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Launching your own Limited Liability Company (LLC) in Washington State can be an exciting venture, but it’s important to be prepared for the associated costs. While the initial paperwork is just the beginning, don’t be deterred by the potential expenses.
In this comprehensive guide, we’ll break down the cost to form an LLC in Washington and show you how to navigate the financial aspects of starting your business. Plus, we’ll introduce you to valuable LLC services, like ZenBusiness, that can help you make savvy financial decisions throughout the LLC formation process.
Get ready to embark on your entrepreneurial journey without breaking the bank.
What Is the Cost of Forming an LLC in Washington?
The primary expense associated with launching an LLC is the $200 charge for submitting your LLC’s Certificate of Formation through the Washington Secretary of State’s online portal.
Here’s the LLC Cost Guide for all US States:
Washington Foreign LLC Formation Costs
If you already have an LLC that’s registered in another state and you’d like to expand your business into Washington, you’ll need to register your LLC as a foreign LLC in Washington.
The cost for registering a Washington foreign LLC is $200 online or $180 by mail. You can register a foreign LLC in Washington by filing a Foreign Registration Statement. This can also be done by mail.
Annual Cost for LLCs in Washington
Successfully maintaining a Washington LLC involves understanding and meeting various ongoing obligations and expenses related to compliance and legal status. Key among these is the annual report, a mandatory filing that updates the state on crucial LLC details such as ownership and management, with a filing fee of $60.
Additionally, appointing a registered agent, while required, does not incur a state-mandated fee, but you can opt for a professional service for an annual fee typically ranging from $100 to $300.
By fulfilling these ongoing requirements and abiding by relevant regulations, you can safeguard the legal and financial health of your Washington LLC.
How Much Does It Cost to Start an LLC in Washington With the Best LLC Service?
ZenBusiness LLC Formation Cost
The initial cost to initiate the LLC filing process in Washington starts at $200 and can vary depending on the additional services selected. Regarding processing times, the standard processing period typically takes 2 to 3 weeks.
For those in need of quicker results, there are expedited options available: expedited processing, which takes 4 to 6 days, can be obtained for an extra fee of $50, while rush processing, with a turnaround time of 1 to 2 days, is available at an additional cost of $100.
- Starter plan: The, priced at $0, offers a suitable choice for basic business formation necessities, with the additional cost of state fees.
- Pro plan: The, priced at $199 plus state fees, encompasses supplementary features like expedited filing and registered agent services.
- Premium plan: The most comprehensive of the offerings builds upon the Pro plan by incorporating unlimited Worry-Free Compliance, aiding businesses in maintaining compliance with both state and federal regulations. This extensive plan comes at a cost of $349 plus the requisite state fees.
Notably, ZenBusiness provides the added benefit of a complimentary year of Worry-Free Compliance with the purchase of any of its plans.
Additional Costs When Starting an LLC in Washington
Washington LLC Name Costs
Naming your Washington LLC incurs no charge; it’s entirely free ($0). There’s no need to engage in processes like filing a Name Reservation. You merely need to input your preferred Washington LLC name directly on the Certificate of Formation. After your filing gains approval from the state, your LLC name becomes officially established.
Should you wish to secure your chosen name in advance, you have the option to do so by filing a name reservation form and making a payment of $30, allowing you to reserve the name for up to 180 days before proceeding with the LLC formation process.
Washington Registered Agent Costs
In Washington, it’s a legal requirement to designate a registered agent when establishing your LLC, and this comes at a cost of either $0 or $125 per year, depending on your choice. Importantly, there’s no extra fee to include a registered agent on your Certificate of Formation.
A Washington registered agent serves as the recipient of legal documents and official state notices on behalf of your LLC, necessitating a physical address within the state and general availability during regular business hours.
You have the option to appoint yourself or someone you know as your LLC’s registered agent, incurring no additional charges in this case.
Alternatively, you can opt for a registered agent service, which typically ranges from $100 to $300 annually. These service providers offer various beneficial business services and can help safeguard your privacy.
Choosing a registered agent service is advisable if:
- You lack an address within the state, as Washington state law mandates that registered agents maintain a physical presence in the state
- You wish to keep your address confidential from the public record. Depending on the specific company you select, you may have the option to use their address to maintain your privacy
Washington Operating Agreement Costs
The Washington LLC Operating Agreement, which is available at no cost ($0), serves as a written agreement among the LLC Members. These agreements contain comprehensive information about LLC ownership, management protocols, and the distribution of profits.
Whether you’re running a Single-Member LLC or a Multi-Member LLC, it’s advisable to create an Operating Agreement, store it alongside your business records, and provide each Member with a copy.
It’s worth noting that many online platforms typically charge between $50 and $200 for LLC Operating Agreements.
Washington EIN Cost
An EIN Number, which is alternatively referred to as an Employer Identification Number (EIN), Federal Tax ID Number, or Federal Employer Identification Number (FEIN), serves various purposes, including income tax filing, LLC bank account setup, and employee hiring if relevant. While numerous websites may charge a service fee for obtaining an EIN for your LLC, it’s important to note that you can actually obtain it for free.
You can acquire an EIN for your Limited Liability Company directly from the Internal Revenue Service (IRS) website at no cost, and the online application process can be completed swiftly in just a matter of minutes.
Washington LLC Taxes
When it comes to Washington LLC taxes, there are several important considerations for business owners:
Federal Income Taxes
When it comes to your LLC’s federal income taxes, the Internal Revenue Service (IRS) offers various treatment options. Your Washington LLC Operating Agreement should specify how your LLC is taxed.
For Single-Member LLCs, the IRS treats them as Disregarded Entities, meaning they don’t file separate federal income tax returns. Instead, the LLC owner files and pays federal income taxes. The taxation method depends on the LLC owner: an individual owner results in taxation similar to a Sole Proprietorship, while ownership by another company leads to taxation as a branch or division of the parent company.
Multi-Member LLC Taxes
For LLCs with two or more owners, the default taxation status is that of a Partnership. These LLCs must file a 1065 Partnership Return and provide a Schedule K-1 to LLC owners, reporting each owner’s share of profits. The K-1 income “flows through” to the owners, who then pay income taxes individually using Form 1040.
Husband and Wife LLC Taxes
In community property states like Washington, a husband and wife LLC can choose to file taxes as a Single-Member LLC, also known as a Qualified Joint Venture, rather than a Multi-Member LLC. This election can be made on your EIN Application or by sending a letter to the IRS. Otherwise, a husband and wife LLC in Washington defaults to Partnership taxation.
Electing Corporate Taxation
An LLC has the option to be taxed like a Corporation instead of the default taxation methods. There are two types of corporate elections: S-Corporation and C-Corporation.
Electing S-Corporation status can benefit established businesses by reducing self-employment taxes, but this should be considered carefully. Electing C-Corporation status is less common and mainly benefits large employers in terms of healthcare fringe benefits. Consult an accountant before making these elections.
Washington State Income Tax for Washington LLCs
Washington does not impose state-level income tax on Single-Member or Multi-Member LLCs. However, specific industries and business types may be subject to other types of Washington business tax, such as the Business & Occupation (B&O) Tax. The B&O Tax is a gross receipts tax based on your LLC’s gross income, regardless of deductions.
The tax rate depends on your LLC’s business classification and is reported on the Business Excise Tax Return.
Local Income Tax for Washington LLCs
You may need to file and pay income taxes with your local municipality (town, city, county, etc.), and it’s advisable to consult an accountant for local income tax preparation and filing requirements. Contact your municipality to understand their specific tax regulations.
Washington Sales Tax
If your LLC sells products to consumers in Washington, you might need to collect sales tax and obtain a Seller’s Permit. This permit allows you to collect sales tax on retail sales and is issued by the Washington Department of Revenue. Various terms like resale license, wholesale license, or sales tax permit refer to the same thing.
Ensure compliance by referring to Washington DOR resources and consider professional assistance for tax-related matters.
Washington LLC Payroll Taxes
When your Washington LLC employs staff, you must handle payroll taxes, which include federal income tax withholding, Social Security tax, Medicare tax, federal and state unemployment taxes, and local/county deductions. Managing payroll taxes can be complex, and errors may lead to penalties.
Many businesses seek help from payroll companies or accountants to ensure accurate and compliant payroll tax handling.
Washington LLC Cost FAQs
How Much Does It Cost to Open an LLC in Washington?
Initiating a Washington LLC involves a $200 upfront fee, which covers the online filing of the LLC Certificate of Formation. If you choose to file the Certificate of Formation and Initial Report by mail, the cost is $210. Additionally, whether your LLC requires a business license in Washington depends on factors such as your industry and location, with varying costs for local business permits.
Furthermore, depending on your LLC’s activities, acquiring business insurance may also be necessary.
How Much Does an LLC in Washington Cost Per Year?
Every Washington LLC is obligated to pay an annual fee of $60 for the Annual Report, which is remitted to the Washington Secretary of State. This represents the sole mandatory yearly state fee for LLCs, essential for maintaining their active status. In addition to this, if you’ve enlisted the services of a registered agent, you will be responsible for an annual subscription fee, typically around $125.
It’s worth noting that the necessity for a business license in Washington is contingent on factors such as your industry and geographical location, and you should consult your local municipality to determine whether any annual renewal fees for the business permit apply to your LLC.
Should I Hire an LLC Formation Service?
You have the freedom to create your Washington LLC independently, without the need for a professional service company (often called an LLC formation service), which means you’ll only incur the Washington LLC filing fee and no additional service fees.
Nevertheless, for a more efficient and accurately filed LLC, we recommend considering ZenBusiness. It provides exceptional customer service and complimentary registered agent services for the first year, a feature often provided by many LLC formation companies.
Furthermore, it offers supplementary services such as an Operating Agreement and assistance with Annual Report filing.
In conclusion, the process of forming an LLC in Washington involves more than just the initial filing fee. It entails various financial considerations, including obtaining necessary documents, enlisting registered agents, and addressing essential aspects such as operating agreements and securing an EIN. Effective financial management in these areas is crucial, and this is where the expertise of LLC service providers like ZenBusiness proves invaluable.
With a clear understanding of these multifaceted costs and the support of ZenBusiness, aspiring entrepreneurs can embark on their Washington LLC journey with confidence.
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About the author
Dr. Alexander Sterling, Esq, a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. Sterling guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Alexander Sterling, Esq, is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.