A Step-by-Step Guide to Applying for
Your Washington Business License
Contractors: Includes information about
registering your business.
1
Getting started
This pamphlet explains in a quick, step-by-step format how
you apply for a Washington Business License. It also includes
information for construction companies on contractor
registration requirements.
For more in-depth information on starting and operating a
business in Washington State, please see the online Washington
Small Business Guide at business.wa.gov/guide.
5
STEPS
11
Choose your business structure.
(Sole proprietor? Partnership?
Corporation? LLC?)
Page 2
22
Complete your application
for a Washington
business license.
Page 4
33
Apply to be a registered
contractor. (Skip this
step if you are not a
construction business.)
Page 6
44
Know what to do if you hire
workers. (Skip this step if it
doesn’t apply to you.)
Page 8
55
Know what to do if you use
independent contractors.
Page 9
For more information
The back cover of this
publication includes a list of
agencies, their services, and
how to contact them if you
have questions.
We recommend you review
the “Start” chapter of the
Washington Small Business
Guide at business.wa.gov.
2
1
Choose your business structure
You may operate your business under any of the business structures
below. Make this decision before you ll out any paperwork. Consider
issues such as: how many owners you will have, personal liability, the
complexity of the required paperwork, federal taxes, and whether you
plan to seek investors. You may want to consult an attorney or other
professional for advice on the best business structure for you.
Is your business a: (Choose one. More options on the next page.)
■
Sole proprietorship
Sole proprietorships are owned by a single person or a married
couple. These businesses are inexpensive to form and have
no special reporting requirements. The owner is personally
responsible (liable) for all business debts and federal taxes.
■
General partnership
General partnerships are like sole proprietorships but with
more than one owner. Partners share managerial duties, prots
and losses, and each is personally responsible (liable) for all
business debt.
Because the actions of one partner can result in personal
liability for the others, partnerships have become less popular
since limited liability companies (LLCs) have been around.
For federal tax purposes, the business is required to le a
partnership return with the income or loss going to each
partner based on how much of the business each owns.
■
Prot corporation
Corporations are more complex structures than the others.
As with limited liability companies (LLCs; see next page),
corporations have limited legal liability. To form a corporation,
you must le with the Washington Secretary of State and you
must create a governance document called “bylaws.”
Corporations also have other requirements, such as issuing
stock certicates, holding annual meetings and keeping
minutes, electing directors, etc. Working owners of corporations
are employees and must have federal payroll taxes withheld
and be reported the same as other employees. Corporations le
3
federal corporate tax returns with the Internal Revenue Service (IRS). If qualied
and applied for on a timely basis, corporations may choose “pass-through
taxation,” where income taxes are paid by the owner(s) but not also by the
corporation (“S-Corporation”).
■
Limited liability company (LLC)
LLCs have limited legal liability like corporations but have fewer governance
requirements. Creating an LLC requires ling with the Washington Secretary of State.
For federal taxes, LLCs are typically treated like sole proprietorships if there is
one owner (or a married couple), or like partnerships if there is more than one
owner. However, by ling an “entity classication election” form with the IRS,
LLCs can be treated like corporations or S-corporations for federal tax purposes.
Among other requirements, LLCs are required to create a governance document
called an “operating agreement.”
■
Other options (such as limited partnership, limited liability partnership, limited
liability limited partnership, or nonprot corporation)
These business structures are used less commonly for small businesses. Talk to
your advisor to decide if one of these makes sense for your business.
If you have selected a business structure other than sole proprietorship or partnership and
you haven’t yet registered with the Secretary of State, you must do so before going forward.
After consulting with your advisors:
■
Start with the Washington Secretary of State’s ofce.
Complete the appropriate application online and pay at sos.wa.gov/corps.
Or download forms at sos.wa.gov/corps/forms.aspx and send your completed
application with payment to the Secretary of State’s ofce (the current fee is on
the application).
The Secretary of State’s ofce will make sure that another registered business in
Washington State does not already have your business name. Your registration
document with your legal business name will be mailed to you.
The Secretary of State’s ofce will assign your business a Unied Business Identier (UBI)
number for you to use as identication with all Washington State agencies.
See Step 2 for licensing instructions for the
business structure you choose.
4
2
Complete your application for a
Washington business license
Your business must be licensed by the State of Washington as well as
by many cities where your business provides services.
Sole proprietorships and partnerships will be assigned a Unied Business
Identier (UBI) number through the state licensing process. You will use
the UBI for identication with all Washington State agencies.
1. Prepare to apply for your Washington business license.
Be ready to answer questions such as:
What will be the ofcial name of your business?
Will you be hiring employees? Will any be under age 18?
If you won’t have employees, would you like to sign up
for optional workers’ compensation coverage? (This is
insurance coverage for you and other owners if you are hurt
while working.)
See the full list of questions you must be ready to answer at
dor.wa.gov/apply.
2. Get the Washington Business License Application:
Online at dor.wa.gov/register.
In person at Washington State Department of Labor &
Industries (L&I) locations listed at Lni.wa.gov/Ofces; at
Washington State Department of Revenue locations listed at
dor.wa.gov.
3. Complete the application and pay the fee, as instructed
online or on the printed form.
5
Should you be a registered contractor?
If you do any of the following on someone else’s property, register
as a contractor with the Washington State Department of
Labor & Industries (L&I).
Construct buildings and other structures.
Do ooring, roong, siding, painting, install drywall, or similar work.
Install cabinets.
Install plumbing, electrical, HVAC, septic, or other building systems.
(See additional requirements on the next page for plumbing and electrical).
Repair or alter buildings and structures.
Plant plants, build ower or garden beds, or create a path.
Clear land, if it involves cutting trees or moving dirt.
Develop residential property for sale.
Serve as consultant or superintendent on a building project.
Add to or subtract from real property.
Clean up construction sites.
Pressure wash decks, roofs, buildings, or other structures.
You must be a registered contractor to even offer to do work. Don’t advertise or
bid a job until your registration is nalized. Once you’re registered with L&I, your
ads and bids must include the name and address you used to register and your
registration number.
Do you “flip” (buy, fix up and sell) homes or other properties you have
owned for less than one year?
If you do, you’re required to register as a general contractor, even if you hire
registered contractors to do all the work.
6
3
Apply to be a registered contractor
Skip this step if you are not a construction business.
Plumbing
■
Will you offer plumbing-related services?
If your work involves plumbing, you must be registered as
a licensed plumbing contractor with L&I and have a full-
time, certied plumber on your staff. Licensed plumbing
contractors should also be registered as general contractors
if they plan to do construction other than plumbing. Go to
Lni.wa.gov/NewPlumbingRequirements for more information.
■
Will you use subcontractors for plumbing?
You must be a general contractor to subcontract work. In
addition, general construction contractors must subcontract
all plumbing to a licensed plumbing contractor. The “specialty
plumbing” registration classication is no longer valid. Only
licensed plumbing contractors can hire certied plumbers, who
must do all the plumbing work on-site.
Electrical
■
Will you offer electrical-related services, including computer cabling,
security systems, replacing light xtures, and other activities?
If you will, you must be licensed as an electrical contractor with
L&I and have certied electricians perform the work. Go to
Lni.wa.gov/ElectricalLicensing for more information.
■
Will you use subcontractors for electrical work?
In most cases you must be a general contractor to subcontract
work to an electrical contractor.
7
Did you know?
If you change your business structure or business
name, you must get a new contractor registration.
Other Contractors
■
Obtain and complete a Construction Contractor Registration application.
Download it at Lni.wa.gov/go/F625-001-000.
Pick it up at L&I ofces listed at Lni.wa.gov/Ofces.
Call Contractor Registration at 1-800-647-0982 to request a mailed copy.
■
Purchase a bond and liability insurance. Start with your insurance agent.
*Note: Applicants must be 18 years old or older to register as a construction contractor.
Required Bond
General Contractors: $12,000.
Specialty Contractors: $6,000 (one specialty trade only). See the application form
for more information.
On July 1, 2024, bond requirements will increase to:
-
General Contractors: $30,000
-
Specialty Contractors: $15,000 (one specialty trade only). See the application
form for more information.
Or instead of purchasing a bond, you may set up a dedicated account at your bank in
Washington State. Use an Assigned Savings Account form. Download it at Lni.wa.gov/go/
F625-008-000.
Required Insurance
Minimum of $50,000 in property damage and $200,000 in public
liability insurance.
Or $250,000 in a combined, single limit policy.
Reminder: Tell your agent to provide L&I with an updated copy each time you renew
or change your policy to avoid suspension of your license. Your agent must submit this
information online.
8
4
Know what to do if you hire workers
Did you indicate on your Business License Application that you will
hire employees? If so, the state agencies with tax requirements for
businesses with employees will set up accounts for you. They will mail
you the documents you need and explain the rates you will pay.
You also will need to:
Create an accident prevention plan and meet other workplace
safety requirements.
Find out about employment rules such as minimum wage,
overtime, break requirements, paid sick leave, and authorized
payroll deductions.
Obtain a completed Parent/School Authorization form for
each employee you hire under age 18. Download the form at
Lni.wa.gov/go/F700-002-000.
Set up an employer account with the Internal Revenue Service.
The Washington Small Business Guide has more information and links
to forms you and your employees will need to complete. The guide is
online at business.wa.gov/guide. Helpful websites and numbers are
listed at the end of this publication, as well.
Bring all paperwork and payment to an L&I office
This must include:
Your payment (check, money order, VISA or MasterCard). Ask
L&I for the current contractor registration fee.
Your original completed and notarized Construction Contractor
Registration application. (Notaries are available at most L&I ofces).
Your original insurance and bond documents. (They cannot be
copies and cannot have changes, mar
ks or white-outs, which
will invalidate them.)
Drop off your application at an L&I ofce and Skip the Line by booking
an appointment online at Lni.wa.gov/SkipTheLine.
9
5
Know what to do if you use
independent contractors
Many workers consider themselves to be independent contractors. However,
based on legal denitions, they actually would be classied as employees for
minimum wage, overtime, payroll tax, workers’ compensation insurance, and
other purposes.
Steep penalties can result if you are found to be an employer and you
haven’t met employer requirements. In addition, your clients can face steep
penalties if they should have classied you as their employee rather than as
their contractor.
Carefully review the independent contractor information in
section 10 of the “Start” chapter of the online Small Business Guide at
business.wa.gov/guide.
If you determine the person you’re hiring qualies as an independent
contractor, keep the supporting business documents on le in case you
are audited.
10
More information
Your business must meet other government requirements.
Learn what those are by reading the Washington Small Business
Guide: business.wa.gov/guide. You can also get a customized
Business Licensing Guide for your business by going to
dor.wa.gov/licensewizard or calling 360-705-6741.
Office for Regulatory Innovation and Assistance:
oria.wa.gov | 1-800-917-0043
Business Licensing: dor.wa.gov | 360-705-6741
Washington’s Website for Businesses: business.wa.gov
Department of Labor & Industries:
Lni.wa.gov/SmallBusiness
Small business liaison, 1-800-987-0145
Agency information and assistance, 1-800-547-8367
Contractor registration, 1-800-647-0982
Prevailing wage requirements, 1-855-545-8163
Employment standards/workplace rights/hiring minors,
1-866-219-7321
Workplace safety and health, 1-800-423-7233
Workers’ compensation insurance, 360-902-4817
Employment Security Department: esd.wa.gov
(Employer Resources tab)
Shared Work Program, 1-800-752-2500
Unemployment tax information, 1-855-829-9243
Paid Family and Medical Leave information, 1-833-717-2273
Labor market information, 1-800-215-1617
Internal Revenue Service:
irs.gov
1-800-829-4933
The Internal Revenue
Service (IRS) is
a federal, not
a Washington State, agency.
Whether or not you plan to
hire workers, you must get
an Employer Identification
Number (EIN) for your business.
Get one at IRS.gov/ss4.
Sole proprietorships that
won’t have employees are an
exception. They can choose
to use their Social Security
number as their federal business
identification number, though
they may not want to for
security reasons.
Upon request, foreign language support and formats for
persons with disabilities are available. Call 1-800-547-8367.
TDD users, call 711. L&I is an equal opportunity employer. PUBLICATION F101-079-000 [11-2023]
