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Share articleKurt, thanks for fantastically helpful, concrete information!
Personal Trainer, Sports Nutritionist, Aquatic Therapist, Hypnotherapist
Bellevue, Washington
Bellevue, Washington
Greatly helpful
out of 10
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Getting Started with the Business
This simplifies the initial steps necessary to legally establish your business in the state of Washington.
Written Nov 02, 2008, read 305 times since then.
I found that getting over that initial hump of what to do when was the first step I needed to get going on establishing the business. First I enrolled in the Small Business Success Series course at Bellevue Community College. This extensive 2-month course included Developing the Business Plan, Marketing, Managing People, Books, Recordkeeping, and Tax Reporting, Financial Statements and Profits, Tax Management, and Creative Financing.
I want to share my experience with applying the initial steps in establishing the business. First I researched the marketability in operating a business I had in mind. Then, I conducted the following 8 procedures online:
- Conduct a Name Search with the Department of Licensing, “License Query System” www.wa.gov/dol (No cost).
- File for the business structure (i.e., sole proprietorship, corporation) with the Washington Secretary of State: www.secstate.wa.gov (Cost: $195).
- Apply for the “Master Business Application” with the Master License Service Department of Licensing: www.wa.gov/dol (Cost: $49.00–Which includes licensing the business with your assigned city and also providing you with your UBI#). Call the Master License Service: 800-829-4933 to attain this UBI# (which you must have for future reference).
- Register the trade name as a “Domain Name:” www.1and1.com (Cost: $6.99—which includes access to constructing a website).
- Secure an assigned “Employer Identification Number” (EIN or FEIN) from the Department of the Treasury Internal Revenue Service, SS-4: IRS.gov / 360-725-0377 (No cost).
- Attain a “Pre-assigned Access Code” (PAC) from the Secretary of State WA: 800-647-7706 (No cost). You'll need this PAC to have the Department of Revenue web access.
- Establish your business account profile with the Department of Revenue (DOR): DOR.wa.gov / 800-647-7706 (this generates your “Washington State Department of Revenue State Business Records Database Detail” to print out as it is required by the bank).
- Now open a business checking account at a bank that handles business banking. Note: There are banks that offer Free Business Checking with no minimum balance. So don’t open an account with the first bank you come across, or else you may have to pay exorbitant service fees.
This sequence of processing the initial paperwork for establishing the business is what I found out the hard way. This guideline will save you a lot of time by not having to search for the contact information on your own. Good luck with the new business!
Learn more about the author, Kurt Lehman.
Comment on this article
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Posted by Kate Phillips, Carnation/Seattle, Washington | Nov 06, 2008 -
Posted by Molly Maloney, Seattle, Washington | Nov 06, 2008Hi Kurt! I'm a business attorney and corporate formation is a large part of my practice. Unfortunately, you've got some incorrect and incomplete information here.
Your name search should include not just the DoL, but the Secy of State’s office, the Dept. of Revenue, and possibly, the USPTO.
You need to choose your business entity BEFORE getting a business license, per the requirements of the DoL. This means that if you want to be an LLC , Inc., or NPO, your first stop, after doing a name search, will be the Secy of State’s office for your formation. This will cost $195 if you do it online and will provide you with your UBI.
If nothing else, incorporating FIRST prevents you from ever being in the position of doing business as a sole proprietorship or partnership when you actually want to be incorporated. You put your liability protection at risk otherwise.
If you are going to remain a sole proprietorship or a partnership, you don’t need to do anything with the SoS. In this case, you can go through the DoL as you've stated in the article.
The MBA will NOT get you your city business license for most cities. Currently only 20 cities have co-licensing via the MBA.
The cost of getting a state business license will depend on the number of dbas you choose and the city in which you’re getting a license. The basic MBA, however, costs $20 + $5.00 per dba. City licenses can range from $15 to $100+. You also need to review whether your business requires you to have a special license. The cost of a special license varies widely and depends on the industry.
Filing your MBA will automatically register you with the Department of Revenue and create the database record. In addition the PAC is automatically issued and is found below your address on your tax return. Only if you do not receive a return do you need to ask the DoL for the access code.
If you are choosing to be taxed as an S-corporation, you will need to complete the appropriate IRS forms within 75 days following formation.
If you’ve incorporated your business, your bank will likely want to see your Articles of Incorporation or Certificate of Formation and your bylaws or operating agreement before they will issue you an account in the corporate name. Be very wary of using pre-packaged bylaws or agreements; many of them are unfriendly to small businesses because they leave out key provisions and add unnecessary ones.
I strongly recommend that new businesses – or businesses looking to change from sole proprietorships or partnerships to incorporated entities – use an attorney. There are several places in the formation process where it’s just too easy to stumble, so your attorney will ensure it’s done properly right from the start. I know that small start-ups are very budget conscious, but formations are often done on a flat fee basis and aren't hugely expensive - especially compared to the costs of corrections or litigation due to mistakes. As I tell my clients: “Help me” is always cheaper than “Fix me!”
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Posted by Kurt Lehman, Bellevue, Washington | Nov 07, 2008Thanks Molly,
You're right, there is a typo. The Secretary of State sharges $195 to file the business structure. I will make that correction. Otherwise, I filed as an LLC, so I only needed to do what I did and they were satisfied.
When I filed for the MBA it automatically offerred me the licensure with the city of Bellevue (included in the application form online) it made it handy for me that way. I didn't know it didn't do this for other cities however.
-Kurt
