Washington LLCs Made Easy
Business Owner or Real Estate Investor?
Washington State makes it very easy to form a new limited liability company. As a result, Washington State real estate investors and small business owners need to think about this option even for the smallest businesses and the most modest real estate investments.
To form an LLC in Washington State, for example, the LLC organizer needs only to file a paper articles of LLC formation with the Secretary of State (the standard articles are two pages in length.) Or the organizer needs to step through a simple online application process at the Secretary of State's website. The price for filing articles of LLC formation runs, currently, from $180 for a paper filing to $230 for an expedited filing or an online filing. (Expedited and online filing means your LLC gets set up almost instantaneously. With online filing, for example, if you step through the online application on Tuesday afternoon, the Secretary of State's office will make your LLC effective date that Tuesday afternoon.)
Because Washington State does make the formation of a limited liability company so straightforward, many experienced business owners and veteran real estate investors don't need to work with an attorney, accountant, or online incorporation service. Rather, with just a little bit of help including examples of the forms and boilerplate legal documents, these individuals can often set up their own entities. And that's why I've created some simple, do-it-yourself instruction kits, as described in more detail below:
Premium Washington Kit Recommended for Small Businesses
Small business owners will probably want to look at the premium version of the LLC kit provided for Washington State businesses. The $44.95 kit, which you download at time of purchase, describes the big picture stuff concerning a Washington LLC (including the legal and tax benefits as well as the disadvantages and drawbacks), the procedures for instantly creating an LLC using the Washington Secretary of State's online web application, and the extra steps required to license the business in Washington state and to get a taxpayer identification number (also known as an EIN) from the Internal Revenue Service.
Because a limited liability company has the option to make tax elections with the IRS that allow the LLC to be treated for tax accounting purposes as a corporation or S corporation, the kit also discusses these options and then describes the steps for making these elections. Note that an S election can commonly save a small business owner many thousand dollars a year in either payroll or income taxes.
Finally, the kit includes sample limited liability company operating agreements for both one owner and multiple owner limited liability companies. These sample documents, available as rich-text-format word processing files, can be opened and then edited by any popular word-processing program including Microsoft Word.
If you're at the point where you want to purchase, download and then set up your LLC, great. Just click the button that follows:Purchase and Download
Economy Washington Kit Good Bet for Real Estate Investors
Real estate investors also get great protection and legal benefits from holding their properties inside an LLC. This approach to ownership means, for example, that in a worst-case scenario, the LLC's owners lose only their investment in the LLC and don't risk personal assets held outside the LLC. But real estate investors typically don't want to elect to have the LLC treated as a corporation. More typically, real estate investors let the LLC that holds real estate get the "default tax treatment" which means in case of a one owner LLC, that the LLC just gets ignored and the real estate investor reports the property income and deductions on a Schedule E form inside his 1040 tax return. In the case of a multiple owner LLC, the LLC gets treated as a partnership and reports the real property income and deductions on a partnership return.
If, therefore, you're setting up an LLC for real estate investment and you're ready to begin, consider the economy version of the Washington LLC kit provided here. The economy kit provides everything available in the premium kit EXCEPT for the discussion of and instructions for electing corporation tax treatment. The economy kit does, for the record, include the sample LLC operating agreements. Click the button below to purchase the download:Purchase and Download