Sole Proprietorship in Washington: How to Start One

A sole proprietorship is the default business structure in Washington: if you start doing business by yourself and don't file paperwork to form an LLC or corporation, you're already operating as a sole proprietor. There's no Certificate of Formation, no Secretary of State filing, and no annual report requirement for this structure, because it isn't a separate legal entity. That's also its biggest drawback: you and the business are legally the same, so your personal assets (house, car, savings) are exposed if the business is sued or can't pay its debts.

Even though Washington doesn't require you to "form" a sole proprietorship, most sole proprietors still need to register with the state before they start collecting money. This guide walks through exactly what to do, in order, using the actual Washington agencies and fees involved.

Materials You'll Need

Your legal name (this is your default business name unless you register a trade name)
A trade name or "doing business as" (DBA) name, if you plan to operate under something other than your own full legal name
Your Social Security Number, or an Employer Identification Number (EIN) from the IRS if you'll hire employees or prefer not to use your SSN on business forms
Washington State Business License Application (filed through the Department of Revenue's Business Licensing Service)
Payment for the state processing fee, plus any city, county, or industry-specific license fees
A separate business bank account (recommended, not legally required)
Any professional licenses your trade requires (contractor, cosmetology, food service, etc.)

Step-by-Step: Starting a Sole Proprietorship in Washington

1. Confirm a sole proprietorship fits your situation

Before you start a sole proprietorship in Washington, understand what you're accepting: unlimited personal liability for business debts and lawsuits, and no legal separation between your personal and business income for liability purposes. If you're planning to bring on partners, raise outside money, or want liability protection, an LLC (filed with the Secretary of State for a $180 filing fee) may be worth a look instead. If you're testing an idea, freelancing, or running a low-risk side business, sole proprietorship is usually the simplest and cheapest way to get started.

2. Decide on your business name

As a Washington sole proprietor, your legal business name is your own full name by default (for example, "Jane Alvarez"). You do not need to file anything with the Secretary of State to use your own name. If you want to operate under a different name, such as "Cascade Landscaping" instead of your own name, that's a trade name and it needs to be registered separately (see Step 3). It's worth checking the Secretary of State's business search tool at ccfs.sos.wa.gov/#/BusinessSearch before you commit to a name, to see whether a similarly named registered entity already exists in the state, even though this search doesn't cover unregistered sole proprietor names.

3. Register a trade name, if you're using one

If you'll operate under any name other than your own legal name, Washington requires you to register that trade name with the Department of Revenue's Business Licensing Service, not the Secretary of State. This is filed as part of the Business License Application. The fee is $5 for each trade name registered, in addition to the Business License Application processing fee itself ($50 to open or reopen a business, or $10 if you're only adding a trade name to a business that's already licensed). More detail is on the state's trade name page at dor.wa.gov/manage-business/grow-business/register-trade-names.

4. Get an EIN from the IRS, if you need one

A sole proprietor without employees can typically use their Social Security Number for tax purposes and isn't required to get an EIN. That said, many sole proprietors get one anyway, since it's free from the IRS and lets you avoid putting your SSN on client-facing paperwork. You'll need an EIN if you plan to hire employees, and some banks require one to open a business bank account even for a solo operation.

5. File the Washington State Business License Application

This is the step most sole proprietors can't skip. Washington requires you to file a state Business License Application, administered by the Department of Revenue's Business Licensing Service, if any of the following apply: you need city, county, or state endorsements; you're operating under a name other than your own full legal name; you plan to hire employees within 90 days; you sell anything subject to sales tax; your gross income is $12,000 per year or more; you owe any tax or fee to the Department of Revenue; you buy or process specialty wood products; or you meet the state's economic nexus thresholds. In practice, that covers nearly every sole proprietorship doing real business in the state.

The application issues a 9-digit Unified Business Identifier (UBI) number, which functions as your account number with the state and most local licensing authorities. The processing fee is $50 to open the business, plus any separate endorsement fees for specific licenses. Filed online, it generally takes about 10 business days, with an added 2 to 3 weeks if city or state endorsements need review. Mailed applications can take up to six weeks, so file online if you're on a deadline. Apply at dor.wa.gov/open-business/apply-business-license.

6. Register for state and local taxes

Washington has no personal income tax and no corporate income tax, which surprises a lot of new sole proprietors. Instead, virtually every business pays the state Business and Occupation (B&O) tax, a gross receipts tax with more than 50 activity classifications and no deduction for labor, materials, or other costs. Your B&O tax registration happens automatically through the Business License Application. Keep in mind that many Washington cities also levy their own separate local B&O tax, which the Department of Revenue does not administer or collect, so check with your city if you operate a physical location or perform services there.

If you sell taxable goods or services, you'll also need to collect and remit Washington's state sales tax, currently 6.5% before local add-ons. The sales tax permit is issued as part of the same Business License Application process linked above, through the Department of Revenue at dor.wa.gov.

7. Check for city, county, and industry-specific licenses

Your state Business License Application covers state-level requirements, but many Washington cities and counties require their own separate general business license or endorsement on top of it, and certain trades (contractors, food service, childcare, cosmetology, and others) require additional professional or health licenses. These are typically requested as endorsements within the same Business License Application, but confirm with your specific city hall or county auditor, since requirements vary widely across Washington's cities.

8. Open a separate business bank account

Washington law doesn't require a sole proprietor to keep a separate bank account, but it's one of the most important habits you can build early. Commingling personal and business funds makes bookkeeping harder, complicates tax filing, and can undermine your ability to claim business expenses if you're ever audited. Most banks will ask for your UBI number and, if you have one, your EIN, to open a business account under a trade name.

9. Understand your ongoing obligations

Unlike an LLC or corporation in Washington, a sole proprietorship has no annual report to file with the Secretary of State, since it was never registered there as an entity. Your ongoing state obligations are mainly tax related: filing B&O tax returns on the schedule the Department of Revenue assigns you (monthly, quarterly, or annually based on your revenue), remitting collected sales tax, and renewing your city or county license if one applies. Missing a B&O filing period, even with $0 owed, can still trigger penalties, so don't let a filing period lapse just because business was slow.

Tips and Common Mistakes to Avoid

Don't assume "no formation filing" means "no license needed." Sole proprietorships skip the Secretary of State step, but most still need the state Business License Application, and skipping it can mean penalties once the Department of Revenue notices unregistered income.
Don't forget the trade name registration if you're using a business name. Operating as "Evergreen Pet Sitting" without registering that trade name with the Business Licensing Service is a compliance gap even though it costs only $5 to fix.
Don't overlook local B&O tax. The state B&O tax and a city's separate B&O tax are billed and filed independently; registering with the state doesn't automatically cover a city requirement.
Don't skip liability planning just because formation is easy. Unlimited personal liability is the tradeoff for sole proprietorship's simplicity. General liability insurance is worth pricing out even if you never form an LLC.
Don't wait on the sales tax permit if you're already selling. Collecting sales tax without being registered creates a liability you'll need to true up later.

What You Can Generally Expect

If you complete the Business License Application online with all the endorsements you need identified up front, you should generally receive your UBI number and license within roughly 10 business days, though this can typically run 2 to 3 weeks longer if city or state endorsements require separate review, and longer still if you mail a paper application. Once licensed, most sole proprietors find that ongoing compliance mainly comes down to filing B&O tax returns on schedule and renewing any local licenses annually. Individual timelines and requirements can vary by industry, city, and the specific endorsements your business needs, so treat these as general expectations rather than guarantees.

For free, one-on-one help working through your specific situation, the Washington Small Business Development Center (wsbdc.org) and the SBA's Seattle District Office (sba.gov/district/seattle) both offer no-cost counseling for new sole proprietors.

Disclaimer

This article is for informational purposes only and does not constitute legal or tax advice. Fees, processing times, and requirements can change, and your specific situation, industry, or city may involve additional obligations not covered here. Consult a licensed attorney or CPA before making decisions about your business structure, taxes, or liability exposure.