While forming a limited liability company offers perks that no other business entity does, it doesn’t exclude you from mandatory expenses. From initial report flings up to the state business license application, keeping track of all these costs can be challenging. Lucky for you, our business experts discuss all Washington LLC fees in this post to ease your doubts and worries.
Formation Costs for a Washington LLC
Business Name Reservation
Like other states, the Washington Secretary of State does not require business name registration when you form an LLC. In fact, if you want to secure an LLC name, our team of experts’ best advice is to file your certificate of formation right away.
However, in case you’re not yet ready to submit your certificate of formation, you can reserve your desired LLC name with the Washington Secretary of State along with a $30 filing fee that’ll give you exclusive rights for 180 days.
You can also check with the state’s public database if the LLC name you’ll file is available for application to avoid any conflicts or delays within the process.
Certificate of Formation
To form an LLC in Washington, one of the first steps you must accomplish is the submission of the certificate of formation. As you may already know, this LLC formation procedure is usually the most expensive one out of the rest, so it’s best to put it in your budget ahead of time.
Similar to formation documents in other states, the Washington LLC certificate of formation includes all details about your company that the state must put on records, such as business name, address, registered agent details, and many more. You can file online with a $200 filing fee or opt to mail its hard copy document for $180.
If you want your Washington certificate of formation processed faster, you can always pay an extra $50 fee to expedite your application.
Initial Report
Did you know that those initial report filings are part of Washington LLC fees that you need to pay to keep your company in good standing? Yes, you read that right. Within 120 days from the day you filed your certificate of formation to the Secretary of State, you must accomplish this requirement.
If you already submitted it during the LLC formation online filings, you don’t have to worry about the filing fee. However, if you don’t, you’ll need to pay an extra $10 for mail and $30 for web submissions.
Operating Agreement
Although crafting a Washington LLC operating agreement isn’t part of the mandatory process required by the Secretary of State when forming a business structure, even our trade experts could verify the significance of this internal document for your company.
If you form an LLC with an operating agreement, all management and ownership rights will be outlined clearly, which will help significantly during your operations. And even though operating agreements could be created by yourself without any entailed charges, we suggest seeking professional service to avoid legal lapses.
Some LLC formation service providers include a comprehensive operating agreement template in their offerings, or you could find legal experts to assist you while crafting it.
EIN Registration
Unlike operating agreements, any Washington LLC is required to obtain an employer identification number (EIN) or Federal Tax ID number from the IRS. With this nine-digit requirement, Washington LLCs could be appropriately identified and taxed by the state.
And when you form an LLC in Washington state, you’ll encounter transactions like opening a business bank account and hiring employees. Part of those procedures will require you to get an EIN.
You can request one through an online filing with no fees involved. However, if you choose to assign this task with an LLC service, expect additional expense on your end.
Registered Agent
Admit it or not, your LLC’s registered agent plays the most crucial role in maintaining your good standing within the state. Without a reliable registered agent to receive notices for your Washington LLC taxes and court demands, your business could face hefty penalties and non-compliance risks.
According to state law, any individual or company could be elected as a registered agent if they qualify within the standards [1]. And while you can be your own registered agent with these qualifications, the obligations bestowed in this role could hinder you if you’re thinking of focusing on the operational aspect of your LLC.
If you’re not keen on doing the legwork, your Washington LLC could always hire a commercial registered agent service to represent your entity. With extensive industry experience under their belts, rest assured that these registered agent providers will do the job right and lessen the chances of incurring non-compliance penalties.
Business License/s
The business license application for your Washington LLC is among the most critical steps you should make to operate within the state legally. The costs and requirements for this procedure heavily lean on the nature of the business that you’re running.
For example, Washington LLCs offering professional services require specific licensing requirements and standards before they can legally operate. You can check with the Washington Department of Licensing or any business licensing service to ensure full compliance.
Certificate of Good Standing
Besides acquiring a state business license, some occurrences like transactions with banks and lending companies will oblige you to get a certificate of good standing as proof of your compliance with Washington state LLC requirements. To get this document, you can request it from the Secretary of State for a $20 fee.
Foreign LLC Registration
If you’re planning to expand your business in Washington, you’ll need to register as an official foreign LLC. Instead of acquiring a certificate of formation, you’ll have to file a Foreign Registration Statement and pay $200 for online filing and $180 for mail submission.
LLC Formation Services (Optional)
While reading this post, you’re now aware that forming an LLC in Washington requires more submissions and fees than you initially thought. If you find yourself overwhelmed, you can sign up for an LLC formation company to handle your registration, annual report filing, and business license application.
On top of all those perks, some LLC service providers also offer to act as your Washington Registered Agent. These features are usually included in their LLC formation service packages and costs around $0 – $300.
(If you are looking for online service, you can also check the most reliable online incorporation services here)
Washington Annual LLC State Fees
Annual Report
Aside from LLC formation expenses, there are recurring fees you must settle to maintain your limited liability perks like filing an annual report. This submission allows the government to be updated with your company details and taxes paid.
You can file annual reports for your LLC online on the state’s website or by mail. Regardless of the manner of submission, you need to pay $60 on or before the end of the month when your LLC was formed. Failure to meet the due date will incur you an additional $25 penalty fee.
Other Taxes
Your expenses don’t end with filing a Washington LLC annual report. As a law-abiding company, you’re obliged to pay taxes. The good news is the state considers LLCs as pass-through entities, which means that you won’t be imposed with any federal income tax.
However, all losses and profits will be reported on your members’ personal tax returns instead. Aside from that, your taxation conditions will depend on how you registered your entity. Typically, single-member LLCs are taxed as sole-proprietorship, while Washington corporations declared as s-corporation or c-corporation also have different specifications.
On top of that, if your business transacts through selling services and merchandise, you’ll have to settle sales tax to the state. Similar circumstances also apply for companies hiring employees, as you’ll need to pay Unemployment taxes complying with the requirements set by the Employment Security Department.
Importance of Paying Annual LLC Fees
While every state varies when it comes to registration expenses and recurring maintenance costs, paying annual LLC fees allows your entity to secure limited liability protection perks that will enable the separation of personal assets from the LLC itself. Consistent compliance also gives you the freedom to operate legally without incurring additional penalty charges.
Overall Cost
Excluding expenses for registered agent services, formation companies, and business-specific taxes and licenses, registration and annual maintenance fees costs around $300 – $350. This calculation includes filing formation documents, submitting initial reports, acquiring a certificate of good standing, and periodic report filings.
FAQ
How much does an LLC cost in Washington state?
An LLC in Washington state costs around $300- $350, which includes the registration process, initial report submission, certificate of good standing acquisition, and periodic report filing. But, of course, these expenses estimation excludes service fees for when you sign up for registered agent services and LLC formation companies.
How do I renew my LLC in Washington state?
You can renew your LLC in Washington state by filing an annual report to the Secretary of State’s office on or before the end of the month of your company’s incorporation. This submission costs $60 yearly, so be sure to include it in your budget. Failure to pay on designated due dates will lead to a penalty fee amounting to $25.
Conclusion
Tracking all Washington LLC fees is just the tip of the iceberg when managing and operating a business. While it can be intimidating at first, our business enthusiasts assure you that you’ll get the hang of it as long as you comply with the requirements. Should you find yourself unsure, there’s no shame in seeking help from professional companies to handle the legwork.
