. You'll have the personalized, secure payment platform your customers expect, emphasizing your role as a trustworthy brand. You're free to focus on optimizing other aspects of your business – we'll take care of the payments.