Benefits of a corporation
Because it is a separate legal entity from its owners, a corporation is responsible for its own actions and financial obligations. If a corporation is sued or encounters financial troubles, the corporation’s assets may be used to pay debts and judgments, but the personal assets of the corporation’s owners/shareholders are generally not at risk. Additional benefits of a corporation include potential lower tax rates, more deductions, and the ability to easily transfer shares between owners.
Requirements for incorporating in Washington
Preparing your articles of incorporation
Your corporation’s existence begins when you file articles of incorporation with the Washington Secretary of State, as well as pay a filing fee. At a minimum, the articles of incorporation must contain the following information:
- Name of the corporation
- Stock structure
- Names and addresses of incorporators
- Number of directors, unless specified in the bylaws
- Registered agent’s name, address, and consent
When providing the details of your corporation’s stock structure, the articles of incorporation must include the classes of shares and the number of shares authorized in each class. If there is more than one class of shares, the articles must include a distinguishing designation for each class. Before shares in any class can be issued, the articles must describe the limitations, preferences, voting powers or relative rights of the shares in that class.
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Naming your corporation
Your corporation’s name must meet certain requirements, and it must be available for use in the state of Washington. You can conduct a name availability search on the Secretary of State’s website.
You can reserve a name for 180 days by submitting a name reservation form to the Secretary of State.
When choosing a name for your corporation, you must meet the following requirements:
- A corporation’s name must contain the word “corporation,” “incorporated,” “company” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.”
- The name must be distinguishable from any other business name registered or reserved in the records of the Secretary of State.
An incorporator’s primary responsibility is to sign the articles of incorporation and submit them to the Secretary of State for filing. When specifying incorporators, you must meet the following requirements:
- Incorporators’ names and addresses must be listed in the articles of incorporation.
- Your corporation may have one or more incorporators.
- An incorporator may be a person or an entity.
- If the articles of incorporation do not list the names of the initial directors, the incorporators must elect directors. They may also approve bylaws. After that, the incorporators have no further role.
Your corporation’s directors will develop and implement policies, strategies, and long-range goals for the corporation. Directors generally focus on “big picture” issues and leave the day-to-day operation of the company to the officers.
Your corporation must meet the following requirements when specifying directors:
- Your corporation must either have at least one director, or it may dispense with a board of directors, provided the articles of incorporation, or a shareholders’ agreement specifies who will perform the duties of the board of directors.
- The state of Washington does not set a maximum number of directors. The articles of incorporation or bylaws must include the number of directors or specify the process for fixing the number of directors.
- The articles of incorporation or bylaws may describe who is eligible to serve as a director.
Specifying a registered agent
Every corporation must have a registered agent to receive service of process, including lawsuits and other official communications. The agent accepts these documents on the corporation’s behalf and forwards them to the corporation.
When specifying your corporation’s registered agent, you must meet the following requirements:
- The articles of incorporation must list the registered agent’s name and street address in the state of Washington. The agent must print his or her name and sign a consent to act as agent.
- A registered agent may be an individual who resides in the state of Washington or a business entity that has registered with the Secretary of State. The agent must have a physical address in the state of Washington where documents can be personally delivered.
Stating a corporate purpose
Your corporation’s purpose does not need to be included in the articles of incorporation, but you can provide one if you want to. Unless the articles provide otherwise, the purpose of every Washington corporation is to engage in any lawful business.
Determining incorporation bylaws
A corporation’s bylaws supplement its articles of incorporation by providing more detailed descriptions of the way the corporation will operate and the rights, powers, and limitations of its directors, officers, and shareholders. Bylaws are not filed with the Secretary of State.
The following requirements apply when determining corporation bylaws:
- The incorporators or directors must adopt bylaws.
- If the number of directors is not stated in the articles of incorporation, the bylaws must either state the number of directors or describe how the number will be determined.
- Bylaws cannot include anything that infringes upon or limits the directors’ exclusive authority or that conflicts with the law, the articles of incorporation, or a shareholders’ agreement.
Costs of incorporating in Washington
The Washington Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay federal income taxes. While the state of Washington does not have a corporate income tax, it does have a business and operations tax.
LegalZoom can help you start a corporation in Washington. LegalZoom offers online business filing services, including finding a registered agent in Washington.
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