Washington State
LLC Operating Agreement

Home » Washington LLC » Washington Operating Agreement

Quick Start Guide
This Quick Start Guide is a brief overview of how to form an LLC in Washington.

Detailed Lessons:

 

Washington LLC Costs:
Washington LLC state filing fee: $200
Washington LLC annual report fee: $60

Need help?
Hire a reliable service to form your Washington State LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

★ Check out Northwest vs LegalZoom

LLC Operating Agreement (template + instructions)

What is a Washington LLC Operating Agreement?

A Washington LLC Operating Agreement is a written contract among the LLC Members (owners) which includes details and information about LLC ownership and management.

Basic Information:

Your Operating Agreement will include basic information about your Washington LLC. A lot of the information will be the same information listed in your LLC’s Certificate of Formation, such as:

LLC Ownership:

Your Washington LLC Operating Agreement will be a place where all the LLC Members will list how much of the LLC they own and then each Member will sign the Operating Agreement.

How much someone owns is called their “ownership interest”, “ownership percentage”, or “ownership units”. LLC Ownership is most often expressed as a percentage (example, 5%, 50%, 100%, etc.). The terms “shares” or “shareholders” doesn’t apply to LLCs.

Initial Capital Contribution:

One of the first things you’ll do after your LLC filing is approved by the Washington Secretary of State is have each of the LLC Members (or the sole Member in a Single-Member LLC) make their initial capital contribution. The initial capital contributions will be listed in your Washington LLC’s Operating Agreement.

A capital contribution is simply an individual member depositing money into the LLC bank account. The most common way to do this is by each person writing a personal check made out to the LLC. This also creates a nice record of the transaction. If you’re going to use an Operating Agreement template provided below, you’ll want the amount of the initial capital contribution to be proportionate to the ownership percentages.

For example, if it’s a 2-Member LLC with 50/50 ownership, each person should deposit the same amount of money. It doesn’t matter if both Members deposit $500 or $25,000; as long as both amounts are the same. If the 2 Member LLC was owned 70/30, then the deposits should reflect that ratio, such as Member 1 depositing $7,000 and Member 2 depositing $3,000.

Distribution of Profits:

As per the Operating Agreement templates below, when Members take money out of the Washington LLC’s bank account and distribute profits to themselves, this is called a “capital distribution”.

A capital distribution can be taken by an LLC Member writing a check from the LLC bank account to the LLC Member(s) individually. You could also use a digital bank transfer, bank wire, or any other other means of money transfer that creates a documented record.

In a Multi-Member Washington LLC, the amount of the capital distributions are proportionate to the percentage of LLC ownership.

Note: A capital distribution is not considered a salary.

Statement about taxes:

A brief statement of how the LLC will be taxed will be made in the Washington LLC’s Operating Agreement.

This will be the same type of taxation which is chosen during the next step of Washington LLC formation; getting an EIN from the IRS. We’ll discuss this fully in the next lesson and you’ll find a link at the bottom of this page.

Membership Voting

The rules of membership voting will be spelled out in your Washington LLC’s Operating Agreement. If you use the template for a Member-managed LLC below, the voting powers are proportionate to the LLC ownership percentages.

If you use the Manager-Managed Operating Agreement template below, the voting powers are also proportionate to the LLC ownership percentages. Then the Members (by a majority vote) agree to elect a Manager. The Manager then has their own authority to make most decisions on behalf of the LLC (without a vote needed by the Members). However, certain things, like adding a new LLC Member require a vote of the existing Members (and the Manager has no say).

What about Single-Member LLCs?

Operating Agreements are not only for Multi-Member LLCs.

Even if you are the only Member of your Washington LLC (a Single-Member LLC), it’s still best practice to have an Operating Agreement.

In case you have to go to court over a lawsuit, having an Operating Agreement will help prove your Single-Member LLC is being run as a separate entity. And therefore, your personal assets remain safe and out of reach of creditors.

Do I have to send my Washington LLC Operating Agreement to the state?

No, you don’t have to send your Washington LLC Operating Agreement to the Secretary of State (or to any other government agency for that matter).

As an “Internal Document”, you (and your fellow Members, if applicable) need only keep your Washington LLC Operating Agreement in your business records and amongst yourselves.

Who needs your Operating Agreement?

The following may need to see a copy of your Washington LLC Operating Agreement:

  • Banks and lending companies
  • Title companies
  • Accountants, tax professionals, and lawyers
  • Investors
  • Court (if you ever end up there)

This list is not exhaustive. Other individuals and companies may also request a copy of your Washington LLC’s Operating Agreement.

Operating Agreements don’t need to be notarized

Your Washington LLC Operating Agreement doesn’t need to be notarized.

Once you (and the other LLC Members, if applicable) sign the Operating Agreement, then it becomes a legally binding document for all of you.

Washington LLC Operating Agreement (Member-managed)

Our Washington LLC Member-managed Operating Agreement is available in 3 formats:

A Member-managed Washington LLC is where all the owners (LLC Members) have the ability to bind the LLC in contracts and agreements. And the Washington LLC Members also run the business and the day-to-day operations.

Most people choose to have their Washington LLC be Member-managed.

Washington LLC Operating Agreement (Manager-managed)

If your Washington LLC will be Manager-managed, you can download the Operating Agreement below, courtesy of Northwest Registered Agent. Their Washington LLC Manager-Managed Operating Agreement is available in 2 formats:

A Manager-managed Washington LLC is where only one, or a few designated people (called “Managers”), have the ability to bind the LLC in contracts and agreements. The Washington LLC Managers also run the business and the day-to-day operations, while the other Members can’t bind the LLC in contracts and agreements, and they don’t take part in running the business and day-to-day operations. Instead, they take a passive/investor role. The Members however do vote the Manager into their position and also are required to vote on certain items, like adding or removing an LLC Member.

For more information, please see Member-managed LLC vs Manager-managed LLC.

Customized Washington LLC Operating Agreement

If you want your Washington LLC’s Operating Agreement customized to you and the other LLC Members’ specifications, we recommend hiring a business attorney.

Make sure all LLC Members have a copy

Once you finalize your Washington LLC’s Operating Agreement, make sure all Members have a copy.

And keep a copy or two of the Operating Agreement with your .business records.

Next Step: EIN for LLC

After you’ve completed and signed your Washington LLC’s Operating Agreement, you can then proceed to the next Lesson: Apply for EIN for Washington LLC.

Matt Horwitz


Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
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.

8 comments on “Washington Operating Agreement”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. Hi Mike
    This was really helpful for me. I’m setting up a sole member LLC and wondered if there was a simpler Operating Agreement, or if it was even necessary in this case? I was also advised by accountant that a sole member LLC is not recognized by the federal government, and that I would be filing on my individual taxes. In this case, is it necessary to file for an EIN as I will be using my SSN?
    Thanks!
    Ellen

    • Hi Ellen, no, we don’t have another Operating Agreement template at this time. We definitely recommend having an LLC Operating Agreement. The LLC, by default, isn’t recognized by the IRS for tax purposes. By default the IRS treats a Single-Member LLC owned by a US taxpayer like a Sole Proprietorship. This doesn’t take away the legal protections provided by an LLC though. We recommend getting an EIN as it makes it easier to open an LLC bank account. It also gives you flexibility if you change the tax treatment of your LLC in the future. And it’s much better to give out an EIN instead of an SSN. Hope that helps.

      • Thanks Matt! I don’t think I could have submitted my LLC request today without your site – or at least not so knowledgeably! Thanks. I’ll tackle the EIN with confidence after having watched your video once i get the certificate back. Then on to operating agreement.
        Thanks

        • You’re welcome Ellen! I always find it helpful to learn about what I’m doing. Awesome! Let me know if you have any follow up questions.

  2. Hi Matt, great article and site, thanks!

    2 questions:

    1) I’m setting up a single member LLC. If I’m given a W-9, is it better to put my SSN or my LLC’s EIN? What are the potential consequences of either decision? A friend suggested that I use the business EIN; however, I’m seeing a quote on this IRS article that says to use your personal SSN or EIN for a Single-Member LLC. Quote — “For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.” https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies

    What are your thoughts on this quote above?

    2) For an SMLLC, do you recommend the Manager or Member operating agreement?

    Thanks very much!

    • Hi Ben, thanks! Regarding the W9, I always use the EIN instead of the SSN for Single-Member LLCs. There are never any penalties enforced and I’d much rather give out an EIN than an SSN. You’re going to report the 1099 income anyway on your personal tax return, so it doesn’t make much difference. Regarding Member-managed LLC vs Manager-managed LLC, it’s quite insignificant for a Single-Member LLC. A slight “advantage” (if it’s applicable to you) is if you have a Manager-managed LLC and you are the Manager, it doesn’t imply that you are the owner (although you are… you’re the Member and the Manager). If you have a Member-managed LLC, then you are the Member, which many know to mean the owner. Hope that helps.

  3. I have been asked by my attorney to change the name of the owner of the LLC (100% myself) to the name of my “Revokable Living Trust” (also me). This is a Washington State LLC. How do I do this? I am unclear on how to proceed, and would appreciate your thought on what I need to do.

    Thank you! Mary

    • Hi Mary, I apologize for our slow reply. You’ll likely want to contact a business attorney for help. You’ll want to sign an Assignment of LLC Membership transferring you’re 100% ownership to your Trust.  And you’ll want to amend the LLC’s Operating Agreement. Then you’ll need to update the Washington Secretary of State and the Washington Department of Revenue. And then let your accountant know about these changes. Hope that helps.

Leave a comment or question

Comments are temporarily disabled.

×

How to form a US LLC

Non-US residents: If you want to form an LLC in the US, we recommend hiring doola.

doola specializes in forming US LLCs for international entrepreneurs.

They'll form your LLC, open your business bank account, and help with taxes. doola also has excellent customer service.

Hope that helps!

Matt Horwitz founder of LLC University
Matt Horwitz
Founder & Educator
LLC University®