How to Form an LLC in Washington Step by Step
To form an LLC in the State of Washington follow these simple steps to ensure you are meeting all state requirements:
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Choose a name for your LLC
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Appoint a registered agent for your business
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File your articles of organization
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File your initial report
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Draft an operating agreement
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Obtain an EIN
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Ongoing Compliance
This guide will cover the necessary steps to take to form an LLC in the state of Washington, along with certain tips and things to be aware of when going through this process. When forming a new LLC, you can either choose to handle this process on your own or hire a service like Firstep to take care of it on your behalf. An LLC is one of the most common types of businesses, and provides owners with the personal liability protection that creates a shield between their personal assets and business assets.
Step 1: Choose a Name For Your LLC
Selecting a name for your business will be the first step in the process of forming a new Washington LLC. A good tip is to perform name searches on the state website to see if there are any currently active businesses that have the same or very similar names to what you would like. Your business name will need to be distinct enough from any active businesses to not cause any confusion for potential customers and must contain "Limited liability company", "LLC", or "L.L.C." in the name to be approved.
You will also need to avoid any restricted words for LLCs such as "Corporation", "Inc", or "Partnership" that can be confusing as they imply your business may be a different structure than an LLC. Following these guidelines, and including some form of the term LLC in your name will ensure your business formation documents are approved, given your name is not conflicting with other active business names.
Step 2: Appoint a Registered Agent For Your Business
It is a requirement for every business type, including LLCs, in the state of Washington to maintain an active registered agent for their business. A registered agent is who will receive service of process on behalf of your business in case of any lawsuits or important documents that are sent to your business. Whoever you appoint as your registered agent will be required to have an active address in the state of Washington, and be available during regular business hours which is Monday through Friday 9am-5pm.
Your LLCs registered agent will need to be at least 18 years old, but can be anyone you choose. It could be yourself, a trusted friend or family member, or you can hire a service to act as a registered agent for your business. A registered agent service will ensure your business is able to list an active Washington address and they will receive any mail or important notices that are sent to your business.
You will need to list your registered agent's name and address on your business formation documents, so if you choose to be your own registered agent be aware you will need to list your personal address.
Step 3: File Your Articles of Organization
After you have chosen a business name and registered agent, you are ready to officially file your articles of organization. You can do this online in the state of Washington, which typically has much faster processing times compared to mail in submissions. The cost to file your articles of organization in Washington will cost $200 online, and typically will be $180 through the mail. You can also have a filing service such as Firstep handle the whole process for you from start to finish so you are able to focus on your business operations instead of administrative tasks.
During this process, you will be required to submit your chosen business name with the correct designator, physical business address, registered agent information, and governors (or owners) of the business. This information will all be listed on your business page on the secretary of state website, so it's important to ensure this is all accurate and updated information.
Once your articles of organization have been approved by the state, you will be notified via email and this will also contain your certified formation documents as well as your UBI (Unified Business Identifier) number. Be sure to download and save these documents to a safe place in case you are required to present them to any potential vendors, partners, or when setting up a business bank account. These also can be helpful to reference when filing any future reports with the state.
Step 4: File Your Initial Report
In the state of Washington, it's required to file what's called an initial report when you submit your articles of organization. This report will need to be filed within 120 days of forming your business, but can be submitted along with your articles of organization. Doing this at the same time is an easier process as you are already filing all the information at the same time, and this avoids potentially forgetting about it and having to pay extra fees to file this later on which are currently $10 to file the initial report after formation.
This initial report ensures your business will be in good standing for the first year of its existence. If you choose to file this during the filing of your articles of organization, it will be sent to you along with your approved documents for your safekeeping.
Step 5: Draft an Operating Agreement
After your business formation has been approved, a logical next step would be to draft an operating agreement. Operating agreements outline the roles and responsibilities of the owners of the business, and how the business will be run. Things such as ownership percentages, roles, voting rights, and decision making processes for your business will be governed by this document. You might also need to present your operating agreement when trying to open a business bank account or taking on potential vendors and partners.
As your business continues to grow, your operating agreement will help with certain processes that arise such as owners joining or leaving the business, as well as how to make decisions when voting amounts are split which can be very useful to have in writing.
Step 6: Obtain an EIN (Employer Identification Number)
Now that you have a new business, you're in good standing, and your operating agreement has been created, your next step as a new business owner should be to obtain an EIN from the IRS for your business. An EIN, or employer identification number, will be used for tax purposes, hiring employees, and when dealing with potential vendors or partners. EINs will be issued to a business only one time and they do not expire, requiring no renewals.
When applying for certain business licenses or opening a business bank account, you will typically be required to present your EIN number along with your articles of organization. You can either obtain an EIN on your own, or hire a service such as Firstep to get this for you. Each active business will only be able to get one EIN, so if you forget your number or lose the documentation, you will need to go through a process with the IRS to retrieve your existing number. This process can be very time consuming and be a long process, so it's extremely important to keep these documents stored in a safe place both in paper and electronically.
Step 7: Maintaining Ongoing Compliance
The ongoing compliance is one of the most important parts of business maintenance as this will continue to keep your business in good standing. This will include a combination of filing annual reports and maintaining your business licenses that are relevant to your industry.
Annual Report
Your annual report in the state of Washington will be due on the last day of your original filing month each year. These will be available to file from 180 days out until the due date, and will cost $70 for an on time renewal. Annual reports can be filed through the Washington secretary of state online and will be processed immediately. After submission, you will be able to download the certified copy of your report from their website. A service such as Firstep is able to handle your annual reports, send you the approved documents, and ensure you do not file late helping to avoid any late fees or fines that can be imposed on your business.
Business Licenses
Depending on your industry, you may be required to file and renew certain licenses for your business to continue to operate legally. Typically this will include industries such as construction, healthcare, finance, and other professional services. You will need to renew these licenses yearly normally, and failure to do so can result in fines, extra fees, and loss legally being able to operate your business.
FAQs on LLCs in Washington
How long does it take if I choose to form my Washington LLC through the mail
Typically if you choose to form your LLC through the mail in Washington it will take longer than if you choose to do this online. By mail, the time can vary more and will normally take around 2-4 weeks. Online filings will take much shorter time at around 5-7 business days.
Do I have to live in Washington to form an LLC in Washington
No, you do not need to live in Washington to form a new LLC in Washington. However, you will still be required to have an active registered agent address in the state to get your formation approved. Using a registered agent service can make meeting this requirement much easier, or if you have a trusted person who lives in Washington you can also use them.
Is an operating agreement required by law for my Washington LLC
An operating agreement is not required by law in Washington, however it is highly recommended as this will outline the processes for governing your LLC and lay out the processes for making decisions.
What do I do if I need to change my LLCs registered agent
You can change your registered agent whenever you need to through the Washington secretary of state website. This typically will be done when filing your annual report, but it can also be done by filing a change of registered agent for free, or in an amended annual report which costs $10.
What happens if I miss my annual report due date
Failing to submit your annual report before your business's due date in Washington will result in having to file a delinquent annual report. These reports will cost $95 instead of the normal $70, and should be taken care of as soon as possible. Missing a report puts your business not in good standing, and leaving your business in this status for a prolonged time can lead to administrative dissolution which causes much higher fees and typically will have a review process your application will need to go through. These reinstatement fees can vary depending how long it has been out of good standing, ranging between a few hundred dollars to thousands if it has been a prolonged time.
