Here’s an overview of the key steps you’ll need to take to start your own business in Washington.
The most common legal structures for a small business are:
There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check Choose Your Business Structure on Nolo’s website for more information on how to choose the best ownership structure for your business.
For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Washington Secretary of State (SOS). You can check for available names by doing a corporations search on the SOS website (the search site covers LLCs, corporations, and other registered entities). You can reserve an available name for 180 days by filing a Name Reservation form. There are certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations). See How to Form an LLC in Washington and How to Form a Corporation in Washington for more information.
Is your business a sole proprietorship or partnership that uses a business name that is different from the legal name of the business owner (for a sole proprietorship) or surnames of the individual partners (for a partnership)? If so, you must register a trade name with the Washington State Business Licensing Service (BLS). You can registeronline or on paper.
If you plan on doing business online, you may want to register your business name as a domain name. See Choose and Register a Domain Name for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See How to Do a Trademark Search for more information.
Tax Registration. If you will be selling goods in Washington, you must register with the Department of Revenue (DOR) to collect sales tax. You can register by filing a Business License Application with the BLS online, by mail, or in person.
EIN. If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.
Regulatory licenses and permits. These cover areas such as:
Check the List of Licenses section of the BLS’s Business & Professional Licenses webpage for additional guidance on state licenses. You can obtain some state-issued business-related licenses by completing the BLS’s Business License Application.
Many other licenses are issued at the city or county level. Check the BLS webpage that lists Washington citieswho work with the BLS to issue local licenses. Also check the website for any Washington city or county where you will do business.
Professional and occupational licenses. These cover people who work in various fields. Many of these licenses are handled through the BLS. For more information, check both the Professions section and the List of Licenses section of the BLS’s Business & Professional Licenses webpage.
You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking municode.com.
Washington is one of just four states that have no corporate tax and no personal income tax. However, Washington does have a Business and Occupation Tax (B&O Tax). See Washington State Business Income Tax for more information on state business taxes in Washington.
Washington LLCs and corporations must file annual reports (also known as annual renewals) with the BLS. The reports must be filed online.
Apart from any Washington taxes, there are federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business, available at irs.gov.
Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check Obtaining Business Insurance for more information.