Starting an L.L.C. in Washington
A Washington LLC, or L.L.C. (short for “Limited Liability Company”), is a hybrid business structure that protects you from being sued personally. If your L.L.C. is sued, creditors can’t get their hands on your personal assets, like your home, car, and personal bank accounts.
You can run a business out of your Washington L.L.C. or use it to buy things like real estate, cars, boats, and planes.
A. Washington L.L.C. Name:
Before you file a Washington L.L.C. with the Secretary of State, you need to check the state’s records to see if the name you want to use is available.
Your Washington LLC name must be different and unique from all the other businesses already listed in the state.
Search for a Washington L.L.C. Name:
On theWashington Advanced Business look page, you can look for the name of any Washington L.L.C. you want.
L.L.C. Designator: According to sections 23.95.300 and 23.95.305 of Washington law, the name of your L.L.C. must end with a proper designator. Washington lets people use the following identifiers:
* L.L.C.
* “L.L.C.” stands for “Limited Liability Company.”
Tip: “L.L.C.” is the most popular designation if you’re not sure which one to use.
Your Washington L.L.C. name can’t include words like “Inc.” or “Corp.” that makes it sound like a different legal organization.
Many people rush through the filing process and want to change their Washington LLC name. You can change the name of an L.L.C., but you have to do many things, like file a change with the Secretary of State and tell the I.R.S., the bank, and the Department of Revenue. It’s much easier to develop a good name for an L.L.C. from the beginning and not have to change it later.
B. Washington L.L.C.
In the Certificate of Formation for your L.L.C., you must list a Registered Agent. This is required by the Secretary of State in Washington.
A Washington Registered Agent is a person or company that is chosen to get your L.L.C.’s notices from the Secretary of State and any legal mail (called “Service of Process”) you get sued.
Your Washington Registered Agent will have a physical address in the state (P.O. Boxes are not allowed) where Service of Process and other papers can be sent.
Who in Washington can be the Registered Agent for your L.L.C.?
You can choose from 3 people in Washington to be the Registered Agent for your L.L.C.
C. Certificate of Formation and First Report
To make a Washington L.L.C., you have to file the Washington Certificate of Formation and the Initial Report.
Washington’s filing fee for an LLC:(One-time fee of $200)
The way to file: In Washington State, you can start an L.L.C. by mail or online, but filing online is much better. The approval time for an online L.L.C. filing is shorter, and it contains your required Initial Report at no extra cost. If you filed by mail, you would have to file your Initial Report separately and pay an extra fee. The state wants filings to be done online, and so do we.
File L.L.C. online: If you want to file your L.L.C. online, you need to make an account with the Corporations & Charities Filing System (CCFS).
Approval times: If you file online, your Washington LLC will be approved in 12 to 14 working days.
Due to the current state of the world and government delays, it may take longer to file. Check out how long it takes to get a Washington L.L.C.
OK from Washington L.L.C.:The Secretary of State will send you three papers that say your L.L.C. is OK. They will be sent to you by email, and a copy will also be sent to the Registered Agent for your L.L.C.
You’ll get a “Congratulation Letter,” “Certificate of Formation,” and “Certificate of Formation with Initial Report – Fulfilled” in return.
D. Operating Agreement for the Washington LLC
A Washington LLC Operating Agreement is a written contract between the members of the L.L.C. that says who owns the L.L.C. and how much of it they own. You can download and change our Operating Agreement form for free.
Both Single-Member L.L.C.s and Multi-Member L.L.C.s should have an Operating Agreement.
The Operating Agreement for the L.L.C. will also explain how gains are split, how taxes are paid, and how the L.L.C. is run.
Having an Operating Agreement for your Washington L.L.C. is also a good way to show that the business is a different legal entity from you. This helps keep your L.L.C.’s safety of your personal assets in place.
“Internal Document”: The Operating Agreement for your Washington L.L.C. is an “internal document,” which means that you only need to keep a copy of your business records and give a copy to other L.L.C. Members, if necessary. The Operating Agreement for your L.L.C. does not have to be sent to the Secretary of State, the Department of Revenue, the I.R.S., or any other government body.
E. Make sure your Washington L.L.C. has an E.I.N.
After your Washington L.L.C. is accepted by the state, you can get an E.I.N. number from the I.R.S.
An E.I.N. is also called an Employer Identification Number (E.I.N.), a Federal Tax ID Number (FEIN), or a Federal Employer Identification Number (FEIN).
Your Washington L.L.C.’s E.I.N. can be thought of as its “social security number.” It helps the I.R.S. figure out who your L.L.C. is for tax and filing needs.
You will also need the E.I.N. for your Washington L.L.C. when you open a bank account, file taxes, ask for a business license, and, if you have employees, pay them.
How does Washington tax an L.L.C.:The I.R.S. doesn’t have a specific tax classification for L.L.C.s. Instead, a Washington L.L.C. can be taxed in 4 different ways. Two of these are automatic (they happen when you get your L.L.C.’s E.I.N.), while the other two require a special election (you have to file a form after getting your L.L.C.’s E.I.N.). Before you apply for your E.I.N., you should read about how L.L.C.s are charged.
Wait for approval of the L.L.C.: Don’t ask for an E.I.N. until the Secretary of State in Washington has accepted your Washington L.L.C
A free E.I.N. is: L.L.C.s can get E.I.N.s from the I.R.S. for free. Getting an E.I.N. from the I.R.S. costs nothing.
L.L.C. of a husband and wife: If you are starting a 2-Member L.L.C. in Washington, you can choose to be taxed as a Qualified Joint Venture. This means that for tax reasons, a 2-Member L.L.C. can be treated like a Sole Proprietorship instead of a Partnership.
When you apply for an E.I.N. for your L.L.C., this person will be the “contact person” for the I.R.S. You will be the Responsible Party if you have a Single-Member L.L.C. If you have an L.L.C. with more than one member, any member of the L.L.C. can be the Responsible Party. Click here: E.I.N. Responsible Party for L.L.C. for more information.
How to get an E.I.N. number: You can get an E.I.N. for your Washington L.L.C. in 3 ways:
You can apply for an E.I.N. online if you have an SSN or an ITIN. If you try to apply for an E.I.N. online and get an error message, you’ll need to use Form SS-4 to apply for an E.I.N. instead.
You can still get an E.I.N. for your L.L.C. even if you don’t have an SSN or an ITIN. Just follow these steps: how to get an E.I.N. if you don’t have an SSN or an ITIN.
F. The annual report for Washington L.L.C.
After you set up an L.L.C. in Washington State, you have to file a Washington L.L.C. Annual Report every year. All L.L.C.s in Washington must file this, no matter how much money they make or how much business they do.
The Annual Report is sent to the Secretary of State in Washington.
The fee for the Washington L.L.C. Annual Report is $60 each year.
Due date: An Annual Report is due for a Washington L.L.C. for the first time the year after it was formed. They are due by the end of the month that the L.L.C. was formed. For example, if your L.L.C. was created on March 5, 2023, your first Annual Report is due on March 31, 2024. Then it will be due every year on March 31.
How to send in a yearly report: The best way to file the Annual Report for your L.L.C. is online, not by mail, and this is the way the state prefers, and it’s also what we suggest. You can use the Corporations and Charities Filing System (CCFS) to file online. Hit “Business Maintenance Filings” on the left, then hit “Annual Report.”
Don’t let your L.L.C. be shut down: Most of the time, L.L.C.s are shut down by the Secretary of State because they didn’t file their needed Annual Report. We strongly suggest that you put a recurring reminder on your calendar and write a note so that you can see it.
Annual Report approval: After you file the Annual Report for your Washington L.L.C. online, it will be accepted right away, and you’ll be able to download it from your CCFS dashboard.
G. Business license from the state of Washington
All L.L.C.s in Washington must get a business license from the state. The word “business license” can be confusing because it’s both a license for a business and a “bulk registration.” Don’t worry; our lesson on Business Licenses will take you step-by-step through the process.
If the Business License Application is filled out, the following will happen:
Your L.L.C. gets a business license from the state.
Depending on the city, your L.L.C. gets a City Business License. Depending on the business, your L.L.C. gets a Specialty Business License.
You can choose to give your L.L.C. a trade name, but most people don’t need to.
The Department of Revenue sets up a tax account for your L.L.C.
If you plan to hire people, you register your L.L.C. with the Department of Labor and Industries. If you plan to hire people, you register your L.L.C. with the Employment Security Department.
The fee for a business license in Washington is $90, and it only has to be paid once. The fee used to be $19, but in July 2020, it went up to $90.
How to apply: You can apply for a Washington L.L.C. Business License by mail or online, but we suggest filing online. It’s much easier to do and takes less time to process.
Taxes in the state of Washington
Washington L.L.C. Taxes are different for every L.L.C., but we can give you an outline.
Tax on income: Usually, there are three ways to pay income taxes:
(Unlike most states, Washington doesn’t have a state income tax on individuals or businesses.)
Federal income taxes: A Washington L.L.C. is a pass-through company, which means that the L.L.C.’s profits and losses flow through to your personal federal tax return.
If you have a Single-Member L.L.C. that is taxed as a Sole Proprietorship, you will probably show your business income on a Schedule C as part of your personal 1040 return.
If you have a Multi-Member L.L.C. that is treated as a Partnership, you will need to file a 1065 Partnership Return and give K-1s to each of the L.L.C. Members. The L.L.C. Members will then include the income from the K-1s on their personal 1040 returns.
L.L.C.s are taxed based on how many Members they have because the I.R.S. doesn’t have a special tax category for them. To learn more, please read about how L.L.C.s are charged. An L.L.C. can also choose to be treated as an S-Corporation instead of a C-Corporation to save money on self-employment taxes.
Even though there is no income tax in Washington, there are probably other taxes you have to pay. These include business and occupation tax(“B&O”), retail sales tax, use tax, property tax, and other taxes that are specific to your field.
Sales tax: If you sell retail items or provide certain services, you must receive sales tax and send it to the state.
H. Washington sales tax rates
you can find out more about the sales tax rates inWashington.
Tip: Set up an account with TaxJar if you need help automating your sales tax returns.
Recommendation: To find out all of your tax reporting and filing needs, you will need to talk to an accountant. Figuring out all of your tax filing needs can be hard, and if you don’t do it right, you could get fines, fees, and interest.
I. Washington L.L.C. Bank Account
Once the I.R.S. gives your Washington LLC an E.I.N. number, you can open a business bank account.
Having a business checking account for your Washington L.L.C. is the best way to keep your personal assets safe from business debts. Using a personal bank account for your L.L.C. is called “commingling assets,” and if you end up in court, this could make you personally liable for business debts.
Having a separate business bank account for your L.L.C. also makes it easier to keep records for taxes and accounting.
In general, business banking at different banks is pretty similar. However, each bank has its own rules and laws, so you should call around to find out:
* minimum starting deposit
* minimum balance requirements
* if there are any monthly fees for care
Charge card: You can also get a credit card for your business to earn points, miles, and other benefits.
J. Business Phone Number
Get a “virtual business number” for your Washington LLC instead of giving out your personal cell phone number or home phone number. You can change the number so that it rings on your cell phone.
Phone.com is our best company. They have the best customer service and the lowest prices.
You can get a local Washington phone number for your business, or you can get a 1-800 number. Phone.com makes it easy to forward your calls to any number you want. You can also make pre-recorded messages and have your voicemails sent straight to your email.
Getting a different phone number for your Washington LLC is a good idea if you want to keep your real phone number off of those annoying “public record” websites (and stop the spam calls).
Organizations in Washington State
Phone: 360-725-0377 Washington Secretary of State Washington Corporations and Charities Division
Monday to Friday, 8 a.m. to 5 p.m.
Business Licensing Service at the Washington Department of Revenue: 800-451-7985
Monday to Friday, 8 a.m. to 5 p.m.
