A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Washington. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Washington law, an LLC name must contain contain the words "Limited Liability Company" or "Limited Liability Co.," or the abbreviation "LLC" or "L.L.C."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Washington Secretary of State. Names may be checked for availability at the Washington Secretary of State business name database.
You may reserve a name for 180 days by filing a Name Reservation with the Washington Secretary of State. The reservation must be filed by mail.
Every Washington LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a Washington resident or a corporation or LLC authorized to do business in Washington. The registered agent must have a physical street address in Washington.
A Washington LLC is created by filing a Certificate of Formation with the Secretary of State. The certificate must include:
The certificate may be filed online or by postal mail. The filing fee is $180 for filing by mail or $200 for online filings (which are processed in 2-3 business days).
An LLC operating agreement is not required in Washington, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates. An operating agreement does not need to be filed with the Certificate of Formation.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Business Licenses: Washington State requries virtually all businesses to obtain a state business license. A county, city, or other local business license will likely be required as well. Indeed, you will likely need licenses in every location where you do business; not just where you’re based. Check the Washington State Department of Revenue Business Licensing Wizard for the requirements for your business and location. You can register and obtain your state license and many county and city licenses online at the Department of Revenue website, or by mail using the Business License Application form. For information about local licenses not handled through the Business License Application, contact each city or town you will be conducting business. Depending on your occupation, a professional license may be required as well. See the Washington State Department of Licensing website. For more information, see Nolo's article How to Get a Small Business License in Washington State.
Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, must register with the Washington Department of Revenue. Washington has no income tax on individuals or businesses, but it does impose a business and occupation tax on gross business income. For more information on Washington LLC tax registration, check Nolo's article Washington LLC Annual Filing Requirements.
Every Washington LLC and foreign LLC authorized to do business in the state must file an annual report (also known as an annual renewal) with the Secretary of State. The initial annual report must be filed within 120 days of the date you filed to create your LLC. Subsequent annual reports are due on dates determined by the Secretary of State. The Secretary of State will send a renewal notice to the LLC’s registered agent approximately 45 days before the Annual Report is due. The Initial Report and Annual Report may be filed online or by postal mail. The fee for filing Initial and Annual Reports is $60.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Washington Secretary of State. You can conduct a name search for free on the Washington SOS website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Washington does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
To do business in Washington, all LLCs organized outside of the state must register with the Washington Secretary of State. Foreign LLCs must appoint a registered agent for service of process. The agent may be a Washington resident or a business entity authorized to do business in Washington.
To register, file a Foreign Limited Liability Company Registration with the Secretary of State.The application may be filed online or by postal mail. The filing fee is $180 for filing by mail or $200 for online filings.
The completed application must be accompanied by a certificate of existence or good standing from the foreign LLC’s home state that is not more than 60 days old.
For most formation purposes, a Washington single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Washington are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Washington and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Washington state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a Washington PLLC, see our article, How to Form a Professional LLC in Washington.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take.