How to Form an LLC in Washington State
Washington LLC Formation Hub
RCW 25.15 + RCW 23.95 • Certificate of Formation • B&O tax readiness • CTA exemptions
Why Choose a Washington LLC?
Washington’s Limited Liability Company Act (RCW 25.15) was rewritten to be contract-friendly, enforce operating agreements, and align with the Uniform Business Organizations Code (RCW 23.95). Combine that with online filings, built-in expedite options, and no state income tax, and a WA LLC becomes the default for founders who actually live or operate here.
🌲Best-Fit Scenarios
- WA-based founders who need bank-ready documentation, registered agents, and B&O accounts set up fast.
- Remote professionals relocating from CA/NY/TX who want no income tax but understand B&O filings.
- Real-estate and short-term rental operators holding property in Seattle, Tacoma, Spokane, or the islands.
- Professional practices (legal, medical, architecture) using PLLCs to satisfy licensing board rules.
⚠️Where WA Isn’t Magic
- Attempting to dodge another state’s taxes while maintaining nexus there—you still foreign-qualify and pay.
- Series LLC structures—WA rejected the Uniform Protected Series Act, so Delaware/Texas series must register as standard LLCs.
- Anonymous filings—SOS public records list RA information and initial governors/members; CTA rules may return.
- High revenue without margins—B&O tax hits gross receipts regardless of profitability.
❌ Myth: “No income tax = tax-free Washington LLC”
Washington’s lack of an income tax does not mean your LLC avoids state levies. The gross-receipts B&O tax still applies to almost every business, even if you lose money, and major cities stack their own B&O on top. If you live in California or Oregon, those states continue to tax your worldwide income regardless of where the LLC is formed.
✓ Reality: Form in WA when your business already lives here
Use a Washington LLC when you have office space, property, employees, or resident owners in the state. It aligns your registered agent, UBI, DOR accounts, and PLLC licensing, and avoids the double cost of “out-of-state LLC + WA foreign registration.” It also supports community-property planning for married owners.
Washington Business Entity Map (Primary RCW Anchors)
- LLC / PLLC: RCW 25.15 (Washington Limited Liability Company Act) plus professional-licensing rules for PLLCs.
- Profit corporation: RCW 23B (Washington Business Corporation Act).
- Social Purpose Corporation (SPC): RCW 23B.25 overlay on the Business Corporation Act.
- Nonprofit corporation: RCW 24.03A (Washington Nonprofit Corporation Act).
- Uniform Business Organizations Code: RCW 23.95 (name rules, filings, registered agents, UBI, foreign registration).
The LLC hub on this page focuses on RCW 25.15 and 23.95, but if you are comparing LLCs to corporations or nonprofits, this entity map gives you a quick sense of what chapter you are really signing up for.
| Entity type | RCW reference | Best-fit use |
|---|---|---|
| LLC | RCW 25.15 | General businesses needing pass-through taxation and contractual freedom. |
| PLLC | RCW 25.15 + board rules | Licensed professionals (law, medicine, accounting, architecture). |
| Corporation | RCW 23B | Startups planning equity raises, stock option plans, or eventual sale. |
| Social Purpose Corporation | RCW 23B.25 | For-profits with codified social or environmental missions. |
| Nonprofit | RCW 24.03A | 501(c)(3) charities, mutual benefit groups, trade orgs. |
⚖️Washington vs Other Popular LLC States
When clients ask “Should I form in Washington or somewhere more ‘famous’ like Delaware or Wyoming?” this is the comparison I actually walk them through. Numbers are approximate and change over time, but the pattern is what matters.
| State | Formation Cost (LLC) | Annual State Cost | Income Tax? | Practical Notes |
|---|---|---|---|---|
| Washington | ≈ $200 online (COF) + optional $30 name reservation | $70 annual report (plus B&O filings if doing business in WA) | No state income tax, but B&O on gross receipts | Best when you actually live or operate in WA. B&O can bite low-margin businesses. No series LLC statute. |
| Wyoming | ≈ $60 formation cost | Low annual franchise fee; privacy + asset-protection marketing | No state income tax | Attractive for holding companies, but if you live in WA or CA you still owe home-state tax and must foreign-register where you really operate. |
| Delaware | ≈ $110 formation cost | Annual franchise tax + RA fees | State income tax applies for in-state activity | Excellent courts and investor familiarity for venture-backed companies, but overkill for a local WA consultant who never plans to raise VC. |
| California | ≈ $70 formation cost | $800 LLC tax + $20 statement of information | Yes (personal and corporate) | If you live and work in California, you are “doing business” there regardless of where the LLC is formed. California is the default for purely California-based businesses. |
Takeaway: Washington wins for Washington-centric operations. Delaware and Wyoming have their role, but not as magic shields against your home state’s tax and jurisdiction rules.
When Washington is not your silver bullet
- California nexus: Forming in WA doesn’t relieve you from CA’s $800 LLC tax or franchise filings if you live or operate there.
- Low margin, high revenue: B&O taxes gross receipts even when you lose money, so plan for effective rates exceeding 10% for services.
- No series statute: Delaware/Texas series must reorganize; WA offers only single-entity liability protection.
- Transparency: RA info is public, and FinCEN can restart BOI reporting—don’t promise anonymity.
Statute & Certificate of Formation Essentials
RCW 25.15.071 spells out the content of every Washington Certificate of Formation. RCW 23.95 (UBOC) supplies naming standards, registered agent rules, periodic reports, and foreign-registration mechanics.
Required Contents of the Certificate of Formation (RCW 25.15.071)
| Requirement | RCW cite / SOS note | Practice tips |
|---|---|---|
| Name | RCW 25.15.071(1)(a); RCW 23.95.300–305 | Use “LLC”, “L.L.C.”, etc. Distinguish from existing names by more than punctuation; add geographic/industry modifiers if needed. |
| Registered agent + address | RCW 25.15.071(1)(b); RCW 23.95.415 | No PO boxes. Upload consent or use the online RA acceptance. Mis-typing addresses causes service failures. |
| Principal office | RCW 25.15.071(1)(c) | Can be out of state. DOR cross-checks it against your business license application. |
| Duration & effective date | RCW 25.15.071(1)(d) | Perpetual default. Set a delayed effective date (up to 90 days) if coordinating closings. |
| Organizer / executor info | RCW 25.15.071(1)(e) | Organizer can be your attorney or RA. Banks often want the first member listed even if not required. |
| Management statement | RCW 25.15.071(1)(f) | Check “manager-managed” if you plan to appoint managers; failing to do so causes confusion later. |
| Optional provisions | RCW 25.15.071(1)(g) | Use for PLLC profession language, liability limitations, or indemnity disclaimers; keep trade secrets out of the public record. |
Naming rules under RCW 23.95
Names must be distinguishable on SOS records, avoid misleading professional words, and include an LLC designator. You can reserve a name for 180 days (Form NR, $30). The name rejection list includes banking words, government references, and words requiring board approval (e.g., “engineer”, “architect”).
Registered agent requirements
Every LLC must maintain a registered agent located at a physical Washington address (RCW 23.95.415). Agents must keep normal business hours. Commercial RA services typically run $120–$200/year; individuals can serve but must stay available for process servers, which is risky for remote owners.
Professional LLCs / PLLCs
PLLCs file the same certificate but must state the profession (e.g., “to practice law in Washington”) and comply with the relevant licensing board. Only licensed professionals may be members/managers, and the operating agreement must address what happens when someone loses their license. Some boards (e.g., WSBA, Department of Health) require copies of your filings or additional approvals.
Foreign LLC registration
Foreign LLCs transacting business in Washington must file a Foreign Registration Statement (RCW 23.95.505) and pay the same $200 online fee. Trigger events include having employees, inventory, or offices in WA. Failure to register bars you from maintaining lawsuits until you cure, and DOR can assess penalties for unlicensed activity. Once registered, you file the same $70 annual report and maintain a WA registered agent.
Filing options & turnaround
| Method | Fee | Expedite | Turnaround | Use case |
|---|---|---|---|---|
| Online via CCFS | $200 | Included | 1–2 business days (often same day) | Default for most filings; initial report can be included. |
| Mail / in-person standard | $180 | None | 3–4 weeks | Only use if you need to attach extra documentation the portal doesn’t support. |
| Mail / in-person expedited | $180 + $100 | $100 surcharge | Same day to 2 business days | For unusual filings (e.g., court orders) requiring paper submission but time-sensitive results. |
📄 Filing Tips & Common Mistakes
- Mark “manager-managed” if you will use managers—fixing later requires an amendment.
- Use the same principal office address on your DOR business license; mismatches trigger verification requests.
- When appointing an individual RA, ensure they understand process servers may arrive at their home.
- Keep a PDF of the stamped certificate, RA consent, and initial report; banks and investors frequently request them.
Formation Checklist
This is the workflow I use for WA LLCs and PLLCs. Everything is handled online unless you have a special filing (e.g., recordation, court order, tribal entity, etc.).
Step 1 – Name & Reservation
Run name searches in CCFS and secure the matching domain/social handles. If you need extra time (fundraising, licensing), file the $30 name reservation (Form NR) to lock it for 180 days. Avoid restricted terms unless you have board approval.
Step 2 – Registered Agent Strategy
Choose between a commercial RA (recommended for non-residents) or a trusted individual with a WA street address. Agents must be available during business hours and willing to receive subpoenas—plan accordingly.
Step 3 – Certificate of Formation & Initial Report
File online via CCFS for $200; the system automatically expedites. Include the initial report in the same session (free) to avoid the $10 later filing. PLLCs insert their profession (“to practice dentistry in Washington”) in the optional clauses.
Step 4 – Operating Agreement & Organizational Actions
Adopt an operating agreement covering capital contributions, management, transfer restrictions, fiduciary duty modifications, and PLLC requirements. Execute resolutions admitting members, appointing managers/officers, authorizing EIN filings, and opening bank accounts.
Step 5 – EIN, UBI & Tax Accounts
Obtain an EIN from the IRS. Register with the WA Department of Revenue to either obtain or confirm your Unified Business Identifier (UBI) and to open B&O and sales/use tax accounts. Most cities require a local license once you receive the state master business license.
Step 6 – Banking, Accounting & Calendars
Provide your bank with the stamped certificate, OA, and resolutions. Set up accounting software (QuickBooks, Xero) and calendar B&O filings, annual report deadlines, and city license renewals. Document member reimbursements and loans to avoid commingling.
Step 7 – Foreign Registration (if needed)
If you operate in Oregon, California, Idaho, or elsewhere, foreign-qualify now while the WA documents are fresh. Each state will need a Certificate of Good Standing from WA (order via CCFS) and its own registered agent.
📋Fee Snapshot
| Certificate of Formation (online) | $200 |
| Certificate of Formation (paper) | $180 + $100 expedite if needed |
| Name Reservation (optional) | $30 |
| Initial Report (with filing) | $0 |
| Initial Report (afterward) | $10 |
🧾Documents to Prepare
- Operating Agreement: Washington-specific clauses on fiduciary duties, B&O distributions, PLLC ownership restrictions.
- Organizational Minutes: Admit members, appoint managers/officers, approve EIN filings, authorize bank accounts.
- Registered Agent Consent: Keep a signed consent for proof of authority and future RA changes.
- Member ledger & cap table: Track contributions, vesting/sweat equity, and S-corp ownership requirements.
- Tax election forms: Partnership vs. S-corp choice, DOR business license application, city license forms.
⏱️Filing Timeline
| Online submission | Instant confirmation; 1–2 business days for stamped certificate |
| Paper w/ expedite | Same-day or 2-day turnaround once received |
| Paper standard | Up to 3–4 weeks |
🩺 Folding Window – Professional LLC Checklist
- Confirm licensing board rules (WSBA, DOH, Board of Accountancy, etc.) permit PLLCs and whether they require separate registration.
- All equity holders and managers must hold active licenses; outline buyout/redemption if a member is disciplined or leaves the profession.
- Some boards demand copies of the OA, insurance certificates, or surety bonds—budget extra time for board review.
Operating Agreement & Fiduciary Duties
RCW 25.15 emphasizes contractual freedom but retains non-waivable duties: the obligation of good faith and fair dealing and minimum standards of loyalty. Draft your operating agreement as if a judge will read it—because in Washington, they often do.
Default vs. customized duties
Default duties: RCW 25.15.038–.0385 codify loyalty (account to the company, refrain from competing, avoid self-dealing without consent) and care (avoid gross negligence or reckless conduct). The OA can specify safe harbors for certain transactions, reduce liability for ordinary negligence, and define conflict-of-interest procedures. The duty of good faith and fair dealing cannot be waived.
Member-managed vs manager-managed
| Member-managed | Manager-managed | |
|---|---|---|
| Use case | Family rentals, professional practices where all owners are active. | Startups with passive investors, multi-property portfolios needing centralized control. |
| Authority | Each member can bind the LLC unless OA restricts it. | Managers have authority; members vote only on major decisions. |
| Fiduciary duties | All members owe duties to each other and the LLC. | Managers owe duties; non-manager members only owe limited obligations. |
Multi-member drafting checklist
| Clause | Purpose | WA-specific note |
|---|---|---|
| Capital contributions | Documents cash, property, services, and future funding obligations. | RCW 25.15.451 enforces contribution obligations; specify penalties for failure. |
| Vesting / sweat equity | Incentivizes founders providing services over time. | Use repurchase formulas tied to fair value; address payroll tax implications. |
| Capital calls | Allows the LLC to request additional funds. | Reference RCW 25.15.460–.495; define dilution or default remedies. |
| Distributions & tax allocations | Sets cash waterfall and tax distributions. | Plan for B&O and city tax reserves before member draws. |
| Buy-sell / ROFR | Controls transfers to outsiders. | Needed for PLLCs (licensure) and community-property state considerations. |
| Drag/tag rights | Ensures clean exits during a sale. | Reference RCW 25.15.121 for unanimous-consent transactions. |
| Expulsion / bad-actor removal | Removes members who breach duties or lose licenses. | Outline valuation formula tied to fair value; PLLCs must mandatory redeem disqualified members. |
| Deadlock & dispute resolution | Resolves 50/50 stalemates. | RCW 23.95.525 permits WA-only forum clauses; include mediation/arbitration steps. |
PLLC-specific OA issues
- Ownership limits: Only licensed professionals may own or manage; include automatic redemption if a member loses their license.
- Professional liability: Members remain personally liable for their own malpractice—ensure OA references insurance and personal guarantees.
- Board compliance: Some boards (e.g., WSBA, DOH) require copies of amendments; build that filing obligation into the OA.
📂 Folding Window: Additional drafting highlights
- Include B&O tax reserves so distributions don’t outpace cash needs.
- Use WA forum-selection and arbitration clauses to keep disputes local.
- For S-corp elections, add compliance language (single class of stock, eligible members).
- Consider putting CTA/BOI obligations (if reintroduced) into the OA so members must share ID promptly.
B&O Tax, Local Taxes & Annual Compliance
Washington waives income tax but imposes gross-receipts B&O taxes at both state and (often) city levels.
💼B&O Overview
| Classification | Approx. rate | Examples |
|---|---|---|
| Retailing | 0.471% → 0.5% | E-commerce selling to WA customers, storefront retail, restaurants. |
| Wholesaling / Manufacturing | ~0.484% | Manufacturers producing goods in WA, distributors shipping product to retailers. |
| Service & Other | 1.5%–1.75% | SaaS, consultants, lawyers, healthcare providers, creative agencies. |
| Royalties / apportionable income | 1.5%–1.75% | Software licensing, digital content, international revenues. |
Register with the Department of Revenue to receive/confirm your UBI and open excise (B&O/sales) tax accounts. Filing frequency depends on revenue: monthly for high-volume businesses, quarterly or annually for smaller ones. Even $0 returns must be filed to avoid penalties. The small business credit can reduce or eliminate B&O for startups—check current thresholds each January.
🗓️Compliance Calendar
| Requirement | Deadline | Fee / penalty |
|---|---|---|
| Initial Report | Within 120 days of formation | $0 with formation / $10 if separate |
| Annual Report | Last day of anniversary month | $70 ($25 late fee + dissolution risk) |
| DOR Excise/B&O Return | Monthly/quarterly/annual based on assignment | Penalties start at 5% per month + interest |
| City B&O Returns | Usually quarterly (Seattle/Tacoma/Bellevue) | Varies by city |
| CTA Monitoring | As rules change | Currently $0, but keep ownership records ready |
Scenario: Solo consultant earning $150k
Even with all clients out-of-state, WA taxes the gross receipts under the Service & Other classification (~1.75%). Seattle-based consultants owe city B&O if revenues exceed the city threshold (moving to $2M in 2026 but with higher rates).
Scenario: Amazon seller shipping nationwide
Your WA nexus from warehousing inventory triggers both state retailing B&O and sales tax collection. Sales to other states may require marketplace facilitator compliance but do not remove WA obligations. City B&O applies if you operate within a city boundary.
Corporate Transparency Act / Beneficial Ownership Status
FinCEN’s March 2025 interim rule temporarily exempted all domestic entities from BOI reporting. Washington LLCs and corporations formed under state law currently have no CTA filing duty, but foreign entities formed abroad and registered here still need to pay attention.
📢What to keep on file anyway
- Copies of government ID (passport/driver license) for each member/manager.
- Legal names, addresses, and ownership percentages for all beneficial owners.
- Control-person info (managers, managing members, senior officers).
- Historical records of transfers or ownership changes.
This ensures you can refile quickly if FinCEN reactivates domestic reporting.
🧭Operating agreement clauses
Add language requiring owners to deliver BOI info within a fixed number of days if reporting restarts, and authorize the manager to file on behalf of members using that information. Include penalties (fines or forced buyouts) for members who refuse to provide data—FinCEN’s civil penalties fall on the company if you cannot report.
✍ Suggested clause concepts
- Members consent to providing personal identification within five business days of written request for CTA compliance.
- Managers may rely on member-provided information and file BOI reports on behalf of the LLC.
- Failure to provide information constitutes a breach allowing suspension of distributions or forced redemption.
Attorney Services for Washington LLCs
I bill $240/hour. Most standalone WA LLC formations land between 3 and 5 hours, while PLLC/professional or multi-state engagements run longer. These packages give you a sense of scope; we can mix-and-match.
Standard WA LLC
- Certificate of Formation + initial report filing
- Registered agent coordination
- Basic operating agreement (member-managed)
- Organizational minutes & banking certificates
- Annual report calendar + instructions
Custom WA LLC / Tax Planning
- Everything in Standard
- Custom OA (multi-member, vesting, capital calls)
- S-corp analysis + IRS Form 2553 prep
- B&O/sales tax registration roadmap
- City license requirements (Seattle/Tacoma/Bellevue)
PLLC / Professional Practice
- Profession-specific certificate language
- Operating agreement with licensing restrictions
- Mandatory redemption / loss-of-license clauses
- Coordination with WSBA/DOH/accountancy boards
- Malpractice coverage + indemnity guidance
Annual Compliance & RA Oversight
- Annual report preparation & filing
- B&O/city filing reminders
- RA monitoring + change filings
- CTA/BOI updates & ownership ledger maintenance
- Priority scheduling for new matters
Book a strategy call
We’ll map your entity, timeline, and tax obligations in 30 minutes. I can usually file within 24 hours once engagement letters are signed.
Why work with me? I’m a California-based attorney handling Washington entities remotely—everything is filed through CCFS, and I coordinate B&O and city compliance with local CPAs as needed. You get state-specific drafting plus multi-state planning from someone who works with WA founders every week.