Starting an LLC in Washington State? 7-Step Guide

12/11/2023 12:22 PM

Everything you need to get your LLC started — and beyond.

Put down Cascadia roots by starting an LLC in Washington state. Although it’s most famous for being the home of corporate giants like Amazon and Microsoft, Washington knew them before they were cool. For decades, the state has nurtured the success of startups, small businesses and entrepreneurs. If you think starting an LLC in Washington state seems complicated, fear not — it’s actually an easy, affordable way to protect yourself and grow your business.

7 Steps to Starting an LLC in Washington State

Starting a Washington state LLC is the best way to protect your personal assets from business liability without the intimidating formalities of starting a corporation. If you’re currently operating as a sole proprietorship, you’re personally liable for any debts or lawsuits arising from the business. A creditor can put a lien on your home or garnish your bank accounts if your business owes money or loses a lawsuit. However, if you form an LLC, creditors can only go after the assets of the business.

How do you know whether it’s better to operate as a sole proprietorship or LLC? Washington State makes it easy and affordable to take advantage of all the benefits of converting your business to a Washington state LLC. If you’re interested in learning how to start an LLC in Washington state, this guide will help you get started.

In the State of Washington, LLC formation is quick and easy. You can do it yourself using the forms and guides available from the state, or you can use an online LLC filing service that compiles everything you’ll need and walks you through the process.

Step 1: Choose a Name for Your Washington State LLC

The first step in starting an LLC in Washington state is naming your new business. Every LLC in WA must have a distinguishable name. That means your business name can’t too closely resemble the name of another business entity.

You can confirm your name is unique by doing a secretary of state business search for your proposed name online. The best way to conduct this search is to set the search by “contains” and search for the element of the name that is most likely to be unique.

For example, if you want to start an LLC named “Dragon Mare Publishing, WA LLC, and you only search “publishing,” the Washington LLC search page will give you just over 1,000 entries to review. However, if you only search “Dragon Mare” and find no entries, you can likely use that name.

Also, all Washington state LLC names must have “limited liability company” or “LLC” integrated into them. To make it easy, most companies simply place “LLC” at the end.

Inside Scoop: Just because a name is available doesn’t necessarily mean you’ll be able to use it to do business — another company or individual may have it trademarked, or it may be in use in another state. You may also want to search nearby states’ name search databases and the federal trademark database.

Choosing a Domain Name

Check out one of several excellent guides that dive deep into the art and science of choosing a domain name for your business website. In general, it shouldn’t be more than two or three words long; even then, it depends on word length. If your business is “Bos Training,” using “bos-training.com” should work fine. However, longer names, like “Dragon Mare Publishing” may work better if you shorten it to “dragonmare.com.”

Step 2: Appoint or Hire a Registered Agent

You need a registered agent before starting an LLC in Washington state. A registered agent is a person or business appointed by an LLC to accept legal correspondence on the LLC’s behalf. They must have a physical address in Washington state and be available during regular business hours to receive annual reports, legal notices and service of process on behalf of your LLC.

Inside Scoop: Technically, anyone over 18 can be a registered agent; you can even be your own LLC’s registered agent. However, you or another private individual may not always be available to accept critical legal documents. To make sure they receive important documents promptly and reliably, many Washington state LLCs hire a professional registered agent company.

Step 3: Complete and File the Certificate of Formation

The primary formation document for starting an LLC in Washington state is the certificate of formation. You can download and mail a paper form to the Washington secretary of state or create a user account and file online.

Both the electronic and paper forms contain detailed instructions. To approve the certificate of formation, Washington state requires you to provide the following:

Your LLC’s proposed name
Your LLC’s duration period (if it isn’t perpetual)
Your registered agent’s name and address
Your registered agent’s consent to service (commercial registered agents will provide a form for you to submit with your certificate of formation)
Your LLC’s physical and mailing addresses

Inside Scoop: Unlike many other states, Washington doesn’t require that the certificate of formation list the home addresses of its members and managers. Hiring a professional registered agent allows you to completely preserve your privacy and avoid sharing your personal information online.

How much does it cost to start an LLC in Washington State?

The filing fee for a Washington state LLC is $200 if you file online or $180 if you mail paper forms. If you file online, your registration should be confirmed within two business days. Otherwise, the state processes paper forms in the order in which they are received, which can take several weeks.

Step 4: File an Initial Report

Once you file your certificate of formation establishing your LLC, Washington state requires you to submit an initial report. You must file it within 120 days of the Secretary of State’s approval of your certificate of formation.

If you established an online filing user account, you can file this report online. If not, download and send this form to the Washington secretary of state; the filing fee is $10.

Inside Scoop: You can expedite approval of this filing for an additional $50. You can’t begin doing business as an LLC in Washington until this initial report is approved.

Step 5: Draft an Operating Agreement for your Washington State LLC

Operating agreements aren’t required when starting an LLC in Washington state. However, they are recommended. They establish the relationships between members and help avoid disagreements about how the business is run.

An operating agreement is a document that outlines your LLC’s management structure, financial operations and functional procedures. It addresses essential terms between members, including:

Each member’s contributions to the LLC (e.g., cash, real estate, capital, specialized expertise, etc.)
Plans for profit and loss distribution
Each member’s managerial powers and responsibilities (e.g., who handles banking, finance, human resources, and other essential duties)
Voting procedures, including how to handle deadlocks
Procedures for admitting new members or handling departing members

Creating an operating agreement is the most complex element of the process of starting an LLC in Washington state. You may want to consult a business attorney to ensure you draft a complete and transparent agreement.

Inside Scoop: If you don’t have an operating agreement, the default Washington law for member-managed LLCs will apply. This may not be fair for your situation if there are conflicts or disagreements. Drafting an operating agreement ensures every member’s interests are appropriately protected.

Step 6: Set Up Taxes and Licensing

Before your Washington state LLC starts doing business, you need to set up taxes and licensing. First, register for an employer identification number (EIN). The EIN is your federal identifying number, much like a Social Security number for a business. You can apply for an EIN online after your business is registered.

All LLCs must also apply for a Washington State business license with the state Department of Revenue. The business licensing process also includes registering your business for state taxes.

Inside Scoop: Washington doesn’t impose income taxes on individuals or companies, but it does charge excise taxes on certain types of businesses.

Step 7: File Annual Reports for Your LLC in WA

Annual reports keep your LLC active. After starting an LLC in Washington state, mark your calendar: The reports are due each year on the anniversary of your business formation. A paper form is available to download and mail, or you can file online.

The annual report confirms your LLC remains operational and that the information from your certificate of formation has not changed. Whether you file by mail or online, the fee is $60. The Washington Secretary of State charges a $25 penalty if you fail to file a timely annual report.

Inside Scoop: If you have changed your physical address or registered agent, the annual report is your opportunity to record those changes with the state.

So You Have a WA LLC. Now What?

There’s more to running a business than forming an LLC. Now that the paperwork is done, what else should you be thinking about?

Business Website

One of your first priorities after starting an LLC in Washington state should be building a great website that welcomes your prospective customers. A few great all-in-one options for building your own site are SquareSpace Website Builder, GoDaddy and WordPress. If you’re not the DIY type, consider hiring a web designer to get your site up and running quickly.

Insurance Coverage for Your Washington State LLC

Many kinds of insurance are available to protect your Washington state LLC from catastrophic losses. These include:

General Liability

General liability protects your LLC if you, a member, manager or employee, behave negligently. It addresses damages arising from incidents like bodily injury to another person, damage to another’s property or torts like libel and slander.

Professional Liability

Professional liability insurance protects your LLC from mistakes arising from errors in professional judgment. For example, if your LLC is a civil litigation law firm, professional liability insurance protects you from loss if an attorney misses a statute of limitations or filing deadline.

Property and Casualty Insurance

Property and casualty insurance protects items owned by the LLC. It covers your real estate, equipment and cars, for example. You can use it when you suffer theft or vandalism. Sometimes, you can add riders to cover events like hail, earthquakes and floods.

Errors and Omissions

Errors and omissions is professional liability insurance that doesn’t apply to a specific profession. While attorneys and doctors require specific professional liability policies, E&O works for other industries like technology and insurance.

Cyber Liability

You need cyber liability coverage if your LLC handles personal and private information. Keep in mind that this is a wide net; that data includes people’s darkest secrets as well as more common identifiers like full names, street addresses, Social Security numbers, banking information and credit card numbers. Cyber liability insurance covers damages resulting from data breaches of these sensitive items. It can also help you repair your network and secure it better in the future.

Worker’s Compensation

Washington doesn’t allow private carriers in this realm, so you must register with the Department of Labor and Industries and purchase coverage there. The insurance covers wage replacement and medical benefits to workers who sustain at-work injuries.

Capital for Your Washington State LLC

After starting an LLC in Washington state, you need to figure out how to fund your operations. You have many options, including:

LLC members. Many people prefer to self-fund their business. If you or other LLC members invest in the company, itemize it in your operating agreement.
Small Business Association. The Small Business Association offers loan and grant programs. If your LLC is woman or minority-owned, it is likely worth looking into their programs.
Venture capital investors. Venture capitalists are a good option if your LLC is in a high-growth industry, like technology or software. However, be prepared for these investors to want a membership share in your LLC.
Bank financing. Explore local credit unions and banks to see if you can secure a business loan.
Family gifts. Many great enterprises started on family gifts. Never turn down this generosity!

Local Resources for Washington State LLCs and Small Businesses

You can find all the forms you need on the secretary of state’s corporation division website. The page also includes links to help you file forms online for your LLC, cost schedules and important updates. The website has many helpful guides for all aspects of your small business startup. There are also many local resources you can explore. You can also:

Check with your local chamber of commerce for local programs and training
Use the resources provided by the U.S. Small Business Administration
Find personal guidance through the SCORE small business mentorship program
Explore funding for minority-owned businesses using tools provided by Business Impact NW
Connect with the Washington Center for Women in Business (WCWB)
Contact your local chapter of the Washington Small Business Development Center

Inside Scoop: You can also explore industry-specific and specialized professional associations, like:

The Washington Cannabusiness Association (WACA)
Washington Technology Industry Association (WITA)
The Washington State Farmers’ Market Association (WSFMA)
The French-American Chamber of Commerce for Seattle-PNW
Life Science Washington’s LSW Institute
Washington Maritime Blue

Interested in Starting an LLC in Washington State?

Now that you know how to start an LLC in Washington State, you likely want to find the easiest way to get started. Start your online research with our list of the best LLC creation companies today and get your Washington state LLC up and running in no time.

Legal Disclaimer: This article contains general legal information but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.