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How to Start a Business in Washington

Are you planning on starting a new business in the state of Washington, but having some trouble getting started? Are the endless websites and paper trails making you feel overwhelmed? That happened to us, too.

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Washington has been the birthplace for a wide range of iconic companies, which includes Microsoft, Nordstrom, Starbucks, Amazon.com, and Costco. Venture capitalists have poured in $2.8 of VC money into the state between 2012 and 2014, the fifth highest amount in the nation. There is no personal or corporate income tax in the state. And, with a large pool of available employees, and a high rate of small business lending, Washington frequently has rated #1 as the best state in the country to do business from several reputable publications. In “The Evergreen State,” named for its abundant evergreen forests, even the higher-than-average cost of living can’t phase the staying power of new businesses. All of these reasons make us believe that Washington is a fantastic place to start a business in.

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How to Start a Business

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General resources for starting a business in Washington

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Fun facts about starting a business in Washington

Famous business founded in Washington Amazon.com

Amazon.com, Inc. is an electronic commerce and cloud computing company founded in Seattle, Washington in 1994. It is the largest Internet-based retailer in the U.S., and is still headquartered in Seattle. In 2015, Amazon surpassed Walmart as the most valuable retailer in the nation by market capitalization.

Famous businessperson born in Washington Paul Allen

Paul Allen (born in 1953) is a businessman, philanthropist, investor, musician, and innovator. He was born in Seattle, Washington, and was the co-founder of Microsoft with Bill Gates. As of March 2016, he was estimated to be the 45th richest person in the world, with an estimated wealth of $17.7 billion.

“What should exist? To me, that’s the most exciting question imaginable. What do we need that we don’t have? How can we realize our potential?”

Paul Allen
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Which type of legal structure is best for my business in Washington?

At bizHUMM, we strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the right legal structure for your business.

Here are 5 helpful steps to determine the best structure for your business:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Washington.
LLC (Limited Liability Company)
An LLC is the United States-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Steps to starting an LLC in Washington:

  • Step 1 — Choose a name for your LLC.
  • Step 2 — File a Certificate of Formation.
  • Step 3 — Appoint a Registered Agent.
  • Step 4 — Prepare an Operating Agreement.
  • Step 5 — Comply with any publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File an Annual Renewal.
  • Step 8 — Register foreign LLCs doing business in Washington.

For help forming your LLC in Washington we recommend CorpNet (there are fees for their service).

Alternatively visit the Washington Secretary of State website.

Other Washington resources for LLCs:

Business Name Database: Search for the availability of your LLC name here.
File your “Name Reservation” here.
File your “Certificate of Formation” here.
File your Annual Renewal here.

Washington Business Licensing Guide: Check this site for licensing requirements for your business.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your LLC here. If your LLC has more than one member, you must get an EIN, even if you have no employees.

Washington Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, must register with this site.

Sole Proprietorship
A sole proprietorship is a one-person business that is very popular among individual self contractors or business owners. Even though there aren’t complicated start-up requirements for establishing a sole proprietorship, there may be local registration, business license, or permit laws you need to comply with to make your sole proprietorship legitimate. The owner of the sole proprietorship is entitled to all profits, and is responsible for all the business’s debts, losses, and liabilities.

Steps to starting Sole Proprietorship in Washington:

  • Step 1 — Name your sole proprietorship.
  • Step 2 — File a trade name.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Get an Employer Identification Number (EIN).

For help forming your sole proprietorship in Washington we recommend CorpNet (they have fees for their service).

Alternatively, you can visit the Washington Secretary of State website.

Other Washington resources for Sole Proprietorship:

Business Name Search: Search for the availability of your business name here. A sole proprietor may use his or her given name, or an assumed business name.
File your trade name here.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

Washington Business Licensing Guide: Check this site to find licensing requirements for your business.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your sole proprietorship here, if you will hire employees.

Washington Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, must register with this site.

Partnership
A partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business.

Steps to starting Partnership in Washington:

  • Step 1 — Choose a partnership name.
  • Step 2 — File a trade name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Get an Employer Identification Number (EIN).

For help forming your partnership in Washington, we recommend CorpNet (they have fees for their service).

Alternatively, you can visit the Washington Secretary of State website.

Other Washington resources for Partnership:

Business Name Search: Search for the availability of your business name here. A partnership may use the surnames of the individual partners, or a fictitious business name.
File your trade name here.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your partnership here. Partnerships are required to have an EIN, whether or not they have employees.

Washington Business Licensing Guide: Check this site to find licensing requirements for your business.

Washington Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, must register with this site.

S Corporation
With an S corporation (or S corp), income and losses are passed through to shareholders and included on their individual tax returns. As a result, there's just one level of federal tax to pay. The shareholders must report the income or loss on their own individual income tax returns. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation.

Steps to starting S Corporation in Washington:

  • Step 1 — Choose a corporate name.
  • Step 2 — File your Articles of Incorporation.
  • Step 3 — Find and appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with Washington Annual Renewal requirements
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Washington

For help forming your S corporation in Washington we recommend CorpNet (they have fees for their service).

Or, visit the Washington Secretary of State website.

Other Washington resources for S Corporation:

Business Name Search: Search for the availability of your corporate name here.
File your “Name Reservation” here.
File your “Articles of Incorporation” here.
File your Annual Renewal here.

Washington Business Licensing Guide: Check this site to find licensing requirements for your business.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Washington Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, are required to register with this site.

C Corporation
A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. C corporations are subject to double taxation; that is, one tax at the corporate level on the corporation's net income, and another tax to the shareholders when the profits are distributed.

Steps to starting C Corporation in Washington:

  • Step 1 — Choose a corporate name.
  • Step 2 — File Articles of Incorporation.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with Washington Annual Renewal requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Washington.

For help forming your C corporation in Washington we recommend CorpNet (they have fees for their service).

Or, you can visit the Washington Secretary of State website.

Other Washington resources for C Corporation:

Business Name Search: Search for the availability of your corporate name here.
File your “Name Reservation” here.
File your “Articles of Incorporation” here.
File your Annual Renewal here.

Washington Business Licensing Guide: Check this site to find licensing requirements for your business.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your business here.

Washington Department of Revenue: All businesses with $12,000 or more in revenue, or that are required to collect sales tax, are required to register with this site.

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Why choose Washington for my business?

  • 1

    Forbes “Best States for Business” (2015)
    Washington ranks #10. “Venture capitalists are always searching for the next great Washington company, pouring $2.9 billion of VC money—fifth most in the U.S.—into the state between 2012 and 2014. Though Washington does not collect personal or corporate income taxes, the business and occupation tax (B & O) affects most businesses.”

  • 2

    CBS Money Watch: “The 10 Best States for Entrepreneurs” (2015)
    Washington ranks #1. “Washington offers small businesses a high chance of survival, second only to California. In 2013, the number of businesses founded in the state was 3.5 times the number failed businesses. Washington has a high per-capita GDP of $60,476 and the sixth-lowest business tax climate score in the nation, which indicates a solid economic and business foundation for new business growth.”

  • 3

    Inc.com “Best States for Entrepreneurs” (2015)
    Washington ranks #1. “It has the second-highest new business survival rate, after California, a high per-capita GDP, and a very favorable business tax climate. Not to mention, no state income tax. GOBankingRates also praises its high number of available employees, and that number is getting higher every day. The Seattle Times recently reported that Seattle's population is growing at a clip not seen since the Gold Rush.”

  • 4

    Go Banking Rates: “10 Best States for Entrepreneurs” (2015)
    Washington ranks #1. “Other factors that help make Washington the best state for entrepreneurs is the state's large pool of available employees, equal to 5.8 percent of the state's population, and a high rate of small business lending. Even with Washington's higher-than-average cost of living, new companies can thrive in this state.”

  • 5

    Washington State Tax Incentives
    “There are over 50 tax incentive programs available for businesses. These incentives are to encourage the creation and preservation of family-wage jobs, especially in areas with high unemployment.”

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