LLC Cost in Washington | How Much Does It Cost to Start an LLC

Forming a Limited Liability Company (LLC) in The Evergreen State is a popular choice for entrepreneurs and small business owners who want to protect their personal assets and enjoy flexibility in their business operations. LLC formation costs vary from state to state, and it is essential to understand the costs involved in forming and maintaining an LLC in Washington. This article will overview the initial and ongoing costs of establishing and running an LLC in Washington.

If you would like to understand Washington LLC Costs and to know more about how much it costs to form an LLC in Washington, read the whole article until the end.

Webinarcare Editorial Team will help you understand how much an LLC Costs in Washington. You must be guided by all the factors gathered in this article.

Initial LLC Formation Costs

When starting a limited liability company (LLC), knowing the initial costs associated with forming and registering your new business entity is essential. Understanding and preparing for these expenses can help you budget effectively and set your Washington business on a path to success. Some common initial costs associated with forming an LLC include Certificate of Formation filing fees, Registered Agent fees, and additional services, such as business name reservation fees.

Certificate of Formation Filing Fee

The first step in forming an LLC in Washington is to file the Washington Certificate of Formation with the Washington Secretary of State. This document officially creates the LLC and includes essential information about the business, such as its name, address, and Registered Agent.

This document includes essential information about your LLC, such as:

The name of your LLC
The address of your LLC’s principal office
The name and address of your Registered Agent
The purpose of your LLC (optional in some states)

You can typically file the Certificate of Formation online, by mail, or in person. A filing fee is associated with this process, which costs around $200. You can also file by mailing it to Washington Secretary of State, which is located at Secretary of State, Corporations Division. P.O. Box 40234.

Registered Agent Fee

An LLC in Washington must designate a Registered Agent who will be responsible for receiving legal and government documents on behalf of the business. You can act as your own Registered Agent or appoint someone you know. Professional Registered Agent in Washington typically charge an annual fee ranging from $50 – $150.

In Washington, your Registered Agent must:

Be a resident of Washington or a business entity authorized to do business in the state.
Have a physical address in Washington (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business.

You can serve as your own Registered Agent or appoint a friend, family member, or professional Washington Registered Agent Services.

Business Name Reservation Fee

If you have a specific business name in mind and want to ensure it is available when you are ready to file your Certificate of Formation, you can reserve the business name with the Washington Secretary of State.

In Washington, your LLC name must:

Include the words “Limited Liability Company,” “LLC,” or “L.L.C.”
Not contain any words or phrases that are prohibited by state law
Be distinguishable from the names of other businesses registered in the state

However, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 180 days. You must file a name reservation application in the Washington Secretary of State to keep the name.

The online name reservation fee costs around $30, while the mail name reservation fee costs $30.

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing. for an easier way.

However, before filing Washington DBA, you should know that you need to renew your DBA up to Indefinite, which costs around $24

Ongoing LLC Costs

After you know the initial costs of forming an LLC in Washington, you should also know the ongoing costs once you have filed for an LLC. Here are the involved costs that you need to know.

Annual Report Filing Fee

To keep your LLC in good standing in Washington, you must file Annual Report with the Washington Secretary of State. The Annual report provides updated information about your LLC, such as changes in address, members, or Registered Agent.

In Washington, the Annual report fee costs around $60 which can be paid on 1 year (last day of the anniversary month).

Franchise Tax or Annual LLC Tax

Some states require LLCs to pay an annual franchise or LLC tax, separate from the Annual report filing fee. Franchise tax, or annual tax, is a fee imposed by Washington on businesses, including LLCs and Washington Corporations, for the privilege of operating within their jurisdiction. This tax is separate from income taxes and is usually based on factors such as the company’s net worth, assets, capital, or a fixed dollar amount, depending on the Washington’s specific tax regulations.

The franchise tax in Washington costs Washington does not have a franchise tax for LLCs.

Washington LLC Taxes To Be Paid

The State of Washington is one of those rarest states in the United States that does not levy any personal income tax on businesses. However, the business LLCs must file other taxes with the State authorities.

Washington Sales Tax

A sales tax is a government-imposed tax on the sale of goods and services. It is generally added to the price of a product or service at the point of sale and paid by the consumer. The tax is collected by the retailer or service provider, who then remits the collected tax amount to the relevant government authority. In Washington, the sales tax rate is 6.50%.

Washington State Income Tax

Considering other taxes in Washington, you should pay for the state income tax, which costs 0%; Washington has no state corporate income tax.

Washington LLC Federal Self-Employment Tax

Federal self-employment tax rates are the same across all states. Self-employment taxes are imposed on self-employed individuals or members of a Limited Liability Company (LLC) taxed as a sole proprietorship or partnership.

The self-employment tax consists of the Social Security tax and the Medicare tax. As of 2021, the self-employment tax rate is 15.3%, which consists of:

Social Security Tax: 12.4% (applied to the first $142,800 of net self-employment income in 2021)
Medicare Tax: 2.9% (applied to all net self-employment income)

Please note that these rates are subject to change, so it’s essential to consult the IRS website or a tax professional for the most up-to-date information. Additionally, some self-employed individuals may be eligible for deductions, which can reduce their taxable income and the amount of self-employment tax they owe.

Washington Property Tax

The property tax is fixed at 1.03% of industrial, commercial, residential, agricultural, and all other properties.

Business Licenses and Permits

Depending on the nature of your Washington business and the location of your operations, you may need to obtain a Business License and permits. The costs of these licenses and permits will vary based on your specific business and location. In Washington, the business license ranges from $50 – $300. However, research the requirements for your LLC in Washington and budget for these expenses accordingly.

Optional LLC Costs

Here are the optional costs you must consider if you will form an operating agreement or hire a professional service.

Operating Agreement

Although not required by law in Washington, it is highly recommended that LLCs draft an operating agreement. This document outlines the LLC’s ownership structure, management, and operating procedures. Hiring a Business Attorney to draft an operating agreement can cost anywhere from $500 to $2,000, or you can use online resources and templates to create one yourself.

However, if you are wondering how to create an operating agreement, you can check out the Operating Agreement to know and understand how it works.

Professional Services

You may hire professionals such as attorneys, Washington Accountants, or business consultants to help you establish and run your Washington LLC. These services can provide valuable expertise and guidance but come at an additional cost. Consider the potential benefits and weigh them against the costs when hiring professional assistance.

Can I Set Up an LLC For Free?

It’s impossible to set up an LLC entirely for free, as state filing fees and other costs are associated with establishing an LLC. Each state has its own fees for filing the Certificate of Formation, the primary document required for forming an LLC. These fees typically range from $50 to $500, depending on the state.

However, you can save money by handling the formation process instead of hiring a professional service. Here are some steps to help you minimize the cost of setting up an LLC:

Choose your LLC’s name and check for availability in your state. This can generally be done through the Secretary of State’s website.
Prepare and file the Certificate of Formation yourself. Washington offer an online filing option or downloadable forms on their websites. By completing this process independently, you can avoid paying additional fees for a professional service.
Act as your own Registered Agent if permitted within Washington. Washington allows the business owner to serve as the Registered Agent, saving you the cost of hiring a professional registered agent service.
Create your own Operating Agreement using online resources and templates. Although not required in every state, an Operating Agreement is highly recommended to outline your LLC’s ownership structure and management. By drafting this document yourself, you can save on legal fees.
Research and apply for any required licenses and permits on your own. Depending on your business type and location, you may need specific permits or licenses. These costs can vary, but handling the application process yourself can save you the expense of hiring a professional service.

While you can’t set up an LLC for free, taking a do-it-yourself approach and minimizing the use of professional services can help you save money during the formation process. However, handling these tasks requires time and effort, and there may be additional legal or financial risks if mistakes occur.

FAQs

What are the filing fees for registering an LLC in Washington state?

The filing fee for registering an LLC in Washington state is $180.

Are there any ongoing fees or taxes for an LLC in Washington state?

Yes, in Washington state, LLCs are required to pay an annual report fee of $60, and they must file an annual report.

Can I register my LLC online in Washington state?

Yes, you can register your LLC online through the Washington Secretary of State’s website.

Can I reserve a name for my LLC in Washington state before I register it?

Yes, you can reserve a name for your LLC in Washington state for a fee of $30.

How long does it take to register an LLC in Washington state?

LLC registration in Washington state can take anywhere from 1-5 business days, depending on the filing method and the workload of the Secretary of State’s office.

Do I need to have a registered agent for my LLC in Washington state?

Yes, you need to appoint and maintain a registered agent to receive legal documents and notices on behalf of your LLC in Washington state.

How much does a registered agent service cost in Washington state?

The cost for registered agent services in Washington state can vary, but on average, it can range from $99-150 annually.

Can I be my own registered agent in Washington state?

Yes, you can be your own registered agent for your LLC in Washington state as long as you are a resident of the state and have a physical address where you can receive legal documents.

Can two LLCs have the same name in Washington state?

No, two LLCs cannot have the same name in Washington state. You can check name availability online before registering your LLC.

Do I need to file an operating agreement for my LLC in Washington state?

Although an operating agreement is not required by law, it is highly recommended to have one in place to outline your LLC’s internal operations and procedures.

Is an LLC required to have a business license in Washington state?

Yes, LLCs in Washington state are required to have a general business license in order to operate legally.

How much does a Washington state business license cost for an LLC?

The cost for a business license in Washington state can vary depending on your location and the type of business you have, but it typically ranges from $19-95.

Do I need to pay state taxes for my LLC in Washington state?

Yes, LLCs in Washington state are subject to state and federal taxes, including state sales tax if you sell tangible goods.

Can an LLC in Washington state be taxed as an S corporation?

Yes, an LLC in Washington state can elect to be taxed as an S corporation by filing Form 2553 with the IRS.

Are there any additional fees for changing the name of my LLC in Washington state?

Yes, if you want to change the name of your LLC in Washington state, you will need to pay a fee of $30.

Can I file a paper application to register my LLC in Washington state?

Yes, you can file a paper application to register your LLC in Washington state, but it may take longer to process.

Is there a deadline for filing my LLC’s annual report in Washington state?

Yes, annual reports for LLCs in Washington state are due by the end of the anniversary month of its formation.

How much does it cost to withdraw an LLC in Washington state?

The filing fee for a Certificate of Termination in Washington state is $30.

If I already have a business registered in another state, can I register it as an LLC in Washington?

Yes, you may register your existing business as an LLC in Washington state.

Can I change the structure of my LLC from sole proprietor to multi-member in Washington state?

Yes, you can change the structure of your LLC in Washington state by filing an amendment.

Are the fees for LLC registration/filing different for non-profit LLCs in Washington state?

The fees for non-profit LLCs in Washington state are the same as for regular LLCs.

What is the minimum required capital for opening an LLC in Washington state?

There is no minimum capital required to open an LLC in Washington state.

Can I ask for expedited processing of my LLC registration in Washington state?

Yes, you can pay an additional $50 fee for Expedited Service to have your LLC registration processed in 24 hours.

Do I need to file an annual report if my LLC has no activity in Washington state?

Yes, you must still file an annual report even if your LLC has had no activity during the previous year in Washington state.

Can an LLC in Washington state be a benefit corporation?

Yes, an LLC in Washington state can also register as a benefit corporation.

Can a single member LLC in Washington state choose to be taxed as an S corporation for federal tax purposes?

Yes, a single member LLC in Washington state can elect to be taxed as an S corporation for federal tax purposes.

What is the fee for changing the registered agent for an LLC in Washington state?

The fee for changing the registered agent of an LLC in Washington state is $30.

Can I add new members to my LLC by filing an amendment in Washington state?

Yes, you can add new members to your LLC by filing an amendment to your original Articles of Organization.

Are there any penalties for not filing my LLC’s annual report on time in Washington state?

Yes, if you fail to file your LLC’s annual report on time in Washington state, you may be subject to a late fee and may eventually have your LLC dissolved.

What is an LLC in Washington?

An LLC is a legal business entity formed in Washington, allowing members to operate their company under limited liability protection.

How much does it cost to form an LLC in Washington?

The cost to form an LLC in Washington is $200, which can be paid online or by mail.

What are the annual fees for an LLC in Washington?

The annual LLC filing fee in Washington is $60.

Are there any additional fees when registering an LLC in Washington?

No, there are no additional fees when registering an LLC in Washington once the $200 registration fee is paid.

How long does it take to form an LLC in Washington?

It normally takes around 5 to 7 working days to form and register an LLC in Washington.

Can I form an LLC in Washington if I am not a resident there?

Yes, residents and non-residents can form LLCs in Washington.

Can I file for an LLC in Washington over the internet?

Yes, individuals can file for an LLC in Washington via the Secretary of State’s online registration system.

Are there any paperwork requirements for starting an LLC in Washington?

Yes, individuals are required to file Articles of Organization with the Washington Secretary of State to start an LLC in Washington.

Can I dissolve my LLC if it has no debts or outstanding legal matters?

Yes, you may dissolve your LLC if it has no debts or outstanding legal matters related to the business.

Who issues the certificate of formation for an LLC in Washington?

The Washington Secretary of State issues the certificate of formation for LLCs in Washington.

Can I reserve the name for my LLC before I form it in Washington?

Yes, you can reserve an available name for up to 180 days before forming your LLC in Washington by submitting a Name Reservation Application to the Washington Secretary of State.

What happens if someone uses my LLC name in Washington?

It is advised to trademark your LLC name to protect it, but you can also pursue legal action if someone uses your LLC name in Washington without authorization.

Am I required to use a specific format for my LLC name in Washington?

Yes, LLC names in Washington must include “Limited Liability Company” or the abbreviation “LLC” in the name.

What is a Washington registered agent, and do I need one for my LLC?

A registered agent is a person or entity that can accept legal documents on behalf of an LLC in Washington, and having a registered agent is a requirement for forming an LLC in the state.

Can I act as my own registered agent for my LLC in Washington?

Yes, you may act as your own registered agent or use a service or person who has a physical street address located in Washington.

Are there any ongoing business requirements for my LLC in Washington?

Yes, LLCs in Washington are required to file an annual report and pay an annual fee every year by the due date. The fee and due date may vary depending on the entity type.

Can I change the name or address of my LLC in Washington after forming it?

Yes, you can change your LLC’s address or legal name in Washington by filing an amendment document with the Secretary of State.

Can I apply for Washington LLC online?

Yes, you can apply for an LLC in Washington online through the Secretary of State’s website.

Are there any residency requirements for LLC registration in Washington?

No, residency rights required for the registration of LLC in Washington.

What is the first step before forming an LLC?

Before forming an LLC, individuals need to register through the Secretary of State or engage assistance from an expert to register properly.

What taxation options do I have in Washington for my LLC?

LLCs in Washington can choose S Corporation tax treatment, which enables the company to avoid tax at the corporate level.

Can I form a multi-member LLC in Washington?

Yes, you can create LLCs through complex allocating structures in Washington.

Can an LLC issue shares in Washington?

LLCs cannot issue shares in Washington, as shares of ownership are offered only by corporations on the markets.

Do you need a statement about Washington residency while applying for an LLC in the state?

There isn’t a need for a statement about residency rights while applying for an LLC in Washington.

What is the tax rate an LLC operating in Washington State?

The tax rate for an LLC operating in Washington State is somewhere between 0.4% – 1.5%.

Are there any other ongoing requirements to maintain my LLC in Washington besides annual reports?

No, just filing an annual report and paying the associated fees within the provided timeframe is an ongoing requirement.

Can I file for expedited LLC formation in Washington?

Yes, expedited LLC formation and registration services are offered in Washington, which entail additional costs.

Are there any filing fees associated with dissolving an LLC in Washington?

No, there aren’t any filing fees for dissolving an LLC in Washington. However, subscriptions and excise tax liabilities should be cleared.

Conclusion

Forming and maintaining an LLC in Washington involves various costs, including initial filing fees, ongoing annual report fees, and taxes. Understanding and planning for these costs is essential when establishing your LLC. Additionally, consider any optional expenses, such as hiring professional services or drafting an operating agreement, to ensure the success and longevity of your LLC in Washington.