You have a big idea, truckloads of ambition, and dreams of a thriving Washington LLC, and you’re mentally prepared to make it happen.
But the Chinese philosopher Lao Tzu once said, “a journey of a thousand miles begins with a single step,” and for you, that first step is filing the Certificate of Formation.
With such grand plans, the last thing you might want to do is file paperwork, but completing the Certificate of Formation is what authenticates your LLC, making it official in Washington. It’s perhaps the most important step in starting your Washington LLC. Following this guide will help take the tedium out of paperwork and get your business started quickly.
But before you dive into the Certificate of Formation, you should have a few pieces of information ready to help streamline the process.
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Choosing an LLC Name
Before anything else, you will need to decide on an LLC name. You must include a business name on your Certificate of Formation, and if the Secretary of State deems that name unacceptable or unavailable, the document will be rejected, so make sure you nail down a good name right away.
Be sure to choose a name that adheres to Washington’s business name requirements. According to the Washington Revised Code, Section 23.95.305, this means that it must contain the words “limited liability company,” the words “limited liability co.,” or the abbreviations “L.L.C.” or “LLC,” and not use designators for other business types, like “cooperative,” “partnership,” “corporation,” “incorporated,” or any abbreviation thereof.
Finally, your name should be unique and distinguishable among all other businesses on record in Washington. Don’t know if someone’s already using your name? Search for it with the Secretary of State’s Corporation Search tool to see if anyone beat you to it.
Once you’ve found your perfect name, include it on your Certificate of Formation to automatically register it. In the event that you’re not quite ready to file an LLC, you can place a 180-day hold on your name by submitting a name reservation request.
Choosing a Washington Registered Agent
A registered agent is your LLC’s liaison to the state, the mediator who takes care of all your important legal, tax, and compliance documents, keeping your business in good standing. Have an agent lined up before you file the Certificate of Formation. You’re required to include their information on the application, including a signature from the agent, consenting to the appointment.
Don’t list an agent on your Certificate of Formation, though, without confirming that they are a Washington resident with a physical address in the state (no P.O. boxes) or a company that’s been authorized to do business in Washington. If you list an invalid registered agent, your document will be rejected.
Your registered agent can be either an individual or a business entity like a registered agent service, as long as they adhere to the guidelines above.
Quick Note: If your first choice doesn’t work out, don’t worry. You can always change your registered agent in the future.
Preparing to File Your Washington Certificate of Formation
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Now for the main event: the Certificate of Formation. Here’s your opportunity to get your LLC officially on record and authorized to conduct business in Washington.
Considering the Certificate of Formation’s weight and importance, it’s surprisingly not particularly long or complicated. Collect all the necessary information beforehand and you’ll fly right through it. Here’s what you’ll need:
- UBI number (if applicable)
- LLC name
- Name reservation number (if applicable)
- Period of duration (perpetual or expiration date)
- LLC effective date (can be up to 90 days following the filing)
- Registered agent name, phone number, email address, street address, mailing address, and signature
- Principal office address
- Mailing address (optional)
- LLC phone number and email address (optional)
- Return address for the filing (optional)
- Executor name, address, title, and signature
Get that checkbook or credit card ready, because the Certificate of Formation costs $180 for a hard copy and $200 for online processing.
Filing online might be slightly more expensive, but it’s also faster. Online forms are processed in 3-5 days compared to two weeks for hard copy submissions. You can expedite hard copy filings by paying an additional $50 fee and writing “expedite” on the envelope. This will turn around mailed forms in two days and hand-delivered forms in one.
There are two filing options for the Certificate of Formation: online and using a hard copy, and they both have their own benefits.
This is the quicker and, quite frankly, easier option. Just create an account with the Washington Corporations Filing System, then choose the appropriate form and follow the instructions. At $200, it’s just a little more expensive, but the additional $20 is well worth the expediency and ease.
Hard Copy Filing
A paper application, however, is just as effective and still pretty simple. When you’re finished with the form, include your $180 payment and mail or hand-deliver it to:
Secretary of State
801 Capitol Way S
P.O. Box 40234
Olympia, WA 98504-0234
Once your Certificate of Formation has been processed, take a second to celebrate, because your LLC is officially on the record in Washington.
Don’t let the celebration get too out of hand though, because you still have responsibilities with your new LLC. Washington requires all LLCs to file initial reports within 120 days of formation. You can simply include this report with your Certificate of Formation, which is by far the most convenient option. The state won’t even charge you the $10 filing fee for your initial report if you file it while forming your business.
Whether you file it immediately or you wait the full 120 days, the initial report requires the following information: the LLC’s name, UBI number, principal office address, mailing address (optional), name of each governing member, the nature of your LLC’s business, and the printed name, title, and signature of your LLC’s authorized person.
What About Foreign LLCs?
The process outlined above works for domestic LLCs (those formed in Washington), but if your business is expanding to Washington from another state, you won’t need to file the Certificate of Formation.
Rather, your LLC will need to foreign qualify by filing a Foreign Registration Statement either online or with a hard copy. This form carries the exact same filing fees as the Certificate of Formation: $180 for hard-copy filings or $200 for online submissions. Don’t try to start doing business in Washington without first foreign qualifying, or you could run into some severe fines and penalties.
But once you’ve successfully filed your Foreign Registration Statement, your LLC has the authority to begin doing business in the state.
Want Help Filing Your Certificate of Formation?
Let’s be honest: you’ve got a lot on your plate. Filing paperwork can take time away from your other tasks, ones more focused on setting your budding LLC up for success.
The good news is that you don’t need to file the Certificate of Formation yourself. But if an attorney is out of your price range, hiring an LLC creation service is a great option.
There’s no shortage of business incorporation services out there, but not all of them are equal. Each one offers different packages, costs, and processing times, so it’s important to find the right fit for your LLC.
While each service has optional upgrades and feature packages, on the most basic level, they will review your business information, prepare your formation documents, and submit them to the Washington Secretary of State. They will complete everything outlined in this guide and notify you when your Certificate of Formation has been filed. You won’t have to lift a finger.
There are other benefits too. Some services will include a year of free registered agent service when you hire them. Other services offer order tracking, notifications on future documents (like annual reports), assistance drafting your operating agreement, or coverage of certain LLC formation costs.
Important Post-Formation Compliance Issues
Once you’ve successfully filed your Certificate of Formation, your LLC is an official business entity in the state of Washington. However, this doesn’t mean that your responsibilities have come to an end. There are several other steps you’ll need to take if you want to operate a compliant LLC for years to come.
Acquire a Federal Tax ID Number (EIN)
While an EIN isn’t a requirement for Washington LLCs, we strongly recommend that every entrepreneur obtains one. An EIN enables your LLC to hire employees, open business bank accounts, file taxes, and take care of several other important aspects of LLC maintenance. Even if you operate a single-member LLC with no employees, you should still have an EIN for your business.
Set Up a Financial Infrastructure
One other crucial step is to solidify the financial aspects of your LLC, first by opening a business bank account. You must have separate bank accounts for your personal use and for business purposes, as this will help you keep your personal and business assets separate, a vitally important consideration for any entrepreneur. If you commingle these assets, you leave yourself wide open for lawsuits, as it would be easy for someone to claim that your business is simply an extension of your own personality and not a separate entity from you as a person.
The other portion of this step is to set up an accounting system. This can either mean that you hire an accountant to take care of your LLC’s bookkeeping, or you could acquire high-quality accounting software like QuickBooks. Either way, you need a reliable means of keeping detailed records for each financial transaction your LLC executes. This is another vital part of keeping your personal and business assets separated, and it will also be enormously helpful come tax time.
Acquire Licenses and Permits
The next step involves obtaining any industry-specific licenses and permits your LLC may need to operate in compliance with state laws. Depending on the nature of your LLC’s business, you may require several permits or you may be able to operate your LLC without any state-level licenses.
Thankfully, Washington makes it very easy to figure out your business’ licensing needs. All you need to do is visit the state’s business license application page and you’ll find the license and permit applications you require. Make sure to check with your county and locality as well, as there may also be licensing requirements for your business on these levels.
Obtain Business Insurance
This step isn’t a requirement, but it is a strong recommendation. The exact insurance policies your business needs will vary based on the type of products and services you offer, but most LLCs should at least have a general liability insurance policy to protect against common perils like slip-and-fall accidents. In some industries, you might need several different insurance policies to cover all of your financial bases, so do your research ahead of time to determine which types of insurance you should purchase.
File Your Annual Reports
Each year, every LLC in Washington must file an annual report. This report includes some basic information about your business and keeps the state updated regarding any important changes to your LLC’s structure. The information you’ll need to file this report typically includes your LLC’s name, UBI number, principal office address, member or manager names, the nature of your business, and registered agent name and address.
Frequently Asked Questions
About Filing the Washington LLC Certificate of Formation
How long does it take Washington to form an LLC?
Online forms are processed in 3-5 days compared to two weeks for hard copy submissions. You can expedite hard copy filings by paying an additional $50 fee and writing “expedite” on the envelope. This will turn around mailed forms in two days and hand-delivered forms in one.
Should I file my own Certificate of Formation, hire an attorney, or use an online service?
This question largely comes down to personal preferences, but we do have some general insights. The DIY route can be quite a bit of work, as you’ll need to complete each step of the formation process on your own with no assistance. As for hiring an attorney, this can be prohibitively expensive for new businesses, as a lawyer can charge hundreds or even thousands of dollars to form your LLC.
You can think of business services companies as a middle ground between these options. While most of these companies charge a fee to form your LLC, that fee will be significantly less expensive than an attorney’s fee. At the same time, you still aren’t going it alone. Instead, you have an experienced professional guiding you through the entire process.
What does Washington require for LLC formations other than the Certificate of Formation?
Every LLC in the state of Washington must file an initial report within 120 days of the state confirming the formation. The easiest method is to simply attach your initial report to your Certificate of Formation at no extra charge. However, if you’d rather file these documents separately, you can file your initial report at any time in those first 120 days, as long as you attach a $10 filing fee.
How many small businesses are there in Washington?
Today, Washington has more than 630,000 small businesses. Clearly, entrepreneurs in many different fields find Washington to be a great place to own and operate a business entity.
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