Meow Technologies, Inc.
A limited liability company, commonly referred to as an LLC, is a popular business structure that combines aspects of partnerships, sole proprietorships, and corporations. LLCs provide business owners with personal liability protection like a corporation, while allowing for pass-through taxation like a partnership or sole proprietorship. This means that business profits and losses are passed through to the owners’ personal tax returns, avoiding double taxation.
Forming an LLC can be a wise choice for small business owners and entrepreneurs looking to legally establish and protect their company. The requirements for starting an LLC vary by state, but the process is fairly straightforward in Washington. This comprehensive guide will walk through the key steps for how to start an LLC in Washington state.
The first step to forming your Washington LLC is selecting an official name. There are a few important rules and guidelines to follow when naming your business:
Once you land on an available LLC name that meets requirements, you may optionally file a name reservation for $30 to secure the name for up to 180 days before formally registering your LLC.
If you plan to operate your business under a different name than your LLC's official name (known as a "Doing Business As" or DBA name), you’ll need to file for a trade name with the state after your LLC is registered.
Washington requires all LLCs to designate a registered agent, which is an individual or business that agrees to accept legal documents and service of process on behalf of your LLC. Your agent must have an in-state physical address and be available during normal business hours.
You can choose a third-party registered agent service to handle this important compliance obligation. Hiring a registered agent service can provide privacy benefits since your personal address won't be on public records.
To register your business, you must file a Certificate of Formation (articles of organization) with the Secretary of State. This form requires you to provide your LLC's name, registered agent information, business address, and executor details.
You can submit the paperwork and $200 filing fee online for faster processing that typically takes 1-2 business days. Doing it by mail costs $180 but may take longer to approve. Expedited service is available for an additional $50 fee.
Although not officially required, having an operating agreement is strongly recommended for Washington LLCs to establish financial and management guidelines in writing. This internal document outlines the ownership breakdown, distribution of profits and losses, voting rights, responsibilities, meeting procedures, buy-sell options, and more.
Putting operating rules in writing now prevents confusion down the road and gives your business more credibility as an independent entity separate from its owners.
With your LLC formally registered, there are a few more compliance items to tackle:
For both legal liability protection and tax purposes, it’s crucial to open a separate business bank account instead of commingling funds. Bring a copy of your filed formation documents, EIN, and operating agreement to the bank when applying for your business bank account.
For more information, take a look at our article on the key benefits of business checking accounts.
Congratulations, your Washington LLC is now formally registered! As part of the ongoing maintenance, you must remain compliant by:
It can be challenging tracking all the compliance tasks for a small business. Consider hiring an LLC formation service that also provides registered agent services, annual report filing, and compliance alerts to make satisfying rules and regulations effortless!
Given the various naming restrictions, paperwork, and fees involved with LLC registration, working with an online LLC formation service simplifies the process.
They also provide registered agent services, operating agreement templates, EIN assistance, and ongoing support to maintain your LLC in good standing. Formation services reduce the complexity so you can shift focus to running your growing company.
If you plan to conduct business operations outside Washington, you’ll likely need to register as a foreign LLC in those other states. The registration process is similar to forming an LLC within Washington but serves to formally recognize your original LLC.
Be sure to check each state’s foreign LLC requirements beforehand as fees and paperwork vary. Most states require submitting a foreign LLC certificate of registration and appointing an in-state registered agent.
As referenced when opening your LLC’s bank account, properly separating your business and personal finances is imperative. From accounting and tax perspectives, commingling funds can easily create issues with identifying true business profits and expenses.
It also jeopardizes your personal asset protection since piercing the LLC veil could expose personal assets to business creditors and lawsuits if boundaries are blurred. Take care to segment financing appropriately.
Forming a limited liability company enables Washington entrepreneurs to legally establish their businesses while limiting personal liability. Following the key steps outlined for starting a Washington LLC ensures you handle the necessary filings and administrative tasks smoothly.
Be diligent when naming your LLC, designating a registered agent, submitting formation paperwork, obtaining business licenses, securing an EIN, opening a bank account, and maintaining ongoing compliance. Consider enlisting help from an LLC formation service to streamline the process further.
With these foundations for success in place, you can shift your mindset from compliance to vision – namely, growing a thriving business rooted in the supportive small business network throughout Washington!