What is the difference between a corporation and a limited liability company (LLC)?
A corporation is an independent legal entity. It has shareholders, therefore personal control is limited. Generally, the owners (shareholders) of a corporation are not personally liable for debts of the corporation (limited liability). The structure of the company includes the shareholders (owners), Board of Directors, and Officers (i.e. President).
A limited liability company (LLC) also offers limited personal liability for the owners, but the structure and administration of an LLC is less complicated. It has only members or managers.
There are other differences related to taxation, liability and governance, which should be discussed with an attorney or CPA.
What is the difference between Manager and Member in an LLC?
Owners, or Members, of an LLC participate equally in the management of their LLC while a Manager might be a person that is specifically hired to manage the LLC. This could be a Member, an outsider, or an outsourced job.
What is a UBI number and where do I get it?
The Unified Business Identifier (UBI) number is a unique number that is assigned to your business when you register with the Washington Secretary of State to form a corporation, limited liability company, limited partnership, or other business entity. If your business is not a type required to be registered with the Secretary of State, your UBI number will be provided when you complete a Master Business Application with the Department of Revenue. The UBI number will be used with other state agencies for filing, taxes, and identification.
What is the difference between the UBI number and the Federal EIN number?
The UBI (Unified Business Identifier) is a state issued number and identifies your business for all Washington State agencies. The Federal Employer Identification Number (FEIN) is issued by the Internal Revenue Service and identifies your federal tax account. The FEIN is similar to a Social Security Number for your business and will be used for federal tax filings and to open business bank accounts.
What is a Registered Agent? Does my business need one?
All corporations, LLCs, and registered limited partnerships doing business in Washington must have a Registered Agent with a Washington State address. The Registered Agent must provide a physical address where the agent is available for service of legal process. The Registered Agent may be an individual or any other organization qualified to do business in Washington. The Registered Agent receives license renewals and other notices and also accepts legal papers served on the corporation.
Do I incorporate first or file the Master Business Application first?
You should file with the Secretary of State to form your business before filing the Master Business Application with the Department of Revenue. However, if you are starting a general partnership or sole proprietorship, you do not have to file with the Secretary of State and may complete the Master Business Application with the Department of Revenue.
Do I have to file an Initial Annual Report with the Secretary of State?
If you filed for a profit corporation or a limited liability company, the Initial Annual Report is due within 120 days of your initial filing. Failure to file the Initial Annual Report might result in an administrative dissolution. Non-profit corporations, sole proprietorships, and general partnerships do not have to file an Initial Annual Report.
I am closing my corporation. What are the steps?
You must first complete an “Application for Withdrawal or Dissolution of a Corporation” with the Department of Revenue. Once you receive a “Revenue Clearance Certificate”, that should be provided to the Secretary of State along with your Articles of Dissolution. Additional matters will include paying all creditors and employees, distributing any remaining assets, and winding up the business.