If you own a business and decide that a limited liability company (LLC) is the right structure for you, you may wonder, how do I create an LLC in Washington State? It’s simple and inexpensive. The hard work is deciding which business form works best for you and coming up with an effective ownership agreement.
An LLC is one of many types of legal entities that can own and operate a Washington State business. Dickson Frohlich Phillips Burgess can help you decide if an LLC is your best choice, given your priorities and the nature of your business.
- You have liability protection like a corporation, but an LLC is easier and less expensive to form and run.
- It can own and run just about any business.
- There can be one or multiple owners.
- LLCs are often used by investors in residential rental or commercial property.
Prior to filing the form with the Washington Secretary of State’s office, you need to follow the state’s Uniform Business Organizations Code. You should also complete some additional steps that can protect you from unnecessary liability.
How Do I Set Up an LLC in Washington State?
There are several steps involved to set up an LLC in Washington state. We outline each of them below.
Choose a Name
Come up with a name and confirm that it’s available for your use. Washington requires that each company name be “distinguishable” in the Secretary of State’s records. Your name must be at least slightly different than those entities that have already filed. To be safe, come up with multiple names in case someone else is using it.
If you’re not ready to create your LLC but have some name ideas, you can reserve an available name for up to 180 days by filing a Name Reservation form and paying the filing fee. The name must contain one of the following:
- The words “limited liability company”
- The words “limited liability” with the abbreviation “Co.”
Your name can’t have words or phrases that could mislead someone about the business type or give the impression that you have a government connection.
Appoint a Registered Agent
A registered agent gives state government, tax authorities, private citizens, and other companies a permanent, reliable location to send mail and legal documents. You can also use a third-party company specializing in acting as a registered agent for companies.
File the Formation Document
A Certificate of Formation – Limited Liability Company is filed with the Secretary of State and you pay the filing fee. You can file online, on paper, by fax, or by mail. This document contains:
- The entity’s name
- The address for the principal place of business
- The name, signature, and address of the registered agent
- Whether the LLC’s duration is perpetual or limited
- The formation’s effective date (upon the certificate’s filing or later)
- The executor’s signature.
If there are multiple owners, or members, the Certificate of Formation is longer and more complex.
After the filing, the state will give you a nine-digit unified business identifier number. It serves as a tax registration number for the Washington Department of Revenue and an identifier for other state business licenses.
Create an Operating Agreement
This document is not required by law. But if there’s more than one member, it’s required by common sense. Similar to corporate bylaws, it gives the rules of how the company is run. It can also spell out:
- The nature of members’ relationships
- Who’s responsible for doing what
- How member disagreements are resolved
- How a member can be bought out
- On what grounds and how a member can be removed.
Creating the operating agreement forces members to think about important management and ownership issues and then come up with solutions. The agreement can prevent disputes over what rules might be, because they’re written down. It’s easier to follow those rules because the members agreed to them.
Get a Federal Employer Identification Number (EIN)
An EIN from the U.S. Internal Revenue Service helps your LLC create a legal identity. This can protect you personally from its debts and obligations. An EIN is required if your LLC has more than one member or plans to hire employees.
Get Business Licenses
Washington State requires virtually all businesses to get a state business license. Your county and city will also probably require a business license. It will probably be needed in every location where you do business, not just where you’re based. A professional license may be required, depending on your occupation.
File an Annual Report (Annual Renewal)
Your LLC needs to file an annual report (or annual renewal) with the Secretary of State. The first one must be filed within 120 days of the date you filed your LLC. Later annual reports are due on dates decided by the Secretary of State.
Obtain a Certificate of Good Standing
A Certificate of Good Standing confirms that your LLC was lawfully formed and is correctly preserved. The fee is $20.
How Long Does it Take to Get an LLC in Washington?
If you file by mail, it usually takes two to three weeks to get an LLC in Washington State. Filing online normally takes two to three business days.
How Much Does an LLC Cost in Washington?
The cost of starting an LLC in Washington State involves several fees. The Certificate of Formation is $180. The Business License Application cost varies, and the City Endorsement may cost $50. The Annual Report will be $71 plus the cost of the City Endorsement renewal. If you hire a Commercial Registered Agent, that may be about $125 per year.
Starting a Business? Our Attorneys at Dickson Frohlich Phillips Burgess Can Help.
To obtain tax advantages, LLC technical requirements must be met. Setting up your business properly to begin with can save you significant money in the long run. Our experienced business attorneys in Tacoma and Seattle can help you decide whether an LLC is your best choice, and help you navigate regulatory requirements and keep up with required filings.
If you are starting a business or you already own one and need legal assistance, the business lawyers of Dickson Frohlich Phillips Burgess are here to help. Please call us at 206-621-1110 for a consultation, or set up an appointment using our online contact form today.