Starting a business is exciting, but it’s important to be aware of the legal aspects involved in owning and running a business.
In the state of Washington, the requirements for forming a Limited Liability Company (LLC) are similar to those in other states. In this guide, we’ll explain what you need to know before you start an LLC in Washington.
To form an LLC in Washington, you’ll need to register with the state. The Washington Secretary of State maintains an online database of LLC status and business information, including information on the LLC’s name, registered agent, and registered office that will be filed with the Secretary of State.
Steps to Start an LLC in Washington
1. Choose a Business Name
Before you register your LLC with the state, you’ll need to decide on a name for your business. It’s a good idea to go the extra mile and make sure it’s a name that accurately describes your business. You can search for similar names on the Washington Secretary of State’s website before choosing one that you think will work best for your new LLC.
The name you choose must end with the word “Limited Liability Company” or “LLC.” The state also requires that your business name should not include words like “Credit” or “Bank,” as well as words that are restricted by the government.
2. Appoint a Registered Agent
By Washington law, every LLC must appoint a registered agent to accept legal and tax documents on behalf of the business. The registered agent will act as the main point of contact for official correspondence regarding your business.
You can appoint an individual or a business entity to be the LLC’s registered agent. The registered agent can act on behalf of you and your LLC, but it cannot be your LLC’s member or manager. As the registered agent, they are the only individual authorized to accept legal services of processes and notices that affect your business.
3. File for Certificate of Formation
Before you can apply for an LLC, you’ll need to file for and receive your Certificate of Formation. This document will confirm that you’ve filed the appropriate paperwork with the state and have been granted authority to operate as an LLC in Washington.
The Certificate of Formation is a certificate that is issued by the Secretary of State after the issuance of your articles and bylaws. This certificate acts as proof that you have formed an LLC in Washington.
4. Create an Operating Agreement
Once you’ve filed for your Certificate of Formation, you’ll need to draft and file an operating agreement for your LLC. The operating agreement is the document that outlines how your LLC will operate and how its members will share ownership.
The operating agreement is drafted in a written manner, which should include language that clearly delineates the rights and duties of the LLC’s members. It should also include procedures for the disbursement of profits or losses, dispute resolution procedures, and management responsibilities for the CEO or managing member.
5. Apply for EIN
Once you’ve formed your LLC, you’ll also need to apply for an Employer Identification Number (EIN) from the IRS. The EIN acts as a unique identifier that will be used by the IRS and state agencies to identify your business. It will also be used on all federal tax forms and required state forms in Washington.
You can apply for an EIN online or by mailing the IRS application form and filing it with a designated IRS business location to receive your new EIN.
6. File Washington Annual Reports
The state of Washington requires LLCs to submit annual reports every year after they’ve formed. These annual reports serve as a report to the state that ensures the LLC is properly registered and continues to be active in operation.
Failure to file an annual report can result in penalties and fines, so it’s important that you keep your state up-to-date with your information and filings if you want to avoid this hassle down the line.
The process involved to start an LLC in Washington is relatively straightforward. You’ll need to fill out the necessary paperwork and file it with the Washington Secretary of State, then formally organize your business with your operating agreement. Once you’ve completed these steps, you can enjoy all of the legal protections that come with being a properly registered LLC in Washington.