Forming a Single-Member LLC in Washington | A Guide For Business Owners

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Forming a Single-Member LLC in Washington

If you would like to start an LLC in Washington, also known as The Evergreen State, there are a few things that you should consider. In Washington, putting up a single-member limited liability company (LLC) will benefit you and your business since it protects your assets, and maintain good standing. It also combines a corporation’s limited liability protection with a sole proprietorship’s simplicity and flexibility.

In this article, Webinarcare Editorial Team will walk you through the step-by-step process of forming a Single-Member LLC in Washington and provide valuable tips to help you succeed in your entrepreneurial journey.

How to Form a Single-Member LLC in Washington

Understanding Single-Member LLCs

A single-member LLC in Washington is a business entity with only one owner, also known as a member. This business structure offers several advantages, including limited liability protection, pass-through taxation, and ease of management. In Washington, single-member LLCs are subject to state-specific regulations and requirements, which may vary from other states. The formation process typically involves choosing a unique business name, registering with the Secretary of State, and completing other required steps to comply with Washington laws and regulations.

A Limited Liability Company is subject to state-specific regulations and requirements, which we will cover in this guide. Before that, we reviewed some of the Best LLC Services for you to check out.

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It is suggested that you speak with a legal professional before you begin setting up your single-member LLC. 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 for your business.

– WEBINARCARE EDITORIAL TEAM

How to Form a Single-Member LLC in Washington

To form a single-member LLC for your business, you must follow the guidelines, including research and planning, registering your single-member LLC, establishing your business operations, and maintaining compliance with Washington regulations.

Step 1: Research and Planning

Before you can form your single-member LLC in Washington, conducting thorough research and creating a solid business plan is crucial. This stage involves the following steps:

Research State-Specific Requirements

Each state has its own regulations for maintaining and forming an LLC. To ensure you comply with Washington law, familiarize yourself with the state’s LLC requirements, such as filing fees, Annual Report requirements, and ongoing compliance obligations.

Choose a Business Name

Selecting a name for your LLC is an essential part of the formation process. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Business Name Search in Washington for you to have a proper LLC business name. 

In Washington, your single-member 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

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. 

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). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA in Washington, you can file it in three methods, online, by mail, and in-person filing.

However, before filing a DBA, you should know that you need to renew your DBA, which costs around $24. You can check the availability of your desired business name by searching the Washington Secretary of State Corporations and Charities Filing System‘s website.

Recommended: Embark on your entrepreneurial journey confidently and affordably with LegalZoom’s DBA service, the beacon that guides businesses to credible branding and comprehensive compliance. Discover how effortless success can truly be!

– LegalZoom – ($99 + Filling Fees)

Determine Licensing and Permit Requirements

Depending on the nature of your business, you may need to obtain certain licenses and permits to operate legally. Research the specific requirements for your industry in Washington by consulting the state’s business licensing portal, contacting your local Chamber of Commerce, or seeking advice from Washington Business Attorney.

Create a Business Plan

A well-crafted business plan will guide your single-member LLC’s growth and success. Your business plan for your Washington single-member LLC should cover key aspects such as:

  • Executive summary
  • Company Description
  • Market Analysis
  • Competitive Analysis
  • Products and Services
  • Marketing and Sales Strategy
  • Organizational Structure
  • Financial Projections

Step 2: Registering Your Single-Member LLC

Once you have completed the initial research and planning, it’s time to register your single-member LLC with the Washington Secretary of State. Here are the steps involved:

File the Certificate of Formation

To officially form your single-member LLC in Washington, you must file the Washington Certificate of Formation with the Washington Secretary of State. 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.

Appoint a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices on behalf of your LLC. 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)

It’s essential to choose a reliable and responsible Washington Registered Agent, as failure to receive and respond to legal documents can have serious consequences for your business. 

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

Obtain an Employer Identification Number (EIN)

An EIN, also known as a Federal Tax Identification Number, is used by the Internal Revenue Service (IRS) to identify your business for tax purposes. You’ll need an EIN to open a business bank account, file taxes, and hire employees (if necessary). 

The application of an EIN in Washington 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 the 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.

In obtaining Washington EIN for your single-member LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Register Your Single-Member LLC

If your single-member LLC will collect sales tax, have employees, or be subject to certain state taxes, you may need to register with the Washington Secretary of State. Check the department’s website or consult a tax professional for specific registration requirements.

Step 3: Establishing Your Business Operations

With your single-member LLC officially registered in Washington, you can now focus on setting up the operational aspects of your business.

Open a Business Bank Account

Opening a separate bank account for your Washington single-member LLC is essential for maintaining a clear separation between your personal and business finances. This separation helps preserve the limited liability protection offered by the LLC structure. You can check out the Best Banks in Washington, which offer the best fees, services, and convenience for your business needs.

Set Up an Accounting System

Effective financial management is crucial for the success of your single-member LLC. Establish a reliable accounting system to track income, expenses, and tax obligations. You can manage your finances using spreadsheets and accounting software by becoming a CPA in Washington.

Create an Operating Agreement

Although not required by Washington law, it’s highly recommended that you create an operating agreement for your single-member LLC. This document outlines your LLC’s management structure, decision-making process, and ownership rights. A clear Washington Operating Agreement can prevent disputes and provide a framework for managing your business.

The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 4: Maintaining Compliance with Washington Regulations

Once your single-member LLC is up and running, staying informed and compliant with state regulations is essential. Here are some key ongoing requirements for LLCs in Washington:

File Annual Report

LLCs must file Annual Report with the Washington Secretary of State. This report typically includes updated information about your LLC, such as its business address, Registered Agent, and member information. 

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

Pay Required Taxes and Fees

As a single-member LLC, your business income will be subject to pass-through taxation, meaning profits and losses will be reported on your personal tax return. However, you may still be responsible for other state taxes, such as sales tax, payroll tax, or franchise tax which you can pay in Washington State Department of Revenue.

In terms of franchise tax for your single-member LLC in Washington, there is No franchise tax. Consult a tax professional to ensure you meet all your tax obligations.

Maintain Accurate and Up-to-Date Records

Keeping detailed records of your single-member LLC’s transactions, meetings, and decisions is crucial for maintaining compliance with state regulations and protecting your limited liability status. Regularly review and update your records to accurately reflect your business activities.

Cost of Forming a Single-Member LLC in Washington

Even if you have a business name and structure in mind, consider whether you can afford the costs of forming an LLC in Washington. Certificate of Formation costs around $200. The initial filing fee is $200 (online and $180 by mail), and the annual fee is $60. 

If you forget to pay the annual fee for your Washington LLC, you will have a penalty of $25. However, you can check the Washington LLC Cost for additional information. 

Advantages of Starting a Single-Member LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via single-member LLC in Washington. These advantages will help establish a single-member LLC in Washington. 

  • Limited Liability Protection: One of the primary advantages of a single-member LLC is the limited liability protection it provides to its owner. This means that the owner’s personal assets, such as their home and personal savings, are protected from the debts and liabilities of the business. In the event of a lawsuit or financial loss, only the assets owned by the LLC are at risk.
  • Pass-Through Taxation: Single-member LLCs enjoy pass-through taxation, meaning that the business profits and losses are reported on the owner’s tax return. This avoids the double taxation that traditional corporations face, where the company and the owner are taxed separately on the same income.
  • Simplified Management: Single-member LLCs have a simplified management structure compared to other business structures. The owner has full control over the business’s decision-making process and day-to-day operations without needing a board of directors or complex corporate formalities.
  • Flexibility in Business Operations: Single-member LLCs offer flexibility in terms of operational and management structures. The owner can operate the business as a sole proprietor while benefiting from an LLC’s limited liability protection.
  • Credibility: Forming a single-member LLC can enhance the credibility of your business in the eyes of potential customers, suppliers, and financial institutions. An LLC designation can make your business more professional and established than a sole proprietorship.

FAQs

What is a single-member LLC?
A single-member LLC is a limited liability company that has only one owner.
Can I open a single-member LLC in Washington?
Yes, you can form a single-member LLC in Washington.
How do I form a single-member LLC in Washington?
To form a single-member LLC in Washington, you must file organizing documents with the Washington Secretary of State and pay the required fees.
What are the organizing documents required for forming a single-member LLC in Washington?
The organizing documents required for forming a single-member LLC in Washington are the Articles of Organization and the Certificate of Formation.
Can I use a registered agent for forming a single-member LLC in Washington?
Yes, you can use a registered agent for forming a single-member LLC in Washington.
What is a registered agent, and do I need one in Washington for my single-member LLC?
A registered agent is a person or entity responsible for receiving legal and official documents on behalf of your LLC in Washington. Yes, you’ll need one within the state of Washington.
How much does it cost to form a single-member LLC in Washington?
The filing fee for the Articles of Organization in Washington is $200.
What is the Washington Business License Application, and do I need one for my single-member LLC?
The Washington Business License Application is a requirement for businesses operating in Washington state. LLCs are also required to obtain this license as soon as they begin operating in Washington.
Do I need to file my company with the Washington Department of Revenue?
Yes, if you operate a single-member LLC in Washington, then you’ll need to file your company with the Washington Department of Revenue.
What are some ongoing requirements for maintaining a single-member LLC in Washington?
Some ongoing requirements for maintaining a single-member LLC in Washington include filing annual reports and paying taxes.
Will the state of Washington tax my single-member LLC as a disregarded entity?
In Washington, a single-member LLC is typically taxed as a disregarded entity, which means any income generated by the LLC is taxed as personal income.
Do I need an EIN for my single-member LLC in Washington?
If you want to hire employees or open a business bank account for your single-member LLC in Washington, then you’ll need an EIN.
Can I hire employees for my single-member LLC in Washington?
Yes, you can hire employees for your single-member LLC in Washington.
What are some business tax requirements for a single-member LLC in Washington?
Some business tax requirements for a single-member LLC in Washington include filing state and federal tax returns, registering for state sales tax, and obtaining a business license.
What is the Washington state sales tax rate?
The Washington state sales tax rate is 6.5%, but rates can vary by county or city.
Will I need to register for state sales tax?
If your single-member LLC sells goods or services subject to sales tax in Washington, then you’ll need to register for state sales tax.
Do I need insurance for my single-member LLC in Washington?
Although Washington does not require single-member LLCs to carry insurance, it is always a smart idea to consider getting coverage to protect your business from liability.
How long does it take to form a single-member LLC in Washington?
The processing time for forming a single-member LLC in Washington varies, but online filings usually take around one day to process.
Can anyone form a single-member LLC in Washington?
Anyone who meets Washington’s legal requirements and filing fee qualifications can form a single-member LLC.
Do I need an attorney to form a single-member LLC in Washington?
No, it is not required to hire an attorney to form a single-member LLC in Washington, but some people do so for added guidance.
Can I cancel my single-member LLC in Washington?
Yes, you can cancel or dissolve your single-member LLC in Washington by filing a Certificate of Dissolution with the Washington Secretary of State.
What happens if I don’t file an annual report for my single-member LLC in Washington?
If you fail to file an annual report for your single-member LLC in Washington, your company can be administratively dissolved.
How can I change the name of my single-member LLC?
To change the name of your single-member LLC in Washington, you’ll need to file a Certificate of Amendment with the Washington Secretary of State and pay the required fees.
Can I change the structure of my LLC to a multi-member LLC in Washington?
Yes, you can change the structure of your single-member LLC to a multi-member LLC in Washington by filing a Certificate of Amendment with the Washington Secretary of State.
Can I conduct business with people or entities outside of Washington with my single-member LLC?
Yes, you can conduct business with people or entities outside of Washington with your single-member LLC.
Do I need to form a foreign LLC registration to do business outside of Washington?
If your single-member LLC does business outside of Washington and operates within another state’s jurisdiction, then you might need to form a foreign LLC registration in that state.
Do I need to publish information about my single-member LLC when I form it in Washington?
No, Washington does not require you to publicize information about your single-member LLC in any local newspaper.
What is the physical address requirement for my single-member LLC in Washington?
When you form a single-member LLC in Washington, you will need to provide a physical address, which cannot be a PO box.
Can I form a single-member LLC online in Washington?
Yes, you can form a single-member LLC online in Washington through the Secretary of State’s website.
What information do I need to file the Articles of Organization for a single-member LLC in Washington?
You will need to provide your LLC name, the members name and address, and the registered agent’s name and address.
Do I need a registered agent for my single-member LLC in Washington?
Yes, all LLCs in Washington are required to have a registered agent.
Can the owner of a single-member LLC in Washington also be the registered agent?
Yes, the owner of a single-member LLC can also be the registered agent in Washington.
Are single-member LLCs in Washington required to have an operating agreement?
No, Washington state law does not require single-member LLCs to have an operating agreement.
How can I protect my personal assets from liabilities of my single-member LLC in Washington?
By forming a single-member LLC, your personal assets are protected from business liabilities.
Can I convert my sole proprietorship into a single-member LLC in Washington?
Yes, you can convert your sole proprietorship into a single-member LLC in Washington.
Can I have more than one single-member LLC in Washington?
Yes, you can have multiple single-member LLCs in Washington.
Do I need to have a separate bank account for my single-member LLC in Washington?
Yes, it is recommended to have a separate bank account for your single-member LLC in Washington.
What taxes does a single-member LLC in Washington have to pay?
Single-member LLCs in Washington are subject to state and federal income taxes.
How does a single-member LLC in Washington pay taxes?
Single-member LLCs in Washington are taxed as disregarded entities, which means they report business profits and losses on their personal tax returns.
When is the deadline for filing taxes for a single-member LLC in Washington?
The deadline for filing taxes for a single-member LLC in Washington is April 15th.
What deductions can a single-member LLC in Washington take on their taxes?
Single-member LLCs in Washington can take deductions for expenses related to their business operations.
Is a single-member LLC in Washington required to file an annual report?
Yes, single-member LLCs in Washington are required to file an annual report with the Secretary of State.
When is the deadline for filing an annual report for a single-member LLC in Washington?
The deadline for filing an annual report for a single-member LLC in Washington is March 31st.
What are the penalties for not filing the annual report on time for a single-member LLC in Washington?
Late penalties for failing to file an annual report for a single-member LLC in Washington start at $10 after the first day late and increase every week.
Can I dissolve my single-member LLC in Washington?
Yes, you can dissolve your single-member LLC in Washington at any time.
How much does it cost to dissolve a single-member LLC in Washington?
The fee to dissolve a single-member LLC in Washington is $25.
Can I reinstate my single-member LLC in Washington if I dissolved it?
Yes, you can reinstate your single-member LLC in Washington if you dissolved it.
Will my dissolved single-member LLC in Washington continue to be subject to taxes?
Yes, your dissolved single-member LLC in Washington will continue to be subject to taxes.
How do I change the name of my single-member LLC in Washington?
To change the name of your single-member LLC in Washington, file Amended Articles of Organization with the Secretary of State.
Are there any restrictions on choosing the name of my single-member LLC in Washington?
Yes, your single-member LLC name in Washington must be unique and not conflict with any other business name registered with the state.
Can I change the member of my single-member LLC in Washington?
Yes, you can change the member of your single-member LLC in Washington by filing an amendment to its Articles of Organization.
Can a single-member LLC in Washington hire employees?
Yes, a single-member LLC in Washington can hire employees.
What kind of permits and licenses does my single-member LLC in Washington need to operate?
The kind of permits and licenses required for a single-member LLC in Washington depend on the type of business the LLC operates.

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Conclusion

Starting a single-member LLC in Washington can be a rewarding experience that offers numerous benefits for entrepreneurs. By following this guide and staying informed about state regulations, you can successfully navigate the formation process and set your new business up for success. Feel free to seek professional assistance from a lawyer or accountant if you have questions or need help. Your journey as a business owner has just begun – embrace the challenges and enjoy the rewards of your hard work and determination.

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