How to Start a Limited Liability Partnership in Washington | 2024 Guide

Start a Limited Liability Partnership in Washington

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Washington. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Washington, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Washington LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Washington, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Washington General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Washington

To form a limited liability partnership in Washington, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Certificate of Formation, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Washington, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Washington business registry. Ensure that your chosen name follows Washington naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Washington Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Washington- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Washington Secretary of State business name database and Washington Business Name Search. If the name is available, you may choose to reserve it for a specific period of 180 days by filing a name reservation application and paying the online name reservation fee of $30 and mail name reservation fee of $30. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by three methods, online, by mail, and in person filing, which costs around $24. In addition, the DBA’s validity in Washington is Indefinite, which you can file in the Washington Secretary of State.

You can check out how to file a DBA in Washington for clearer understanding.

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Step 3: Designate a Registered Agent

In Washington, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Washington Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Washington requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Washington Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Washington Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Washington laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Washington. The default laws in Washington might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Washington Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Washington Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Washington.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Washington LLP. Additionally, obtain the necessary Washington Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Washington to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Washington Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Washington, and local levels.

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Advantages of Forming a Limited Liability Partnership in Washington

While the specific advantages of forming an LLP in Washington can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Washington:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Washington.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Washington may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Washington.

Cost of Forming an LLP in Washington

The cost of forming an LLP in Washington may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Washington Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Washington instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership in Washington?
A limited liability partnership is a type of business entity formed in Washington that combines the features of a general partnership with those of a corporation.
How do I form a limited liability partnership in Washington?
You’ll need to file a registration with the Washington Secretary of State’s Corporations Division, pay the required fees, and fulfill any additional requirements set forth by the state.
What are the benefits of forming a limited liability partnership in Washington?
Limited liability partnerships in Washington offer several benefits, including reduced liability for partners, pass-through taxation, and increased flexibility in management.
Can any business form a limited liability partnership in Washington?
No, only businesses that meet certain requirements can form a limited liability partnership in Washington.
What are the qualifications for forming a limited liability partnership in Washington?
To form a limited liability partnership in Washington, you must have two or more partners, at least one of whom is a resident of the state.
How many partners can a limited liability partnership in Washington have?
There is no limit on the number of partners a Washington limited liability partnership may have.
What are the filing fees for forming a limited liability partnership in Washington?
The filing fees for forming a limited liability partnership in Washington vary depending on the type of business entity, the number of partners, and other factors.
What types of liability do partners in a Washington limited liability partnership have?
Partners in a Washington limited liability partnership have limited liability for the partnership’s debts and obligations.
How is a limited liability partnership in Washington taxed?
Limited liability partnerships in Washington are taxed as pass-through entities.
What is the difference between a general partnership and a limited liability partnership in Washington?
The primary difference is that partners in a limited liability partnership in Washington have limited liability for the partnership’s debts and obligations, while partners in a general partnership do not.
Can an individual form a limited liability partnership in Washington?
No, individuals cannot form a limited liability partnership in Washington. The business entity requires at least two partners.
How is a limited liability partnership in Washington managed?
The partners of a limited liability partnership in Washington may choose to operate the business either democratically or through appointed management.
Is there a residency requirement for partners in a Washington limited liability partnership?
No, there is no residency requirement for partners in a Washington limited liability partnership, but at least one partner must be a resident of the state.
Are there any ongoing requirements for maintaining a limited liability partnership in Washington?
Yes, Washington limited liability partnerships must file annual reports with the Secretary of State’s Corporations Division and pay an annual fee.
Can a limited liability partnership in Washington convert to another business entity?
Yes, limited liability partnerships in Washington can convert to another business entity at any time, subject to state regulations.
Where can I obtain forms for registering a limited liability partnership in Washington?
You can obtain forms for registering a limited liability partnership in Washington from the Secretary of State’s Corporations Division website.
Can a foreign limited liability partnership operate in Washington?
Yes, a foreign limited liability partnership can operate in Washington, but must register with the Secretary of State’s Corporations Division and fulfill other requirements.
What are the initial and renewal costs for an annual report in Washington?
The initial cost for filing an annual report for a limited liability partnership in Washington is $60, with a renewal cost of $110.
Should I hire a lawyer to help me form a limited liability partnership in Washington?
While hiring a lawyer is not required, it can be helpful when forming a limited liability partnership in Washington, as there are many regulations and legal nuances to consider.
Can a limited liability partnership in Washington own property and assets?
Yes, a Washington limited liability partnership can own property and assets in its own name.
How long does it take to form a limited liability partnership in Washington?
The amount of time it takes to form a limited liability partnership in Washington varies based on multiple factors, but usually takes around 4-6 weeks.
Do I need to have a registered agent for my limited liability partnership in Washington?
Yes, all limited liability partnerships in Washington must have a registered agent in the state.
How do I choose a name for my limited liability partnership in Washington?
You’ll need to make sure the name is available and not already in use, and that it meets Washington’s requirements for limited liability partnership names.
Can I change the name of my limited liability partnership in Washington after it’s been formed?
Yes, you can change the name of your limited liability partnership in Washington at any time by filing appropriate amended documents with the Secretary of State’s Corporations Division.
What are the rules for annual meetings in Washington limited liability partnerships?
Washington limited liability partnerships are not required to hold annual meetings, but partners are encouraged to hold regular meetings to discuss business operations and strategy.
How does a limited liability partnership dissolve in Washington?
Washington limited liability partnerships can be dissolved by filing appropriate documents with the Secretary of State’s Corporations Division and completing other necessary steps.
Can I form a single-member limited liability partnership in Washington?
No, Washington state law requires that there be at least two partners to form a limited liability partnership.
How do I contact the Secretary of State’s Corporations Division in Washington?
You can contact the Secretary of State’s Corporations Division in Washington at (360) 725-0377.
What is a limited liability partnership (LLP)?
A limited liability partnership is a type of business entity that offers personal liability protection to owners.
Can an LLP in Washington be formed by a single person?
No, an LLP in Washington must have at least two owners or members.
What is the filing fee for creating an LLP in Washington?
The current filing fee for forming an LLP in Washington State is $200.
Can the name of an LLP in Washington include the name of one of its owners?
Yes, an LLP in Washington can include the name of an owner in the name of the business.
Does an LLP in Washington have to file an annual report?
Yes, every LLP registered in Washington is required to file an annual report with the Secretary of State’s office.
What are the tax implications of forming an LLP in Washington?
LLPs in Washington are not taxed as a separate entity. The income and tax liability are passed through to the owners.
How do I register my LLP with the Washington Secretary of State?
You can register your LLP in Washington by filing Certificate of Limited Liability Partnership form with the Secretary of State.
Can an LLP be formed by professionals like lawyers, accountants, and doctors in Washington?
Yes, professionals like lawyers and accountants can form an LLP in Washington.
Do all members of an LLP in Washington have equal management and voting rights?
In Washington State, an LLP can create an operating agreement that outlines the allocation of management rights and voting rights.
Is there a limit to the number of partners an LLP in Washington can have?
Washington State does not have a limit on the number of partners an LLP can have.
Can non-residents of Washington State start an LLP there?
Non-residents of Washington can start an LLP in the state.
Do partners in an LLP need to be US citizens in Washington State?
Partners in an LLP in Washington State do not need to be US citizens.
Can an LLC in Washington be converted to an LLP?
Yes, an LLC can be converted to an LLP in Washington following the procedure provided by law.
Can a foreign LLP register to do business in Washington?
Yes, a foreign LLP can register to do business in Washington.
Can I operate under an assumed name as an LLP in Washington without registering a DBA?
No, you cannot operating an LLP in Washington while falsely using another business name.
Are names of other businesses protected in Washington State?
Yes, business names are usually registered and protected in Washington State.
Can I register my LLP online in Washington State?
Yes, you can register an LLP online through the Washington Secretary of State’s website.
What is an annual report for an LLP in Washington?
An annual report for an LLP in Washington contains updated business contact information and ownership details, and have an associated filing fee.
Can other types of businesses convert to an LLP in Washington?
Only businesses registered as partnerships or LLCs may be converted to LLPs in Washington.
How long does it take to get approval to start an LLP in Washington?
The Washington Secretary of State typically completes processing applications for LLP within 5-10 business days of receipt of the application.
Does an LLP in Washington have to obtain business licenses or comply with other requirements?
Each LLP in Washington needs to comply with different business licenses and impact fees requirements from the citation.
Can Washington LLP have a different purpose for each member?
Yes, each member can have different partner purposes, schedules, geographic areas, or level of fees that can be later reconciled via a resolution of necessary.
What is the legal standing of a Washington LLP owner?
In a Washington LLP, owners are known as partners and they generally do not have personal liability for business debts, claims, or other business obligations.
What is the Uniform Partnership Act Responsible for in Washington?
The Uniform Partnership Act is responsible for streamlining laws surrounding formation, operation, and management of LLPs to encourage greater use of the MLMC structure in states like Washington.
How do I dissolve an LLP Registered in Washington?
To dissolve an LLP in Washington you must first file a Termination Agreement form that satisfies all of the requirements slated by Washington state law for protecting those owed monies by and those conducting business with the incomplete LLP.
What are Registered Agents for Washington-based llp?
Many LLPs prefer having a registered agent. In this capacity, agents provides expert services as a liaison between Business, Legally Accredited Institutions, and Dissolved Bodies.
Can I register an LLP based on an illegal object basis?
No, in any U.S State, which includes Washington, expressly denies any registration or continuous conduct of LLPs or other similar business structures under illegal or fraudulent purposes/objectives.
What indemnity contributions must partners in a Washington based LLP put in?
In Washington, LLP partners do not necessarily have to contribute labors, services, or professional skill sets of equal performance/public facing dollars but pricing flexibility varies across LLC processors.
How easy is it to terminate an re-register an LLP name in the state of Washington?
Termination of an existing LLP does not involve or mitigate re-registration as a new LLP in Washington. As the existing LLP will generally be viewed to have a set history and registered status of adequacy and compliance.

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Conclusion

Starting an LLP in Washington may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Washington.

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