When it comes to being official an important thing to decide is which business structure you will use. 'Business structure' is a term used to describe who is in charge (and blame) for a businesses success (and mistakes).
Sole Proprietor: This structure is simplest to incorporate. In Washington state you only need to obtain an Employer Identification Number (EIN) from the IRS which is free and register with the Washington State Department of Revenue (DOR) who will inform you of necessary fees and taxes on the state level. The flip side of being so easy to open is that you have no protection from lawsuits and if someone takes it there, they can also come for your personal belongings, not just the business's.
Partnership: This business structure is best when there is a small team of people working together on a business venture. It is similar to Sole Proprietorship in that you only need an EIN and to register with the (DOR). Partnerships also offer no protection of personal property.
Limited Liability Corporation: These companies still need an EIN and to register with DOR but they also register with the Secretary of State (SOS). These businesses are easier to sell and offer more protection for personal property but they are more rigid when it comes to reporting, accounting and legal requirements especially if personal and business funds are not kept separate.
Corporation: A separate legal entity from its owners, governed by the laws of the state in which it is incorporated. A corporation consists of owners/shareholders, the board of directors, and various officers. Even though there are many “roles” required in a corporation, one person can still technically be in charge of them all. This structure offers more protection for investors and owners and has more protections under law. The drawback is that the income is taxed twice and they are more expensive to start and keepup.
Limited Liability Company (LLC): combines some of the benefits of a corporate structure with those of a partnership. For example, it offers limited liability of lawsuits as well as the ability for business owners to choose how profits are distributed and how management allocates profits and losses. LLCs can choose to be taxed as a separate entity like a corporation or a pass through entity like a sole proprietorship.
Which business structure(s) are you considering and why?