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How to Form an LLC in Washington | Step-by-step Guide
Washington State, with its buzzing tech scene, airplane manufacturing giants, and everything from farms to fishing boats, makes a pretty attractive location for growing your business. If you're reading this, chances are you've moved beyond the startup days and now have a growing team to scale up.
In this guide, we'll walk you through forming your Washington LLC step by step. You'll learn exactly what to file and when, how to handle Washington's unique Business & Occupation (B&O) tax, and even tackle tricky situations like getting an Employee Identification Number (EIN) if you have international partners.
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Forming Your Washington LLC – Step-by-Step Guide
Let's break down the process into bite-sized chunks. Each step is crucial, so don't skip anything.
- Choose your LLC name: Pick something catchy that includes "LLC" and isn't too similar to existing businesses. Use the Secretary of State's search tool to check availability. Consider a federal trademark search if you're planning to scale or grow beyond state lines.
- Appoint a Registered Agent: This is your official point of contact for legal documents and government correspondence. Your registered agent must have a physical Washington address and must be available during business hours. You can serve as your agent, designate another Washington resident, or hire a professional registered agent service.
- File the Certificate of Formation: This is your LLC's birth certificate. File online ($200) or by mail ($180) with the Washington Secretary of State's office. Include your LLC name, office address, and Registered Agent info. Double-check everything to avoid delays.
- Get your Business License & UBI: After your LLC is approved, register with the Department of Revenue. This step registers your business and issues a Washington Business License and Unified Business Identifier (UBI). Costs range from $50 to $90.
- Submit the Initial Report: This filing is due within 120 days of formation and costs about $10. You'll also need to provide the names of your LLC's "Governors" (members/managers), which will make ownership information publicly available.
- Create an LLC Operating Agreement: While not required by the state, this internal document is crucial. It outlines ownership, profit-sharing, and decision-making processes.
- Obtain an EIN: This is your business's tax ID. Apply online with the Internal Revenue Service (IRS) for free. If you don't have a U.S. Social Security Number, you'll need to file by mail or fax, which takes longer.
- Open a business bank account: This step is vital in preserving your LLC’s liability protection. Compare options and choose a bank that best suits your needs, especially if your LLC has international members or owners.
Every step in the process is essential to properly establish your Limited Liability Company and ensure ongoing compliance. Double-check your information to avoid costly delays or mistakes. With these steps done, you'll be ready to move forward with your new Washington LLC.
What are the business requirements for a Washington LLC?
Operating an LLC in Washington requires ongoing compliance. Failing to meet these requirements can jeopardize the liability protection your LLC provides.
To start, your business must have a unique name that includes "LLC" or “Limited Liability Company,” as required by state law.
Appointing a Registered Agent is not a one-time task. Your LLC must maintain a registered agent with a physical Washington address. Additionally, the business or individual must be available to receive legal and government correspondence on behalf of your company.
An Initial report is due 120 days after forming your LLC. This is followed by Annual Reports with the Secretary of State every year (currently $70) and keeping your Business License current with the Department of Revenue.
Depending on your industry and location, you may also need to obtain local or specialized business licenses or permits. Many businesses are administratively dissolved because they fail to meet these ongoing compliance requirements.
What are the benefits of starting an LLC in Washington?
Choosing to structure your venture as a Washington LLC offers several compelling advantages for growing businesses seeking protection and flexibility.
Protecting Your Personal Assets
The most significant benefit is limited liability protection. Forming an LLC creates a legal distinction between your business and yourself, generally shielding your assets from business debts and lawsuits. This protection is invaluable as your business takes on more complexity.
Flexibility in Taxation
LLCs offer remarkable federal tax flexibility. By default, they utilize pass-through taxation, where profits and losses are reported on owners' returns, avoiding business-level tax. However, a Washington LLC can also elect to be taxed as an S Corporation or C Corporation if advantageous (consult a tax pro).
It's vital to understand Washington State's specific tax rules. While Washington has no state corporate or personal income tax, it does impose a Business and Occupation (B&O) tax on gross receipts.
Simpler Operations and Management
Compared to corporations, LLCs generally face fewer stringent corporate formalities regarding meetings and minutes. Washington law also allows flexibility in choosing a member-managed or manager-managed structure to suit your operational style.
Business Credibility
Operating as a formally registered business entity like an LLC often lends more credibility than operating as a sole proprietorship. Having "LLC" after your name signals a formal legal structure, enhancing trust.
Access to Washington's Business Environment
Forming your LLC in Washington grants access to the state's dynamic economy and strengths in technology, aerospace, and other sectors. Washington consistently ranks highly in national business climate surveys. The state also offers various targeted tax incentives for specific activities.
Open a Wise Business Account: Manage Your US Business Finances With Ease
Once you have established your business with an LLC in Wyoming, you’ll need a business account to manage your US finances. A Wise Business account is easy to open online and comes with no monthly fees. You can convert funds from your home currency to USD with low, transparent fees.
Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 140+ countries.
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How much does it cost to start an LLC in Washington state?
Budgeting for your LLC formation means understanding all the fees you'll face. Washington's costs are pretty straightforward, but they add up.
The main expenses come from two state agencies. First, you'll pay the Secretary of State for your Certificate of Formation—$180 by mail or $200 if you file online. The online option costs a bit more but saves you weeks of waiting. Then there's that Initial Report, which runs about $10.
Including the Business License Application, you can expect to spend approximately $260 to $300 on the essential government filings to form your LLC. This estimate does not include optional expenses like name reservation ($30) or hiring a Registered Agent service ($50 to $300 yearly).
Can I open an LLC in Washington without living there?
You absolutely can form a Washington LLC without being a Washington resident. The state doesn't care where you live—they just want to make sure they can find you if they need to.
The key requirement is having that Registered Agent with a physical Washington address. As long as you've got that covered (usually through hiring a commercial service), your location doesn't matter. You can live in California, New York, or overseas and still form a legitimate Washington LLC.
Just keep in mind that if you're physically operating in multiple states, you might need to register as a "foreign LLC" in those other locations, too.
Can a nonresident open a company in Washington?
Yes, a nonresident of the United States can form and own a Washington LLC. Washington law permits foreign individuals or entities to be members. This makes the state a viable option for international entrepreneurs establishing a U.S. presence.
However, international founders should be aware of several specific considerations. You must have a Washington Registered Agent. Obtaining an EIN likely requires using the slower Form SS-4 mail/fax process if you lack a U.S. Individual Taxpayer Identification Number (SSN) or Individual Taxpayer Identification Number (ITIN). Opening a U.S. business bank account can be complex—research modern banking solutions alongside traditional ones.
Washington LLCs vs. Other Popular States (Delaware, Wyoming, Nevada)
When deciding where to form your LLC, you might compare Washington to other popular states like Delaware, Wyoming, and Nevada. Each offers different advantages regarding fees, taxes, privacy, and legal environments.
Here’s a table comparing the differences.
| Feature | Washington | Delaware | Wyoming | Nevada |
|---|---|---|---|---|
| Formation Fee (Approx.) | ~$200 (online) | ~$90 (+ county fees possible) | ~$100 | ~$425 (incl. State Biz License) |
| Annual Fee/Tax (Approx.) | $70 (Annual Report) | $300 (Franchise Tax) | $60+ (License Tax based on assets) | ~$350 (Annual List + Biz License) |
| State Income Tax | No Corp/Personal; B&O Tax | No Personal; Corp Income Tax | No Corp/Personal | No Corp/Personal; Commerce Tax |
| Owner Privacy | Moderate (Governors Public) | Moderate (Agent public initially) | High (Nominee services common) | High (Nominee services common) |
| Legal Environment | General Business Law | Specialized Corporate Law/Court | Strong Asset Protection | Business-Friendly / Asset Protection |
| Reputation | Tech/Innovation Hub | Corporate Standard / VC Hub | Asset Protection / Low Tax | Business-Friendly / Low Tax |
Frequently Asked Questions (FAQ) about Washington LLCs
Privacy Protections for Washington LLCs
Washington offers moderate privacy. The initial Certificate of Formation doesn't list owners/managers. However, the mandatory Initial Report and subsequent Annual Reports do require listing "Governors," making this information public. Using a commercial Registered Agent protects your address for that role but not the governor listings.
Why Do People Use Washington for LLCs?
Businesses choose Washington for its strong economy, key industry clusters (tech, aerospace), skilled workforce, and Pacific Rim access. Founder location and market access within the state are also major factors. While there's no state income tax, the presence of the B&O tax is a unique characteristic.
Is a Washington LLC Tax-Free?
No, a Washington LLC is not tax-free. While there's no state corporate or personal income tax, LLCs are subject to the state's Business and Occupation (B&O) tax on gross receipts. They may also owe state sales, use, and employment taxes, plus applicable federal income and self-employment taxes.
What Are the Disadvantages of a Washington LLC?
Key disadvantages include the unique B&O Tax, which involves complexity and costs based on revenue. Additional challenges consist of multi-layered compliance requirements, such as filings at both state and local levels, mandatory public disclosure of owner and manager information, and higher initial and ongoing fees compared to operating as a sole proprietor.
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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