Many Washington entrepreneurs choose to form a limited liability company (LLC) because of the many benefits of this business entity type. An LLC provides liability protection, for instance, so your assets are not at risk if your business is sued or cannot pay debts.
An LLC is a “pass-through entity” for tax purposes, meaning that the LLC itself is not taxed. Instead, income passes through the business to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in terms of management and taxation.
Creating an LLC is relatively straightforward, but ensuring it’s done correctly is crucial to getting your Washington business on the right foot. The most critical step is filing a certificate of formation.
What Is a Certificate of Formation for an LLC?
The certificate of formation, referred to as articles of organization in some other states, is a legal document filed with the Secretary of State to form an LLC officially. It will include your business name, address, registered agent information, and more, as detailed below.
First, Select a Registered Agent for Your State LLC
Washington requires LLCs to appoint a registered agent, a person or company authorized to accept and respond to official business correspondence, such as legal, tax, or financial documents.
The registered agent ensures all required notices and documents are received. In Washington, the registered agent can be an LLC member, individual, or entity that meets state requirements. In Washington, a registered agent must:
- Be 18 years or older
- Have a physical address in the state
- Be available during regular business hours
- Be registered to operate in the state, if it’s a business
Many business owners hire a registered agent service to ensure their LLC stays fully compliant and for convenience.
If you choose to be your registered agent, you must be at your registered agent’s address for all business hours. A registered agent service allows you to be wherever you need to be to run and grow your business.
How to Submit the Certificate of Formation in Washington
To start, visit the Secretary of State’s website and create an account to access the certificate of formation online.
In Washington, the certificate of formation requires the following information:
- UBI number
- Business name
- Period of duration
- Effective date
- Registered agent information
- Principal office information
- Return address
- Executor information
Once your account has been created, log in and select “Create or Register a Business” from the left-hand navigation menu.
On the next screen, you’ll select which type of business you’d like to form and choose limited liability company from the drop-down menu.
The following screens will prompt you to enter the information listed above, plus a governor name and address, which is another name for a manager or member of the LLC.
Lastly, you’ll enter information regarding the nature of your business and attest that you are an authorized signer for the LLC. Once your information has been entered, you can review your entries before moving to the payment screen.
You can also complete and submit a paper form if you wish to file by mail. Either way, the fee is $180, and your LLC should be approved and formed within three days if you file online and up to two weeks if you file by mail.
Some entrepreneurs hire an LLC formation service like ZenBusiness to handle this step, saving time and ensuring the process is done correctly.
Draft an Operating Agreement
Washington does not require an operating agreement, but it’s a crucial document that defines members’ ownership percentages and profit allocations. Those are the two key elements, but it should also include the following:
- Each member’s rights and responsibilities
- Management structure and roles
- Voting rights of each member
- Rules for meetings and voting
- What happens when a member sells their interest, becomes disabled, or dies
You can find operating agreement templates online, but it’s best to have them drawn up or reviewed by an attorney. The language of an operating agreement is crucial and can often help determine how member disputes will be resolved. Here you can obtain a free operating agreement template for your Washington LLC.
Contact Information for the Secretary of State
Washington Secretary of State Website
Washington Secretary of State
PO Box 40220
Olympia, WA 98504-0220
Phone: (360) 902-4151
There’s only one way to create an LLC in Washington: successfully filing a certificate of formation. If you make any mistakes, you’ll likely have to refile, so be sure to do it right the first time and set your business up for serious success!