How to Start an LLC in Washington (7 Easy Steps!)

Are you looking to start a business in Washington? Forming a Limited Liability Company (LLC) is a popular choice for entrepreneurs in the state. An LLC is a flexible and simple business structure that offers personal liability protection and allows for pass-through taxation. We’ll explore how to open an LLC in Washington and the important things to consider when doing so.

It’s important to consider factors such as your business plan, industry-specific requirements, and local business regulations. By taking the time to properly structure and form your LLC, you can lay the foundation for a successful and protected business venture.

Three Things To Be Aware Of When Starting Your LLC

The video below covers the following three things you must know when setting up your LLC.

1. Commingling Funds
2. Registered Agent
3. Piercing the Corporate Veil

If you are unfamiliar with these terms, please watch the video below.

7 Steps to Create an LLC in Washington

Washington State offers a favorable business environment with numerous opportunities for entrepreneurs to start and grow their businesses. An LLC is a flexible business structure that offers the owner’s liability protection and allows them to keep their personal assets separate from the business assets. Here are the 7 steps you need to take to get started:

1. Choose a name for your LLC that is not already in use.
2. File your Articles of Organization with the Washington Secretary of State’s office. The Articles of Organization should include the following information:
   • The name and address of the LLC
   • The name and address of the registered agent
   • The purpose of the LLC
   • The names and addresses of the members
3. Create an operating agreement that outlines the structure, management, and ownership of the LLC.
4. Obtain any necessary business licenses and permits
5. Apply for an Employer Identification Number (EIN) from the IRS.
6. Register with the Washington Department of Revenue and obtain any necessary tax registrations.
7. Open a business bank account

Creating an LLC in Washington is a straightforward process that can be completed in a few simple steps. By following the guidelines outlined above, you can form an LLC that offers you and your partners the protection and flexibility you need to operate a successful business in the state of Washington.

Costs to Open an LLC in Washington

It’s important to understand the costs associated with forming and maintaining your LLC. Here’s a quick breakdown to help you set expectations.

1. Initial filing fee: To form an LLC in Washington, you will need to file Articles of Organization with the Secretary of State’s office. The filing fee for this is $200.
2. Registered Agent fee: You’re required to have a registered agent who can accept legal documents on behalf of the company. If you choose to hire a registered agent, you will need to pay an annual fee of around $100-$200.
3. Operating Agreement fee: While not required by law, creating an LLC operating agreement is highly recommended to ensure that the LLC is structured and run according to the wishes of its members. The cost of creating an operating agreement can vary, but you may expect to pay a few hundred dollars for a lawyer’s services or use online services for free or low-cost templates.
4. Business license and permit fees: Depending on the nature of your business, you may need to obtain certain licenses and permits from local and state authorities. These fees can vary significantly depending on your industry, location, and the type of license or permit you need.
5. Annual report fee: The state requires you to file an annual report with the Secretary of State’s office. The fee for filing an annual report is $60.

Yes there are some cost but the benefits of forming an LLC, such as limited liability protection and tax flexibility. The tax flexibility is due to the pass-through taxation status you’ll have.

This means that income from the business with flow through to your personal tax return. This makes tax prep easier and less expensive (if you’re hiring someone to file for you). You also down the line can file form 2553 with the IRS to elect to be taxed as an S-Corp. People tend to do this around $50,000 of NET income.

The reason many attorneys recommend $50,000 is because there are additional costs to maintaining an S-Corp BUT you can then payout shareholder distributions/dividends. Those distributions are not subject to the 15.3% self employment taxes. That’s where the tax savings can come in down the line.

Files needed to open an LLC in Washington

A quick list of the final documents you’ll need to get your LLC setup:

1. Articles of Organization: This is the primary legal document needed to form an LLC in Washington. It includes the name and address of the LLC, the purpose of the LLC, the name and address of the registered agent, and the names and addresses of the LLC’s members. This document can be filed online or by mail with the Washington Secretary of State’s office, and there is a $200 filing fee.
2. Operating Agreement: While not required by law, an LLC operating agreement is a crucial document that outlines the structure, management, and ownership of your LLC. It is highly recommended to have one, and it can be tailored to meet the specific needs of your business.
3. Business Licenses and Permits: Depending on the nature of your business, you may need to obtain certain licenses and permits from local and state authorities. These documents can vary depending on your industry, location, and the type of license or permit you need.
4. Employer Identification Number (EIN): You’ll need to obtain an EIN from the IRS if you plan to hire employees or open a business bank account.
5. Annual Report: Every LLC in Washington must file an annual report with the Secretary of State’s office. This report must include the LLC’s name, principal place of business, registered agent’s name and address, and names and addresses of the LLC’s mfembers.

Are Online Services worth the money?

You can bypass many of the LLC formation and maintenance steps by hiring an online service to handle things for you.

We’ve created a state specific calculator where you can get an exact dollar amount of how much it will cost you to start and maintain your LLC for 5 years in your state. You can check out that calc here or just click the image below and then select your State.

The total fees you’ll see on the calculator will include setup, annual report filing, state fees everything. The nice thing is that almost all the services out there now offer an initial base package starting at $0 plus state fee.

They’re able to offer that pricing because the services will make some money on other upsells such as registered agent, virtual mailbox services, or things such as researching licenses and permits.

Things to consider after LLC Formation

We’ve covered many aspects of formation but that’s the start of your journey.

I’d highly recommend checking out this video below which is a graphical flowchart that walks you through other things you need to consider.

For example, if you’re selling physical goods in your state then you need to setup sales tax with the state website. That’s just 1 of 21 steps broken down in the video.

My suggestion

As a business owner you’re about to wear a lot of hats. It can become overwhelming unless your strategic about where you invest.

IMO you can certainly setup and maintain your LLC yourself via the state website with this link.

However… there are services out there that have formed 100s of thousands of entities and can streamline the process for you. The reason I prefer this route is that they notify me about important dates and in a couple of clicks things are taken care of.

You should be spending your time/money on growing your business not the admin side of things. At least get educated and check out the LLC cost calculator by clicking the button below then you can make an informed decision from there.

Legal Disclaimer: This article contains general legal information, does not constitute professional legal advice for your 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.

Where do I Even Begin with Starting a Business?

I know this might sound strange but I’d highly suggest starting a relationship with Chat GPT or Gemini. That’s because those AI services store memories from your conversations and will become a business coach for you. I personally use GPT and find it extremely helpful for ideation, research and bouncing ideas. It’s not just efficency tool it’s also a business mentor that gets better with the more data you feed it.

What Type of Business Should I Start?

If you’re unsure about what type of business to start you should consider things like your skills, available time, passion, finances and risk tolerance. This post on What Business to Start is a great place to start.

What Online Formation Service Should I Use?

We’ve found Bizee to be the most reliable and transparent through the process. I’d suggest seeing how their pricing stacks up via our cost calculator. That’s the service I personally use for my formations.