Frequently asked questions about starting and running an LLC, or limited liability company.
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.
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.