How to start your LLC in Seattle, WA

How to select a name for your Washington LLC? Every business needs a name. You might already have some ideas in your mind. But it’s vital to ensure it meets the legal requirements.

Washington law provides LLC naming guidelines to follow. Each LLC must include one of the following:

• Limited Liability Company
• Limited Liability Co.
• L.L.C.
• LLC

Certain things cannot be in an LLC’s name. Don’t hold your business out as something it isn’t. Unless authorized, avoid terms related to highly-regulated industries, such as legal or financial services.

It’s also critical that your LLC name is unique and distinguishable. Use the Corporation Search to view the names of existing businesses. Don’t use the same terms or closely-related names that may confuse people.

Using doing business as (DBA) names can help. They allow you to operate under a name different from the LLC’s name. For example, “Seattle Coffee Experts LLC” could use “Seattle Drip and Sip.”

It’s also a good idea to register a matching domain name (URL). Even if you don’t want to launch a website right away, reserving the domain name can prevent problems down the road.

What is a registered agent? A registered agent is the primary contact for an LLC. The main function is to receive service of process. If your LLC gets sued, the paperwork goes to the registered agent.

Washington requires all LLCs to appoint a registered agent. The State separates them into two categories. There are commercial registered agents and noncommercial registered agents.

Any person or business can serve as the registered agent for a Washington LLC if they have an office in the state. Commercial registered agents must submit a statement saying that they are in the business of serving as registered agents.

You can appoint yourself as the registered agent. But many seasoned business owners use a commercial registered agent service instead.

Performing the registered agent function yourself has the following advantages:

• It’s cheap: Avoids an extra expense for your new business.
• It’s simple: Use the same contact information across the board.
• It’s reliable: All documents and notices come to you.

But there are some downsides to being your own registered agent. They include:

• No privacy: The registered agent’s contact information is public. The Secretary of State lists it on its website.
• Junk mail/spam: You’ll have to sort through advertisements without missing a thing.
• No breaks: Registered agents must be available during all business hours.
• Business interruptions: Avoid embarrassing situations by separating your business functions. Keep lawsuits out of sight from your customers.
• It’s your fault if you miss something: There’s no one else to watch out for important notices.

We recommend using a commercial registered agent service to get around these problems. Your address remains confidential. And the service will let you know about any important documents.

Registered agent services cost around $100-$150 per year. Attorneys can charge up to $500 per year to fulfill this role.

If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.

How do I file a Certificate of Formation for a Washington LLC? Now is a great time to grab some coffee if you’re dozing off. Filing a Certificate of Formation with the Secretary of State forms your LLC. It is the most important step of all.

An LLC does not exist until the Certificate of Formation gets filed and processed.

Some people believe attorneys must complete this task. But the process is likely easier than you think. The Certificate of Formation only needs basic information.

Review the Revised Code of Washington Section 25.15.071 to see what you must include. Every Washington LLC Certificate of Formation must have:

• The LLC’s name;
• The address and county of the LLC’s principal office;
• The registered agent’s name and address; and
• Contact information for each person filing the certificate of formation.

Be prepared to pay a filing fee of $200 to apply online or $180 to file by mail. Washington offers a fillable form to make the process easy.

If your LLC has a set end date, you can include that in the Certificate. You can also list other information if desired. But use caution when doing so because you need to pay a fee to change anything listed on the Certificate.

We recommend filing online. Most online applications are processed within two business days. Mailed applications are processed in the order received. You can pay $50 for expedited service.

To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.

What is an operating agreement? Operating agreements are private contracts that spell out how an LLC functions. They dictate the rights and responsibilities of the members. And you can customize them according to your needs.

LLCs are not required to have an operating agreement under Washington law. But without one, your LLC falls back to state law when disputes arise. The laws might not align with your interests.

Stay ahead of the game and execute an operating agreement. That way your LLC operates as you intend, handling changes and disputes according to the rules you’ve set out. The best operating agreements cover any situation the LLC might find itself in.

You can customize operating agreements according to your desires and expectations, including:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and its members. The operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

You do not need to file the operating agreement with the state. They are private contracts between the LLC members.

Experienced business owners complete this step to protect their businesses and interests. We recommend using one of the best LLC formation services to make it easy. They provide operating agreement templates for as little as $50.

Do I need to get an EIN? The Internal Revenue Service uses Employer Identification Numbers (EIN or FEIN) to track the tax information of businesses for federal tax purposes. These numbers are essentially like Social Security Numbers, but for businesses instead of individuals.

The IRS requires certain categories of businesses to get an EIN. These include any of the following cases:

• If the LLC has more than one member;
• The LLC hires any employees; or
• It follows C-corporation or S-corporation taxation rules.

Even if you don’t fall under one of these qualifications, getting an EIN is beneficial for your business. For example, some states require having an EIN for state tax purposes, and banks will often require them to open a business bank account for your LLC.

The IRS has made the process easy through its online EIN application. It only takes about five minutes to complete and is entirely free of charge. It’s not worth hiring someone to do this unless it’s part of a wider LLC formation package.

Read More: How to get an Employer Identification Number in Washington