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Washington Business License Basics

By: Startup 101
Last Updated: November 15, 2024

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Turning your business idea into reality in Washington involves several phases, including registration. If you’re unsure about the paperwork and organizations involved, you’re not alone.

This guide provides a clear outline of the business registration process in Washington, and we’ll walk you through each step, from selecting a business structure to obtaining the necessary licenses so you can get started right.

Related: Starting A Business In Washington Checklist  

Step 1: Business Structure

The first step in registering a business in Washington State is selecting a business structure.

A business structure, also called a business entity, is a legal structure under which your business operates. It determines your legal and financial responsibilities, tax liabilities, and the extent of personal asset protection. There are four common types of business entities: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

Related: Comparison of Business Structures

Sole proprietorship: This is the simplest business structure in which the owner and the business are legally considered one and the same. The advantages of a sole proprietorship include ease of formation, low start-up costs, and direct control over business decisions. However, the major drawback is the lack of personal asset protection, as the owner’s personal assets can be seized to cover business debts.

Related: How to Start a Sole Proprietorship in Washington

General partnership: In this business structure, two or more individuals share ownership, management responsibilities, and financial liabilities. Like a sole proprietor, each partner has unlimited personal liability for the business’s debts and obligations. The benefits of a general partnership include shared risk, combined expertise, and minimal start-up costs. However, the partners’ personal assets can be at risk, and without a partnership agreement, disagreements among partners may impact business operations.

Corporation: A corporation is a separate legal entity from its owners (shareholders). It provides limited liability protection, and unlike a sole proprietor or partnership, the shareholders’ personal assets are protected from the business’s debts and obligations. The corporation is taxed separately from its owners and can raise capital by issuing shares. The drawbacks of a corporation include higher start-up costs, more complex regulations, and potential double taxation (taxes on both corporate income and shareholder dividends).

RelatedHow to Form a Washington Corporation

Limited Liability Company (LLC): An LLC is a hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership or sole proprietorship. The owners, referred to as members, are protected from personal liability from the business’s debts and obligations. LLCs can be taxed as a sole proprietorship, partnership, or corporation, depending on the number of members and their preferences. The main advantages of an LLC include personal asset protection, flexible management, and pass-through taxation. However, LLCs may face higher start-up costs and more administrative requirements compared to sole proprietorships and general partnerships (though it is less than the corporation).

Related: How to Form a Washington LLC

Step 2: Business Name

After selecting a business structure, many businesses in Washington will need to register a business name.

Sole proprietorships and general partnerships in Washington have the option to operate under the owner’s legal name by default. However, if they wish to use a specific business name, they must complete a Washington Trade Name registration, also known as a DBA (Doing Business As).

For example, a sole proprietor starting a bakery in Seattle might decide to register a trade name. If the owner’s name is John Smith, he could choose to operate as “John Smith” without additional registration. However, if he prefers a distinct name like “Emerald City Pastries,” he would need to register this trade name with the state. Before finalizing their choice, they should do a Washington business name search on the Washington Secretary of State’s website to ensure the name isn’t already in use by another business in the state, as each name must be unique.

Corporations and LLCs typically don’t need to register a DBA as they choose a business name at the time of formation. This allows them to operate multiple businesses under one legal entity, maintaining the liability protection of their original structure.

Step 3: Federal Employer Identification Number 

For many businesses, the next step is obtaining a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This unique nine-digit number, issued by the Internal Revenue Service (IRS), is a federal tax ID for your business.

An EIN is necessary for several types of businesses. You’ll need one if your business has employees or operates as a corporation, partnership, or multi-member LLC.

Sole proprietorships and single-member LLCs without employees can use the owner’s Social Security number for tax purposes; they can obtain an EIN anyway.

Obtaining an EIN is straightforward and can be completed quickly. The IRS provides a free online application system and typically issues the number immediately upon successful submission. For those who prefer traditional methods, applications can also be submitted by mail or fax using Form SS-4, although these options may take longer to process.

How to Apply for a FEIN

Step 4: Professional & Industry Licensing

Many professions in Washington require registration and licensing before offering services legally in the state. The Washington State Department of Licensing manages many professional licenses, but some professions have their own dedicated boards.

Some common professions requiring licenses by the Department of Licensing include:

  • Real estate agents and brokers
  • Accountants (CPA)
  • Architects
  • Engineers
  • Nurses and other healthcare professionals
  • Lawyers
  • Trades like electricians, plumbers, and contractors

Outside of professional licenses, there are several industries that require specific licenses or permits in Washington. These include:

  • Food Service: Washington State Department of Health
  • Childcare: Washington State Department of Children, Youth, and Families

Step 5: State Business License

The Washington State Business License is a requirement for most businesses operating in the state. This unified licensing system simplifies the process of registering with multiple state agencies.

You need a Washington State Business License if your business:

  • Sells products or services subject to sales tax (Sales Tax Registration Number)
  • Has a gross income of $12,000 or more per year
  • Operates under a name different from your full legal name
  • Requires city and state endorsements
  • Plans to hire Washington employees within the next 90 days
  • Buys or processes specialty wood products

This license applies to nearly all business types, including sole proprietorships, partnerships, LLCs, corporations, and non-profit organizations.

To obtain your Washington State Business License, visit the Washington Department of Revenue website  My DOR, or by mailing in the Business License Application Form (BLS-700-028).

After submitting your application, you’ll typically receive your license within 10 business days. This license will include your Unified Business Identifier (UBI), a 9-digit number that identifies your business with state agencies.

Step 6: Reseller Permit

After getting their State Business License, many businesses will want to get a Washington Reseller Permit, which allows them to purchase goods without paying sales tax at the time of purchase. Instead, they will collect sales tax from the end customer when the product is sold.

Who needs a Reseller Permit?

  • Retailers purchasing inventory to sell to customers
  • Wholesalers buying goods to resell to other businesses
  • Manufacturers acquiring materials to create products for sale
  • Service providers who include products as part of their services

Step 7: Local Business Licenses

he Washington State business license, many cities and towns also mandate local business licenses. Here are some common types of local licenses in Washington:

  • General Business License: Most cities require a general business license to operate within city limits. This license is typically issued by the city’s Finance or Revenue Department. For example, the City of Seattle requires a general business license issued by its Department of Finance and Administrative Services.
  • Food Service License: Restaurants and food vendors usually require special permits at both state and local levels. For example, the City of Bellevue requires food-based businesses to obtain a license from their Tax Division and health permits from King County.
  • Home-based Business License: Some cities require specific licenses for home-based businesses. For example, the City of Vancouver requires home-based businesses to obtain a license.
  • Specialty License: Certain types of businesses may require specific licenses at the local level. For example, the City of Spokane requires mobile food vendors operating in the city to be licensed.

Licensing requirements vary significantly between cities in Washington. Business owners should check with their local government offices for accurate and up-to-date licensing information and obtain the required state business license.

Step 8: Local Building & Zoning Permits

Before committing to a location for your business, it’s important to investigate local building and zoning regulations. Here’s an overview of the requirements:

Zoning Regulations: Zoning laws specify which areas are designated for commercial, residential, industrial, or mixed-use purposes and dictate where different types of businesses can operate within a city or county. Check with your local planning or zoning department to confirm that your intended business activity is permitted at your chosen location.

Home-Based Business Regulations: If you’re planning to operate a business from your home, check local regulations. Some areas have specific rules for home-based businesses, which may limit factors such as the number of employees, customer visits, or external changes to your property.

Building Permits: If you plan to construct a new building or make significant modifications to an existing structure, you’ll likely need building permits.

Certificate of Occupancy: Many municipalities in Washington require a Certificate of Occupancy before a business can begin operations in a building. This document certifies that the building complies with all building codes and is safe for occupancy.

To navigate these requirements, you’ll typically work with your local city or county’s building department, planning department, or permitting office. These departments can provide specific information about the regulations and processes relevant to your business location.

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For only $99, you can save a lot of time and know your business complies with local, state, and federal requirements.


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