Creating an LLC may sound stressful, but most states make it relatively easy to start this type of business and conform to local rules and regulations.

Getting Started

Naming the LLC

Choosing a name for an LLC in Washington requires a search to be sure no one else is using that name. If the name is already in use, the business owner will have to choose something else as a company name. No matter what is chosen, the words “Limited Liability Company,” or the  “LLC” or L.L.C.” abbreviation must be present as part of the company’s official name. If there are any restricted words that the owner wants to use, additional paperwork must be filed as a request to use those words. There are some words that are prohibited, including any that are being used by state of federal agencies.

Another issue to check on when naming an LLC is whether the domain name is available. Companies generally want the domain name that matches their company name, but that is not always possible if someone in another state or even in another country is using that domain for their own business or personal interests. In some cases a domain name can be purchased by negotiating with a company that already has it, but exploring these types of issues before securing a company name with Washington State can be a good idea for any LLC.

Selecting a Registered/Statutory Agent

A registered agent is a third party that is designated to receive official correspondence for an LLC. This is often used when the owners of the LLC do not live in the state where the company has its headquarters or where it was incorporated. For example, if two people from Oregon create an LLC in Washington, but they do not have a physical presence there, they need a Washington-based registered agent to accept correspondence for them. Even for those who live in the same state where their LLC was created, a registered agent is a good idea to ensure that someone is always available for official correspondence matters.

Anyone can be designated as a registered agent in Washington State as long as they are a legal adult and a legal resident of that state. People who have second homes there but live elsewhere, those who do not have a permanent residence in Washington State, and those who are underage are not eligible to serve as registered agents for any Washington based LLC.

Filing Articles of Organization

The articles of organization can be filed online. The fee is $180, and if the process must be expedited the fee is an additional $230.

Creating an Operating Agreement

Creating an LLC in Washington State is made easier by the fact that an operating agreement is not required. While some states do have this particular requirement, Washington has not chosen to make it part of the process for creating an LLC in that state.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

Setting Up for Taxes in Washington State

If the LLC has employees, it must register for Unemployment Insurance tax. Any business that offers taxable goods or services must also register for Sales Tax. Additionally, all businesses must register for B&O, which is Business and Occupation Tax. Businesses must be mindful of any federal, state, and local permits they also need to register for, such as health permits, based on the type of business their LLC is and what it sells to the public.

Insurance Requirements

Workers’ Compensation is required for an LLC in the state of Washington. How much insurance is required will depend on the nature and size of the business. As employees are added to the business, the LLC must check each employee and only hire those who are eligible to work within the United States. These employees are then reported to the state as “new hires,” and the LLC must provide workers’ compensation insurance, withhold income tax, give increments to employees, and print compliance posters.

Keeping An LLC Compliant

Each LLC in Washington State must file an annual report with the Secretary of State. It is due on the last date of the LLC’s formation month every year, but the first report must be filed within 120 days of the date the LLC was formed. Paper filing fees are $250, while online filing fees are $300. A Certificate of Good Standing can be requested online. The fee is $20.

How to File a Foreign LLC in Washington State

Filing for a foreign LLC in Washington can be done online for a fee of $200. It can also be done with a paper filing, for a fee of $180. Both options are acceptable for filing, depending on the company’s preference. While most companies file online, not every company chooses this option.