How to Start a Business and Form Your LLC in Washington
- Washington Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important Washington Contacts
Washington Business Facts and Environment
WA Business Facts
The enterprising state of Washington – home to Microsoft and Starbucks, Amazon and Costco – was named the Top State for Business by CNBC as recently as 2017. On the whole, the nation’s largest concentration of STEM (science, technology, engineering and math) workers live in Washington state and Washington companies benefit from the sixth highest total of venture capital funding in the nation.
Major Companies Headquartered in Washington
In addition to those mentioned above, Washington is the headquarters of numerous major companies including Barrett Business Services, Nordstrom
T-Mobile, The Hotel Group and Fortive.
Startup Environment
Nearly every industry is represented in Washington with 250,000 companies either headquartered or having operations within the state. Washington entrepreneurs enjoy industry-specific tax breaks and no individual or corporate or income tax, but it should be noted that Washington does have some of the nation’s highest labor and real estate costs.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Washington, but we highly recommend you do the following before searching Washington state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.
TIP: Search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the Washington Business Entity Database. Note: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
Restrictions on Washington Business Name & Business Purpose
- Washington LLC entity names must end with either LLC or L.L.C. and cannot contain the corporate identifiers of “Corporation,” “Incorporated” or any of their abbreviations.
- Washington corporate names may be followed by several approved designations including Co., Company, Corp., Corporation, Inc., Incorporated, Limited and Ltd. The use of certain words and phrases in corporate names is “restricted” in Washington, including association, bank, banker, banking, cooperative, CPA, society or trust.
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Washington.
How to form an LLC in Washington
- In Washington state you will file the “Certificate of Formation” with the Washington Secretary of State.
- Once the articles are filed and approved by the state you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in Washington
- File the “Articles of Incorporation” with the Washington Secretary of State.
- Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
Note: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.
TIP: Check our order form to see how long Washington is currently taking to process regular and expedited orders.
How to File a DBA in Washington
- Washington trade names are registered with the Business Licensing Service. Do a search to make sure your trade name is available in the state of Washington You will then need to complete a Business License application and pay any applicable fees.
Optional Considerations when registering a Washington business
- Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in Washington?
- We specialize in registering businesses in Washington.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
Click here to view a list of our recommended banks in our Vendor Network.
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.
Step 7: Obtain Licenses and Permits
Now that you’ve registered your business name you might need to obtain a business license for your company – this authorizes your company to do business in your city or county depending on the type of service you offer. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Review our list of recommended Payroll Providers in our Vendor Network.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.
Click here to view our list of insurance providers in our Vendor Network.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it.
LLC: Washington corporations are required to file a Periodic Report with the Washington Secretary of State each year by the last day of their anniversary month, in addition to general taxation. Information on your business’ taxes can be found here.
Corporation: Corporations in Washington state are required to file an annual report each year by the last day of the month of incorporation. LLCs and Corporations will pay a filing cost of $60.
Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.
Important Washington Contacts
Washington State Secretary of State
Corporations and Charities Division (for Corporation and LLC filings)
Legislative Building
416 Sid Snyder Ave SW
Olympia, WA 98501
Phone: 360-725-0377
Washington State Taxation Departments
Washington State Labor and Employment Departments
Washington State Startup Resources
1. Small Business Administration (SBA) Washington State District Offices
The Workshops, the SBA Education and Training Center, and the SCORE Resource Center are all located at the SBA/SCORE offices in Seattle’s Belltown neighborhood at the corner of 4th Avenue and Battery Street.
2. Washington State Legal Statutes:
- Washington Business Corporation Act
- Washington State Limited Liability Companies – the specific act that applies to Washington State LLCs.
- Washington State Businesses and Professions – includes regulations on topics such as business and professions codes.
3. Washington State Chambers of Commerce
- Washington State Chamber of Commerce
- Seattle Metropolitan Chamber of Commerce
- The Office of Economic Development & Competitiveness – Washington’s Economic Development Experts
4. Washington State Angel Investors
5. Washington State Business News
6. Washington State Small Business Development Center
- The Washington Small Business Development Center (WSBDC) is a network of business advisors, trainers, and support staff who operate from Washington State University,
