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Starting a business in Washington takes 7 steps:
- Choose a name for your business
- Choose the right type of business entity
- Register your business with the Washington Secretary of State
- Get your Federal Tax ID Number
- Open a bank account and get a debit/credit card
- Get a state business license
- Register with the Washington Department of Revenue
We’ll show you how to complete each step. We will also give you some tips to make starting your business in Washington easier.
Step 1: Choose a Name for Your Business
Choosing a name for your Washington business is not something you want to breeze through. In fact, rushing the process of choosing your business name can be a big mistake.
You should take some time to choose a name people will remember and associate with your business.
To make sure your business is worth remembering, you should choose a name that:
- rhymes or contains alliteration (ex: Piggly Wiggly, Dunkin’ Donuts)
- speaks about the benefits of your business
- you can say with pride
- is easy to pronounce and spell
- has a positive connotation for your potential customers
- is available as a “.com” domain name
By the way, the first bullet point above refers to the phonological loop. Your brain can better remember words that rhyme and sound similar. For additional steps and some good business naming “hacks”, check out how to choose a good LLC name.
After you’ve selected your business name, you should search it on the Washington Database to see if it’s available.
Bonus Tip on Searching for a Good Domain Name: Check out TRUIC’s Business Name Generator for great domain name ideas. Just type in keywords relevant to your business, and the tool will come out with a list of suitable domain names.
Check out our Business Domain Name Guide for tips on picking a domain name and a step-by-step guide to buying the domain name through GoDaddy.
Step 2: Choose the Right Type of Business Entity
Next, you’ll need to decide the best type of legal structure for your Washington business.
The most common are a Sole Proprietorship, Partnership, Corporation, or Limited Liability Company (LLC).
Sole Proprietorships
A Sole Proprietorship begins to exist when you operate your business as yourself. There is no separate legal entity created; the law treats you and your business as one person.
Partnerships
A Partnership is the same as a Sole Proprietorship, just with 2 or more people. Like a Sole Proprietorship, a Partnership doesn’t create a separate legal entity.
Corporations
A Corporation is a more complex legal structure usually created to run large businesses. (Think of technology and startup companies.)
Unlike a Sole Proprietorship, a Corporation is a separate legal entity. It provides liability protection for its owners (called shareholders).
LLCs
An LLC is a hybrid entity that combines the benefits of a Corporation and a Sole Proprietorship:
- Personal Liability Protection
- Pass-through Taxation
Like a Corporation, an LLC is a separate legal entity under the law, and it provides personal liability protection. This means that if your LLC gets sued, your personal assets are protected.
Unlike a Corporation, your LLC isn’t subject to double taxation. Instead, an LLC has pass-through taxation (like a Sole Proprietorship). Meaning, your LLC’s profits will “flow through” to your personal tax return.
If you want to learn more about LLCs vs. Corporation, check out this video.
When you’re ready to start an LLC, you can follow our step-by-step instructions on how to form an LLC in Washington. Or, you can hire an LLC service to file for you.
If you want to form a Corporation in Colorado, you can file it yourself, or you can hire a filing company.
Step 3: Register Your Business Entity with the WA Secretary of State
You’ll need to file your business’s formation documents with the Washington Secretary of State.
If you’re forming a Washington State LLC:
The filing fee is $180 (by mail) or $200 (online), and the document filed is called the Certificate of Formation.
Check out Washington LLC Cost for more information about LLC fees.
If you’re forming a Washington State Corporation:
The filing fee is also $180 (by mail) or $200 (online), and the document filed is called the Articles of Incorporation.
If operating as a Sole Proprietorship or Partnership in Washington:
You don’t have to register with the Washington Secretary of State. Instead, you will just obtain a state business license. See Step #6.
If you’re going to register a DBA (“doing business as”), which is called a Trade name in Washington, that will cost $5. You can reference the Trade name FAQs for when a Trade name would be needed.
If you have any questions, you can contact the Washington Secretary of State or Business License Services.
Secretary of State (SOS)
Phone: 360-725-0377
Email: corps@sos.wa.gov
Website
Business License Services (BLS)
Phone: 800-451-7985
Email: BLS@dor.wa.gov
Website
Step 4: Get your Federal Tax ID Number
A Federal Tax ID Number, also known as an Employer Identification Number (EIN), is used by the IRS to identify your Washington business for tax purposes. Think of your EIN as your Washington business’s “social security number”.
Your EIN is used to open a business bank account, file taxes, get financing, and handle employee payroll (if applicable).
You can get your business’s EIN by mail, by fax, or online. Getting your EIN online is the fastest option.
You can access the online application here: EIN Application.
For instructions on how to complete the EIN application for a Washington LLC, please see the video on our Washington LLC EIN Number page.
Step 5: Open a Business Bank Account
A separate business bank account and debit/credit card for your Washington business is important because:
- your personal assets are kept separate from your business assets
- accounting and finances will be easier to manage
One of the main reasons courts are able to “pierce the corporate veil” is due to commingling of assets. This is when business and personal finances are mixed together.
Keeping your Washington business’s assets separate from your personal assets also helps keep clean records.
To learn how to open a bank account for your Washington state LLC, you can read this lesson: LLC business bank account.
Your bank will provide a debit card after the account is open. For additional credit and to earn cash back (or other rewards), you can also get a business credit card.
Step 6: Business License & Permits
State Business License
Washington has a state-level business license that you’re required to get from the Washington Business Licensing Service (BLS). This statewide business license is sometimes referred to as a “master business license” in Washington state. This registration helps notify all the applicable state agencies about your business.
After you start/form your business in Washington you can get your state business license online from the BLS online filing page. Or, you can get your LLC’s license via paper filing.
You can read more about the state-level business license from the Washington BLS: Business License FAQs.
City, town, and local-level
In addition to the state-level business license, you may also need to get a local business license from your city or town.
Whether or not you need a local license depends on the city or town where you do business, and what type of business activity you engage in.
Some cities in Washington are part of a program that lets business owners apply for their City Business License and State Business License together in one process.
If your city isn’t in this list of participating cities, you will need to contact your city directly to see if your WA business is required to get any city-level licenses or registrations.
Additional resources
The Washington State Department of Licensing has two helpful pages with information: business and professional licenses and a list of all licenses.
The Municipal Research and Services Center (MRSC) has a list of cities in Washington and a list of counties in Washington. You can then get in touch with your local municipality to see what your business’s license and permit requirements are in your area or for your type of business.
And the Washington Business Hub has information on licenses and permits:
Business.WA.gov: Small Business Guidance (Open Your Business)
If you need some help:
If you want some help, and want to save time, when researching your business and/or permit requirements for your city or town, you can hire our licensing partner, IncFile. They’ll do the research for you. Just fill out their 1-minute questionnaire to get started.
Step 7: Register with the Washington Department of Revenue
Good news! Washington doesn’t have a state income tax.
That said, Washington state does impose a Business and Occupation (B&O) tax. The B&O tax is based off the gross income of your business, and pretty much every type of business in Washington state is subject to this tax. That means Sole Proprietorships, Partnerships, Corporations, and LLCs.
So after your business is formed in Washington, you’ll need to register with the Washington Department of Revenue.
If you applied for your Washington State Business License through BLS (as mentioned in the prior step), then that system will automatically register you with the Department of Revenue.
There is also a local-level B&O tax which varies by city and town.
And if your Washington business will sell tangible property, you’ll also need to collect and pay sales and use tax. Some service-based businesses must pay sales tax too, as listed on the state’s business tax structure page.
We recommend reading tax classifications for common business activities.
We also recommend speaking with an accountant to make sure you properly file all federal, state, and local tax returns.
For further questions, you can also contact the Washington Department of Revenue.
After Your Washington Business is Started…
1. Meet with a Local Washington Expert for Free Consulting
Getting advice from others who’ve been there can be helpful in your entrepreneurial journey.
Here are some great organizations in Washington:
- Washington SBDC Consulting
- SCORE (offices in Bellingham, Seattle, Spokane, Vancouver and other WA cities)
- Department of Commerce’s Grow Business
2. Start a Website
Having a website these days is very helpful for your Washington small business. It gives your company a professional feel and allows people to learn about your products and services.
Building a website can seem like a complicated process… and it will be if you don’t have the right information.
However, I’ve built over 130 websites and used to teach people how to use WordPress to build their website. WordPress (which is free) is the tool I use and recommend. It can be used to build simple websites and it can be used to build more complicated websites.
There are 4 components to starting a website:
- Domain registrar
- Website Hosting
- WordPress
- WordPress theme
Let’s use the housing analogy…
The domain registrar is where you purchase your domain name. Think of this as the label on the mailbox or your street address.
A website hosting company is where all the code, images, graphics, and text are stored that gets provided to the world. Think of this as the foundation of your home. It gives you the ability to build on top of it and display information to others.
WordPress is a CMS (content management system) which makes it easy to build a website. Rather than constructing your home from scratch, think of WordPress as a prefabricated home where you can easily resize rooms, move walls, and have complete flexibility in design and customization. WordPress – or the prefabricated home – “sits on top of” your foundation (the website hosting).
A WordPress theme is a design skin that sits “on top of” the WordPress CMS. If the WordPress CMS is the prefabricated home, think of the theme as all the interior decorations and painting.
There are free WordPress themes, but I recommend against them for various technical reasons. Instead, I recommend using a premium WordPress theme. The difference between a free WordPress theme and a premium one is the difference between an amateur designer and a world-class professional designer.
Here are some links and prices to get you started:
Domain registrar: I recommend NameSilo.com which is $10 per year (per domain name). This is the service we use as it includes domain privacy for free to keep your address and phone number off those pesky public record websites. It’ll also help prevent those annoying telemarketers!
Website hosting: SiteGround.com ($10 per month)
WordPress: This is automatically included (again, for free) with nearly every hosting company these days. After you sign up with SiteGround, just call them to help you install it. They’ll walk you through the steps.
WordPress theme: ThemeForest.net (one-time fee of $40 to $60)
Note: Make sure you’re using the “wordpress.org” self-hosted version. Not the “wordpress.com” version, which is stripped down and comes with limitations on how much you can customize your website.
If you need help selecting a theme from ThemeForest, check out this video I made:
3. Design a Logo and Get Business Cards
Designing a logo doesn’t have to be too complicated.
We recommend starting off with a “words only” logo to keep things simple. You can choose the font family and color yourself, or get help from 99 Designs. A cheaper option is to use Fiverr.
For some great tips on using a tagline with your logo, check out Neville Medhora’s article.
And for business cards, I like using Moo.com.
4. Get a Business Phone Number
Instead of giving out your actual cell phone number (or home telephone number), we recommend getting a “virtual business number” for your Washington business. You’ll be able to customize the number so it forwards to your cell phone.
Our favorite company is Phone.com. They have the cheapest plans and the best customer support.
You can get a local Washington telephone number or you can get a 1-800 number for your business. Phone.com lets you easily setup call forwarding to any number you like, create pre-recorded messages, and you can even get your voicemails sent right to your email.
Getting a separate phone number for your Washington business is also a good idea if you’d like to keep your actual phone number off of those annoying “public record” websites (and stop the spam phone calls).
I hope this guide has been helpful for you.
References
Washington Department of Revenue
Washington Code, Section 458-02-200
Washington State Small Business Guide
Business.WA.gov: Small Business Guidance (Start)
Washington Department of Revenue: Local Offices
Washington Department of Revenue: Business Ownership Structures
Washington Department of Revenue: Business Tax Structure in Washington State
Washington Department of Revenue: Tax Classifications for Common Business Activities
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
I have planned to start new business in Seattle but I am not sure which license will be good for new business, Sole Proprietorship or LLC. If you could help me and give me info plz.
Hi Noory, sure thing. We’ve covered that here: LLC vs Sole Proprietorship.
Hi,
I started a Washington LLC that my fiance will be mostly running and doing the work for, turning it from a one-person LLC into multi-member LLC. I was the initial person to sign up for it because he went out of town for a few months and I was doing all of the initial setup so we figured it would be easier for me to run everything and not have to try to contact him while I was working through admin parts of it. We are now at the point where I want to get a credit card for the business but haven’t yet added him on as a member.
My questions are:
-If I sign up for a credit card for the business without him and then later add him on as an owner, are there legal issues with that? Would I just need to contact the bank with the update?
-Do we have to get a new EIN once it’s both of us?
-What is the process to add him on as a member to the LLC other than doing a new operating agreement? I have been unable to find this or the forms from the state of WA anywhere.
-Do any of those answers change if he takes over the LLC eventually or would they be the same procedures?
Thank you for this website! This has been the most helpful website I’ve found regarding this topic in all of my searching in the past year!!
Hi Amanda, thank you for the kind words! In order to add your husband to the LLC, you need to transfer/assign some of your LLC membership interest to him (since you currently own 100%).
1. This can be done via an Assignment of LLC Membership Interest form (we currently don’t provide this).
2. In the new Operating Agreement, at the top (for the “title”), change it to “1st Amended and Restated Operating Agreement of My Company LLC”. And you’ll need some text (somewhere in the new Operating Agreement) along the lines of the following: “This Operating Agreement completely amends, restates and supersedes the Original Operating Agreement and each of its predecessor agreements.”
3. To add your husband as a Governor on the Washington LLC Certificate of Formation form, you’ll need to file a Certificate of Amendment. That can be found on this page: WA Corporations Division: LLC forms.
4. There are no legal issues with the credit card you currently have. And there will be no changes you need to make after adding your husband. If anything, he can get a business credit card with the LLC name + his name on it, if needed.
5. You don’t need a new EIN, since only one person needs to be the EIN Responsible Party.
6. However, you will need to file Form 8832 with the IRS to change the LLC’s tax classification from an LLC taxed as a Sole Proprietorship to an LLC taxed as a Partnership. Here are the instructions (at the time of this reply):
• Enter the LLC name, its EIN, and the LLC’s address at the top
• 1: B
• 2A: No
• 2B: Skip/leave blank
• 3: Yes
• 4: Skip/leave blank
• 5a: N/A
• 5b: N/A
• 6: B (A domestic eligible entity electing to be classified as a partnership)
• 7: Skip/leave blank
• 8: The date the new Member was added (the date they received their ownership interest)
• 9: Enter your name and title (use “Partner”)
• 10: Enter your phone number
• Consent statement and signature: You can both sign and date the form (use “Partner” for each person’s title)
• Part II (Late Election Relief): Skip/leave blank
You’ll also want to:
7. Visit the bank and add your husband as a signer.
8. Update your LLC State Business License via MyDOR (which should update the Washington Department of Revenue and any other necessary government agency) about the new LLC Member. You may want to call them for more specific instructions. Here is some information: WA Department of Revenue: Update my business information
9. Adjust LLC basis/capital accounts in bookkeeping software (if applicable)
10. Notify your accountant or look for one to help with the IRS Partnership Return (Form 1065) and issuing K-1s come tax season next year.
And yes, the process would vary a bit if you sold 100% interest to your husband and he became the 100% sole owner. Apologies for the slow reply. Hope that helps!
I have an existing business (Seattle WA) set up as sole proprietor, LLC. I have all docs and filings for this business, filed taxes with DOR. If I want to start another completely different business do I need to get a separate Seattle Business License? I would keep any revenue/expenses separate? Thank you.
Janet
Hi Janet, yes, Seattle requires that each business entity have its own business license. If you have a Washington LLC and you want to form another Washington LLC (or other business entity), each LLC would have it’s own EIN Number, LLC bank account, business license, etc. Hope that helps.