By The Wyoming LLC Attorney TeamAug 24, 2022
This article discusses the process of starting a corporation in Washington state. It explains the concept of a corporation, its types (S and C corporations), and the steps involved in forming one. Steps include selecting a corporate name, submitting articles of incorporation, choosing a registered agent, and creating corporate bylaws.
A corporation is a legal structure where the state sees the entity as separate from its owners. Therefore, a vital element of a corporation is its limited liability. The shareholders are not personally liable for the company’s debts. They have similar rights and responsibilities as an individual. This means that a corporation can enter into contracts, hire employees, own assets, file taxes, sue and be sued, and loan or borrow money. Either an individual or a group of people may form a corporation if they have a shared goal. Corporations are not always meant to obtain a profit.
Most large businesses are corporations. Some examples include the Coca-Cola Company, Apple, Google, and Microsoft Corporation. Some corporations operate under their name, but there are also some that act under separate business names. An example is Alphabet Inc. which does its business under Google.
The exact legal definition for corporations differs depending on their location, but a key feature of corporations is their limited liability, as previously stated. This means that corporation shareholders can participate in the profits through dividends and stock appreciation. However, they are not personally responsible for the corporation’s debts or liabilities.
There are two main types of corporations: S and C. The primary difference between these two is how you pay tax on any income. S corporations don’t pay tax; the individual owners report the company earnings on their personal income tax returns. On the other hand, C corporations pay tax on their income, and so do any owners or employees of the corporation. Other differences between these two types of corporations include formation and ownership. See below for additional information.
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There are several critical steps to forming a corporation in Washington state. It is similar to filing an LLC, except instead of submitting articles of organization, you will file articles of incorporation.
The first step to forming a corporation is choosing your corporation name. The name must contain the words “corporation,” “incorporated,” “limited,” or “Company” or any of their associated abbreviations (Corp., Inc., Ltd., Co.).
For Washington’s Secretary of State to approve your name, it must be different from any name of other business entities already listed in Washington. To check if your name is available, you may search the Washington Secretary of State business name database.
You can submit a Name Reservation form to the Washington Secretary of State. When you submit this form with its $30 filing fee, your desired name will be reserved for 180 days. This form must be sent through the mail to the following address:Secretary of State
Washington requires that every corporation have an agent selected to receive any service of process in the state. Your registered agent may be either an individual or a professional group that accepts legal documents on behalf of the corporation. A requirement for the registered agent is that the individual resides in Washington or the business entity be authorized to conduct business in the state. When you submit your articles of incorporation, you will have to list a physical address in Washington for your registered agents. Before you designate someone as a registered agent, make sure they agree to the responsibilities, including accepting service of process on your corporation’s behalf before filing the articles of incorporation.
The articles of incorporation are a foundational document when forming your corporation. Once you submit this document to the Washington Secretary of State, your corporation is legally formed. You must include the following information when submitting this document:
Washington’s secretary of state allows you to submit these articles online or via mail. The filing fee is $180 for mail filings and $200 for online filings.
The corporate bylaws are not filed with the state, and it is not legally required for you to have them. Nevertheless, your corporation is strongly encouraged to create a set of bylaws. These bylaws set the basic rules for running your corporation. The advantages of having these corporate bylaws are twofold:
Make sure you keep your bylaws, articles of incorporation, certificates, and minutes of shareholder and director meetings on file.
The person who signed and submitted the articles of incorporation, also known as the incorporator, appoints the directors who will serve on the board until the first annual meeting for the shareholders. The next annual meeting is where shareholders will elect board members. The incorporator completes the Incorporator Statement that lists the initial directors’ names and addresses. This statement is not filed with the state but is kept on file in the corporate records.
During the first board meeting, you will adopt bylaws, directors will appoint officers, select a bank, set the fiscal year, send out shares of stocks, and adopt an official certificate form and corporate seal.
It is essential to record the board meeting in corporate minutes.
Washington’s secretary of state requires any corporation performing business in the state to file an initial report within 120 days of its formation. After that, an annual report is filed with the Secretary of State. The Secretary of State sends renewal notices to your listed registered agent 45 days before the following annual report is due. This filing can be done either online or through paper form. The online option may be found on the Washington Secretary of State website. The fee for the initial report is $10, and for subsequent annual reports, $60.
You must also obtain a federal Employer Identification Number (EIN). The IRS issues this number to the corporation, and you can obtain one by completing the online application. There are no fees to obtain an EIN.
Forming a corporation in Washington State involves several essential steps. These processes are crucial for establishing your corporation's legal foundation. When forming your company, consider embracing the efficiency and expertise that Bench brings to the table. This allows you to navigate the complexities of financial management with confidence, enabling you to focus on realizing your business aspirations.
If you have questions about structuring your Washington corporation, our experienced paralegals are here to assist you. Feel free to contact us through our contact form or call +1 (307) 683-0983 for guidance throughout the process.