Last updated October 12, 2020
Starting a Business in Washington State
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 business name.
After you’ve selected your business name, you should search it on the Washington Database to see if it’s available: https://ccfs.sos.wa.gov/#/AdvancedSearch
Bonus Tip on Searching for a Good Domain Name: Finding a good domain name nowadays is not that easy. To help you out, we recommend using Lean Domain Search: https://www.leandomainsearch.com.
Just type in keywords relevant to your business, and the tool will come out with a list of suitable domain names.
(note: there’s more tips on domain names and websites at the bottom of this guide)
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).
A Sole Proprietorship in Washington happens when you operate your business as yourself. There is no separate legal entity created; the law treats you and your business as one person. You are responsible and personally liable for any business activity or wrongdoing.
A Washington Partnership is the same as a Sole Proprietorship, just with 2 or more people. Like a Sole Proprietorship, a Partnership does not create a separate legal entity and the partners are responsible and personally liable for any business activity or wrongdoing.
A Washington Corporation (aka “Profit-Corporation”) is a complex legal structure usually created to run large businesses. Think of technology and startup companies that are raising venture capital money or selling shares on the stock market.
Unlike a Sole Proprietorship or Partnership, a Corporation is a separate legal entity. It provides liability protection for its owners (called shareholders).
An LLC in Washington is a hybrid entity that combines the benefits of a Corporation and a Sole Proprietorship (and a Partnership).
A Washington LLC is a separate legal entity under the law. And like a Corporation, it provides personal liability protection for the owners. If the LLC is sued, the owner’s personal assets – like their home, cars, and bank accounts – are protected. And like a Sole Proprietorship, an LLC also has the benefit of pass-through taxation.
An LLC Is the most popular option and a good choice for people who want to run a business for two reasons:
- Personal liability protection (personal assets are kept safe)
- No double taxation
Unlike a Sole Proprietorship (and a Partnership), your Washington LLC’s assets are separate and distinct from your personal assets. In the event your LLC gets sued, your personal assets are protected.
And unlike a Corporation, your LLC is not subject to double taxation. Instead, your LLC’s profits will “flow through” to your personal tax return.
For more details, we have a video on LLC or Sole Proprietorship or Corporation.
If you want instructions on forming an LLC in Washington, check out our free tutorial: Washington State LLC instructions
If you want to form a Corporation in Washington State, you can file it yourself or you can hire a filing company like Northwest Registered Agent.
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.
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 have any questions, you can contact the Washington Secretary of State or Business License Services.
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.
Your EIN is used to open a business bank account, file taxes, get financing, and handle employee payroll (if applicable).
Think of your EIN as your Washington business’s “social security number”.
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:
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 which is obtained 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. You can also read the Washington business license FAQs. And if needed, you can also get the license via paper filing.
City, town, and local-level:
In addition to the state-level business license, depending on what city or town you do business in and what type of business activity you engage in, you may also need to get a local business license from your city or town. Here is a list of participating cities where you can get a State Business License in addition to filing your City Business License Addendum (they can be filed together). If your city is not listed in the “participating cities” link, you will need to contact your city directly to determine if your WA business has any licensing or city-level registration requirements.
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 and prepare your applications. Just fill out their 1-minute questionnaire to get started.
Step 7: Register with the Washington Department of Revenue
After your business is formed in Washington, you’ll want 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 the system will automatically register you with the Department of Revenue.
We also recommend speaking with an accountant to make sure you properly file your federal, state, and local tax returns.
Washington does not have a state income tax.
However, Washington state does impose a Business and Occupation (B&O) tax. Pretty much every type of business in Washington state is subject to this tax. That means Sole Proprietorships, Partnerships, Corporations, and LLCs. The B&O tax is based off the gross income of your business.
There is also a local-level B&O tax which varies by city and town.
If your Washington business will sell tangible property, you’ll also need to collect and pay sales and use tax. Some service-based business must pay sales tax too, as listed on the state’s business tax structure page.
We also recommend reading tax classifications for common business activities.
For further questions, you can also contact the Washington Department of Revenue: https://dor.wa.gov/contact-us
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 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 1: 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.
Note 2: 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.
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.
Business.WA.gov: Small Business Guidance (Start)