Networking

Business networking is now held quarterly and is FREE. All business owners and managers are welcome. We encourage brick-and-mortar, home-based, crafters, MLM distributors, and contractors. The place and time will be posted for January by mid-December.

How to Set Up a Business in the State of Washington

Starting a business in the State of Washington can be a rewarding endeavor, thanks to its vibrant economy, supportive business environment, and diverse communities. Whether you’re launching a tech startup in Seattle or a small boutique in Ocean Shores, following these steps will help you navigate the process smoothly.

First, we will cover the basic steps for a “business license”.

Complete the Business License Application

The Washington Business License Application is available online and can also be submitted by mail or in person.

To apply online:

1. Visit the Washington Department of Revenue’s My DOR: See the My DOR video.
2. Create an Account or Log In: If you don’t already have an account, you’ll need to create one.
3. Start a New Business License Application: Follow the prompts to start a new application.
4. Provide Business Information: Enter details about your business, including the legal structure, ownership, business activities, and contact information.
5. Select Licenses and Permits: Indicate the specific licenses and permits your business requires. Note: for Ocean Shores you do need an “endorsement”; the DOR walks you through this process when registering your business license.
6. Review and Submit: Double-check the information and submit the application.

You will receive your business license, with any endorsements listed. Do not begin any business activity until you receive this license. Post the license at each business location.

7. If you sell merchandise you will also need a resellers permit.

To apply by mail:

1. Download the Business License Application Form on the DOR site: Business License Application.
2. Complete the Form: Fill out all required sections with accurate information.
3. Attach Required Documents: Include any necessary additional documents or forms specified in the instructions.
4. Mail the Form: Send the completed application and documents to: Business Licensing Service PO Box 9034 Olympia, WA 98507-9034

To apply in person:

1. Complete the Business License Application Form: Fill out the form as detailed above.
2. Visit a Business Licensing Office: Submit the form in person at a local office. Find a location near you on the Washington Department of Revenue’s website.

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Next, we will cover “in general” how-to set up a business.

Further into this information, we will list “specific” steps.

Lastly, we will cover steps on obtaining an EIN.

1. Choose Your Business Structure

Decide on the type of business entity that best suits your needs. Common structures include:

• Sole Proprietorship: Simple and straightforward, but the owner is personally liable for business debts.
• Partnership: Involves two or more people. Can be general (equal responsibility) or limited (limited liability for certain partners).
• Limited Liability Company (LLC): Offers liability protection while being relatively easy to manage.
• Corporation: More complex, providing the most liability protection but with more regulatory requirements.
• Nonprofit Organization: Focuses on charitable, educational, or social missions, eligible for tax-exempt status.

2. Register Your Business Name

Your business name should be unique and not already in use. Conduct a name search through the Washington Secretary of State’s website to ensure availability. Once confirmed, register your business name by filing a Business License Application.

3. Obtain an EIN (step by step listed below at end of post)

An Employer Identification Number (EIN) is necessary for tax purposes. You can apply for an EIN through the IRS website. This number is used for various tax filings and is essential if you plan to hire employees.

4. Register with the Secretary of State (step by step listed below)

Depending on your business structure, you may need to register with the Washington Secretary of State. LLCs, corporations, and limited partnerships must file formation documents and pay the associated fees.

5. Apply for Business Licenses and Permits (step by step listed in beginning of post)

Washington requires a state business license for most businesses. Additionally, specific industries may need additional permits or licenses. You can apply for these through the Department of Revenue’s Business Licensing Service.

6. Understand Your Tax Obligations

Familiarize yourself with Washington’s tax requirements. The state does not have a personal income tax, but there are other taxes you may need to pay, such as:

• Business and Occupation (B&O) Tax: A gross receipts tax on the value of products, gross proceeds of sales, or gross income of the business.
• Sales Tax: If you sell goods or services, you’ll need to collect sales tax and remit it to the state.

Register with the Department of Revenue to handle these tax obligations.

7. Set Up Your Business Finances

Open a separate business bank account to manage your finances and keep your personal and business expenses separate. Consider using accounting software to track income, expenses, and prepare for tax time.

8. Get Insured

Business insurance protects your company from potential risks. Common types of business insurance include:

• General Liability Insurance: Covers legal fees and damages if your business is sued.
• Property Insurance: Protects your business property from damage or loss.
• Workers’ Compensation Insurance: Required if you have employees, covering medical expenses and lost wages in case of work-related injuries.

9. Hire Employees

If you plan to hire employees, ensure you comply with employment laws. This includes:

• Federal and State Employment Laws: Understand minimum wage requirements, overtime regulations, and anti-discrimination laws.
• Payroll Taxes: Withhold federal and state income taxes, Social Security, and Medicare from employee wages.
• Workers’ Compensation: As mentioned, this is mandatory if you have employees.

10. Market Your Business

Create a marketing plan to attract customers. Consider both online and offline strategies, such as:

• Building a Website: Establish an online presence to showcase your products or services.
• Social Media Marketing: Use platforms like Facebook, Instagram, and LinkedIn to reach your target audience.
• Networking: Join local business groups, such as the Ocean Shores Networking Group, to connect with potential clients and partners.

11. Maintain Compliance

Stay compliant with state regulations by:

• Filing Annual Reports: Most businesses must file an annual report with the Washington Secretary of State.
• Renewing Licenses and Permits: Ensure all licenses and permits are up-to-date.
• Staying Informed: Keep up with changes in state laws and regulations that may affect your business.

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Specific Steps to Registering with the Secretary of State in Washington

Registering your business with the Washington Secretary of State is an essential step if you are forming an LLC, corporation, or limited partnership. Here’s a detailed guide to help you through the process:

1. Choose Your Business Structure

Before registering, decide on your business structure: Limited Liability Company (LLC), Corporation, or Limited Partnership. Each has different requirements and implications for liability, taxes, and management.

2. Choose a Business Name

Ensure your business name is unique and complies with Washington state naming rules:

• It must be distinguishable from existing businesses.
• It should not contain restricted words unless you meet certain legal requirements.

You can check name availability through the Washington Secretary of State’s website.

3. Appoint a Registered Agent

Your business must have a registered agent in Washington. This is an individual or company authorized to receive legal documents on behalf of your business. The agent must have a physical address in Washington. As a business owner, you can list yourself as the agent.

4. File the Formation Documents

Prepare and file the appropriate formation documents with the Secretary of State:

• For an LLC: File the Certificate of Formation.
• For a Corporation: File the Articles of Incorporation.
• For a Limited Partnership: File the Certificate of Limited Partnership.

You can file these documents online through the Washington Corporations and Charities Filing System or by mail.

5. Pay the Filing Fee

Pay the required filing fee when submitting your formation documents:

• The fee for filing an LLC Certificate of Formation is $200.
• The fee for filing Articles of Incorporation for a corporation is $180.
• The fee for filing a Certificate of Limited Partnership is $180.

Fees are subject to change, so check the latest fee schedule on the Secretary of State’s website.

6. Draft an Operating Agreement or Bylaws

Although not required to be filed with the state, having an operating agreement (for LLCs) or bylaws (for corporations) is essential. These documents outline the management structure and operating procedures of your business.

7. Obtain an Employer Identification Number (EIN) (see section below for step by step instructions)

Apply for an EIN from the IRS if you haven’t already. This number is necessary for tax filings, opening a business bank account, and hiring employees.

8. File Initial Report

After your business is registered, you may need to file an Initial Report within 120 days of formation. This report includes information about your business and registered agent. The filing fee is $10.

9. Maintain Ongoing Compliance

After registration, you must stay compliant with state regulations:

• File an Annual Report: Due by the end of the month in which your business was formed. The fee is $60.
• Renew Business Licenses and Permits: Ensure all required licenses and permits are up to date.

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Steps to Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is essential for most businesses as it is used for tax reporting, opening business bank accounts, and hiring employees. Here’s a step-by-step guide to help you obtain an EIN:

1. Determine Your Eligibility

• Business Location: Your principal business must be located in the United States or U.S. Territories.
• Responsible Party: You must have a valid Taxpayer Identification Number (Social Security Number, Individual Taxpayer Identification Number, or another EIN) to apply.

2. Prepare the Required Information

Before you start the application, gather the following information:

• Legal name of the business entity or individual applying for the EIN.
• Trade name (if applicable).
• Mailing address.
• Name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the principal officer, general partner, grantor, owner, or trustor.
• Type of entity (e.g., LLC, corporation, sole proprietorship).
• Reason for applying (e.g., starting a new business, hiring employees).

3. Apply Online

The quickest and most efficient way to obtain an EIN is through the IRS website. The online application process is available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time.

Steps to apply online:

1. Go to the IRS EIN Application Page: Apply for an EIN Online.
2. Begin Application: Click “Apply Online Now” and then “Begin Application.”
3. Select Your Entity Type: Choose the type of legal structure for your business (e.g., Sole Proprietorship, Partnership, Corporation, LLC).
4. Provide Details: Enter the required information about your business and the responsible party.
5. Review and Submit: Double-check your entries for accuracy and submit the application.
6. Receive Your EIN: Upon completion, you will receive your EIN immediately. Be sure to save and print the confirmation notice for your records.

4. Apply by Fax

If you prefer not to apply online, you can apply by fax:

1. Complete Form SS-4: Download and complete Form SS-4.
2. Fax the Form: Fax the completed form to the appropriate IRS fax number based on your state. The processing time is typically four business days.

5. Apply by Mail

You can also apply by mail, but this method takes the longest:

1. Complete Form SS-4: Download and complete Form SS-4.
2. Mail the Form: Mail the completed form to: Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999

The processing time for mail applications is typically four weeks.

6. Apply by Phone (International Applicants)

If you are an international applicant without a legal residence or principal place of business in the U.S., you can apply by phone:

1. Complete Form SS-4: Download and complete Form SS-4.
2. Call the IRS: Call the IRS at 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. Eastern Time, Monday through Friday.

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