Forming an LLC in Washington will help protect your personal assets from lawsuits and judgments against your business. An LLC is a legal structure that separates your business and personal assets. By not having your business in a separate legal structure, you can be held personally liable for certain debts and lawsuits incurred by the company. Forming a Washington Limited Liability Company does not require an attorney and you can save a lot of money if you do it yourself with the five simple steps below.
Before getting into the five steps here are a few things to know about Washington LLCs.
How Much Does It Cost to Get an LLC In Washington?
The filing fee for a Washington Limited Liability Company is $180, payable to the Washington Secretary of State. Expect 3-4 weeks for approval but for $230 you can file online with the expedited fee.
Washington Annual Report and Annual Fees
Washington requires all LLCs to file annual reports. The filing fee for a Washington LLC annual report is $71 and is due each year by the end of the year the LLC was formed.
- Minimum Number – one or more
- Members/Managers- at least one is required to be listed in the Certificate of Formation
- Residence Requirements – none specified
- Age Requirements – none specified
In addition to forming your Washington LLC, you will need to check for licenses and permits. The SBA has a guide of both state and federal licenses and permits
Steps to Forming a Washington LLC
Step 1. Name Requirements
Your corporate name must end with the words Limited Liability Company or an abbreviation of these words (“LLC,” “L.L.C.,” “Limited,” “LTD.,” “LTD”.). Check out our article on naming your LLC for all of the requirements that you must follow when naming an LLC.
The name must not contain any of the words or phrases:” Bank,” “banking,” “banker,” “trust,” “cooperative,” “partnership,” “corporation,” “incorporated,” or the abbreviations “corp.,” “ltd.,” or “inc.,” or “LP,” “L.P.,” “LLP,” “L.L.P.,” or any combination of the words “industrial” and “loan,” or any combination of any two or more of the words “building,” “savings,” “loan,” “home,” “association,” and “society,” or any other words or phrases prohibited by any statute of this state
Now that you have the perfect name, you want to be sure nobody else is using it as each state requires a unique name per LLC or Corporation. To check if your name is being used, visit our list of Secretary of State offices to do a free Washington LLC name search.
Step 2. Choose a Registered Agent
The registered agent must have a physical presence in Washington but may be an individual resident, domestic or foreign corporation authorized to transact business in Washington. The registered agent must also have a physical address and be available during normal business hours to accept delivery of documents. A Post Office Box or personal mailbox is not acceptable. If the registered office includes a suite number, it must be included in the registered office address.
Provided you as the business owner have a physical presence in Washington, you can be the registered agent however, there are additional privacy benefits to having a third-party registered agent.
Check out our article on why an LLC Registered Agent may be a good choice for your business for more details.
Step 3. File the Certificate of Formation
This is the most important step and many people believe that you need an attorney to file. While we don’t discourage having an attorney, filing a Washington LLC can be done by most people, but you can save considerable money over an attorney and make sure everything is filed correctly by using a formation service such as LegalZoom.
Step 4. Create an Operating Agreement
An operating agreement is not required in Washington but is typically a good idea, especially for an LLC owned by multiple people. The primary function of the operating agreement is to govern the relationship between the owners of the business, but also outlines who makes what decisions, how profits or losses are distributed and the operating procedures of the LLC.
Step 5. Get an EIN
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number (FEIN), is used to identify a business entity. It is essentially a social security number for the company.
In addition to the EIN being an identifying number for the LLC it serves a few other purposes such as:
- Opening a business bank account
- Federal and State tax purposes
- Conduit to pass payroll taxes for employees paid by the company
This link will take you to the IRS website to get an EIN for your LLC. Less than five minutes and you will have your number free of charge. Wait until your LLC is approved and filed before applying for your EIN.
Something to consider when you form a Washington LLC is that the new LLC has no credit history and as such may make it a more difficult to acquire business funding or vendor credit. Depending on the industry, you may want to look into building your LLC’s business credit soon after filing to begin generating a credit history. Dun & Bradstreet offers a lot of information about improving business credit.
Don't want to go it alone but don't want the expense of an attorney? Another alternative is to use an LLC formation service that will do the formation at a low cost. Take a look at our comparison page of popular LLC formation services.
IncFile has a special right now for LLC formation services for only $49 plus state fees, plus a free registered agent for the first year!