Washington LLP Questions, Answered

What is a limited liability partnership?

Think of a limited liability partnership as an ordinary general partnership that has filed with the state to gain a liability shield. Two or more partners run a business together and share in its profits and management, but registration protects each partner from being personally liable for the negligence and misconduct of the other partners. Washington authorizes LLPs under the Revised Uniform Partnership Act in Chapter 25.05 of the Revised Code of Washington, and registration is filed with the Secretary of State's Corporations and Charities Division through CCFS.

How is an LLP different from a general partnership?

In a plain general partnership, every partner is personally liable for all of the partnership's debts and for the wrongful acts of the other partners. An LLP keeps the partnership structure but adds a shield: a partner in a registered LLP is not personally liable for partnership obligations that arise while the registration is in effect. The partnership must actually register — until it does, it is just a general partnership with full personal exposure.

How is an LLP different from an LLC?

Both provide limited liability, but they are different entity types. An LLP is a partnership, run by its partners, registered under Washington's partnership statute, and is most common among licensed professionals. An LLC is a distinct entity run by members or managers under the LLC act. They differ in governance, default tax treatment, and which professions are permitted to use them. The right choice depends on your profession's rules and how you want to be taxed — a question for an accountant.

Who can form a Washington LLP?

Any group of two or more partners going into business together can register an LLP, subject to any restrictions their profession imposes. The structure is especially common among licensed professionals — lawyers, accountants, architects, engineers, and medical or dental practices — but it is not limited to them. A single owner cannot form an LLP, because a partnership requires at least two partners.

Do I have to live in Washington to form an LLP here?

No. Washington imposes no residency requirement on the partners of an LLP. What Washington does require inside its borders is a registered agent holding a physical street address in the state. A commercial registered agent service satisfies that requirement even if no partner lives in the state.

What do I file to create the LLP?

You file the application to register as a limited liability partnership with the Secretary of State through CCFS. It captures the partnership's name, principal office address, registered agent name and Washington address with consent, and the number of partners. Washington assigns the LLP a Unified Business Identifier (UBI) number.

How long does registration take?

Online filings through CCFS generally process within a few business days. Paper filings by mail take considerably longer, often several weeks, and expedited handling is available for an additional fee. Once processed, the LLP appears in the CCFS business search.

Does my LLP need a registered agent?

Yes, at all times. Every Washington LLP must maintain a registered agent with a physical Washington street address who is available during business hours and has consented to the role. The agent receives service of process and official state mail. A partner can serve, or you can use a commercial service to keep a home address off the public record.

What annual filings does an LLP have?

Two main things at the state level. First, an annual report with the Secretary of State that keeps your agent and address current — it is not a financial statement. Second, registration with the Department of Revenue and Washington's Business & Occupation (B&O) tax, handled separately. Keeping both current preserves the LLP's good standing.

What happens if I miss the annual report?

Missing it puts the LLP's active status at risk. A partnership that lapses can lose its good standing, and a lapsed registration can put the liability shield in question. Filing on time is far easier than reinstating after the fact, so treat the annual report as a fixed obligation.

Does the partnership agreement get filed with the state?

No. The partnership agreement is an internal, private document. Washington does not require you to file it, and it never appears in the public record. It governs the partners' relationship — money, management, voting, and exits — and stays between the partners.

How is a Washington LLP taxed?

For federal purposes, an LLP is generally taxed as a partnership: it files an information return (Form 1065) and passes income and losses through to the partners, who report their shares on their personal returns. Washington has no personal or corporate income tax, so there is no state income tax at the entity level. Washington instead levies a Business & Occupation tax on gross receipts through the Department of Revenue.

What is the B&O tax?

Washington's Business & Occupation tax is a tax on the gross receipts of a business, administered by the Department of Revenue. It applies regardless of whether the business is profitable, because it is measured on gross revenue rather than net income. The rate and classification depend on the type of business activity. It is entirely separate from your Secretary of State registration.

Do I need an EIN for my LLP?

Yes. Because an LLP files a partnership tax return, it needs a federal Employer Identification Number from the IRS. You also need it to open a business bank account and to hire employees. The EIN is free and issued immediately when you apply online through the IRS.

Should partnership money be kept separate from personal money?

Absolutely. Keeping the LLP's finances strictly separate from the partners' personal finances is essential to the integrity of the entity. Commingling funds undermines the separateness the LLP relies on and can create problems if the shield is ever tested. Open a dedicated business bank account and run all partnership money through it.

What if a partner leaves or a new one joins?

Partners come and go over the life of an LLP. How that is handled — buyouts of departing partners, admission of new ones, and what a partner's exit means for the business — should be spelled out in the partnership agreement. Some changes may also require updating information with the state. This is exactly why a written partnership agreement matters.

I have an out-of-state LLP. Can it do business in Washington?

Yes, but it generally must register as a foreign LLP with the Secretary of State to transact business in Washington, which includes designating a Washington registered agent. Registering does not re-form the partnership; it grants authority to operate in Washington and typically requires a certificate of good standing from your home state.

How do I close a Washington LLP?

Winding down involves settling the partnership's affairs — paying debts, distributing remaining assets to the partners per the agreement, closing tax accounts — and filing the appropriate cancellation or withdrawal with the Secretary of State to end the LLP's registration. Doing it properly ensures the partnership is not left carrying ongoing obligations after it has stopped operating.