If you own a business that was created in a state other than Washington, you will need to qualify or register that business in Washington if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Washington) limited liability company (LLC) to do business in Washington.
Note: Unlike other states, Washington’s LLC Act does not itself contain rules specifically for registering foreign LLCs. Instead, the Act points to a separate set of laws that cover registration of foreign businesses generally. Washington law refers to these businesses collectively as “foreign entities.”
For Washington purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Washington. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Indiana is a foreign LLC in Illinois.
According to Washington foreign entities laws, you are required to register your foreign LLC with the state of Washington if you are “transacting business” or “doing business” in Washington. (Washington’s LLC Act and foreign entities laws use both phrases.) What does this mean? Well, like most states, Washington law does not specifically define either “transacting business” or “doing business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Washington law for foreign businesses specifies certain activities that do not constitute doing business in the state. The items listed include:
The law contains a statement that the foregoing list is not exhaustive; other activities also may be exempt. For the full, legal description of each of the listed items, check Section 23.95.520 of the Revised Code of Washington.
If your LLC’s only activity in Washington is one or more of the listed items, you should not need to register with the state.
To register your business in Washington, you must file a Foreign Limited Liability Company Registration with theWashington Secretary of State (SOS). You can download a copy of the registration form from the SOS website.
To complete the registration, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for a Washington registration, you need to provide:
You must include a Certificate of Existence or equivalent document from the secretary of state of the state where you formed your LLC. The certificate must have been issued no more than 60 days before the date you file your registration.
You can file on paper or online. The filing fee by mail is $180. The online filing fee is $200.
If your LLC does business in Washington without being registered, it cannot bring a lawsuit in the state. In addition, the LLC will be liable for all the fees it otherwise should have paid for registration plus any applicable penalties. However, not being registered does not invalidate your LLC’s contracts or prevent your LLC from defending a lawsuit in the state of Washington. Also, the limitation on the liability of a member of your LLC is not waived solely because the LLC did business in Washington without being registered.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Washington are essentially the same. See the Washington Secretary of State website for forms, information, and filing instructions for registering a foreign corporation in Washington.