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:
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:
But there are some downsides to being your own registered agent. They include:
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:
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:
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:
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
Getting the necessary licenses and permits is an essential part of conducting business. These can come from the state, county, or city-level authorities. Failing to get what your business needs can result in disaster.
The state of Washington offers many business licenses. Most LLCs need to get state approval. You can use the Business Licensing Wizard to get started.
Some activities are subject to extra requirements under the Department of Licensing.
Besides the State’s needs, you’ll also need to follow local regulations. For Seattle LLCs, these can come from the City of Seattle or King County.
Every commercial operation in Seattle must get a business license tax certificate. This is like a general business license. It is a necessary part of doing business in the area.
Some businesses need to get extra approval. The City of Seattle offers regulatory endorsements for certain activities, such as:
You’ll also want to review the King County requirements. Regulated activities operating in unincorporated areas need to get a business license.
For more help with the approval process, reach out to the City and County officials. They can clarify what your business needs and guide you through the process.
Leveraging the knowledge of experienced business leaders can uncover the shortcut to success. Instead of handling everything alone, reach out to the local community for support. Seasoned entrepreneurs are eager to share valuable advice.
Here is a list of local communities dedicated to helping businesses thrive:
Once you’ve reached this point, take a moment to celebrate. You’ve formed your Washington LLC and are on your way to running a successful business. But don’t let the momentum fade. These steps are worth completing right away.
The web has transformed the way the world does business. Even if you don’t want to start a website immediately, it’s generally worth registering a matching domain name (URL) for your business.
If you don’t register your name in time, domain squatters could beat you to the punch. These groups track new business formations and buy their domain names, only to resell them at vastly inflated prices down the road. Alternatively, one of your rivals could register your ideal domain names to stifle competition.
Getting a domain name is an easy and affordable process. Most cost about $20-$50 per year. Doing so now can help mitigate future headaches.
Using doing business as (DBA) names is a common technique among business owners. It lets you operate under a name different from the LLC’s name. Washington calls these trade names.
For example, “Seattle Roof Services LLC” could use “Seattle’s Best Roofers.”
Washington law requires you to register your trade name. We recommend using the online DOR system to take care of this need. But you can also file through the mail using this fillable form. A $19 fee applies.
Many businesses have ongoing compliance needs. For Washington LLCs, you must file an annual report. It ensures the LLC’s essential information is up to date. Be prepared to pay a $60 filing fee.
Taxes are another major consideration. Most LLCs have pass-through taxation for federal tax purposes. This means that the income flows through to the individual tax returns of the members.
You’ll need to follow Washington’s taxation rules. All Washington LLCs must pay a business and occupation tax of 1.5% on gross receipts. Other taxes may apply depending on the activities involved.
Now is a great time to open a business bank account. This helps keep your finances and assets separate. It’s helpful for bookkeeping and has some legal advantages.
You might also go over available insurance policies. General business liability and workers’ compensation insurance can rescue you from many hardships.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.