How to form a Washington Corporation
5 Steps to Forming your WA Corporation
Forming a corporation in Washington state can be an adventure or a chore, depending on how much you like government paperwork. Not your thing? Hire Washington Registered Agent LLC to do it right—for only $365. Or maybe you’re excited to dig in and get it done yourself. You can use the following steps as your guide.
- Gather Information for Your Articles of Incorporation
Before you fill out your Articles of Incorporation, it’s helpful to have a few key decisions made. You’ll need to include:
- Your exact company name. Make sure it’s different from other WA state business names by doing a Corporations Search, and include a corporate ending (Corp., Inc., Ltd., Co., etc.).
- The number and class, or type, of your shares. List at least 1 share and choose common or preferred.
- The effective date. If you don’t want your WA corporation to be formed right away, choose a date up to 90 days in the future.
- Your incorporator name, and address and signature. An incorporator is the person forming your company and signing the Articles of Incorporation.
- The Tenure. Decide if your Washington corporation will be perpetual (most common), or come to an end at a specific date or number of years.
- The name and address of your registered agent. A registered agent is an individual or company with a Washington physical address that can receive service of process.
- Get Your Registered Agent’s Consent The registered agent you choose must sign your Articles of Incorporation, giving their consent. If “registered agent” is a new term for you, never fear—it’s what we do. A registered agent is basically the official point of contact between your Washington corporation and the Secretary of State. The state wants a person and a physical office on record that will be available to receive any official notices and legal service of process, in the event of a lawsuit. A registered agent worth their salt will not only be available during business hours to receive your official mail, but will also get it to you in a timely manner and keep you updated on ongoing requirements. If you hire us as your Washington registered agent, you’ll also get all the documents you need in your online account.
- Submit Articles of Incorporation To officially form your corporation in WA state, you submit the Articles of Incorporation to the Office of the Secretary of State Corporations & Charities Division. While it’s straightforward to download the PDF, filing online is even simpler, and the office will process it much faster. Washington Corporations cost $180 to file with the state. If you choose expediting by mail, it’s $50, and filing online costs an extra $20.
- Wait for Processing and UBI Number It will take about 2 months for the state to process your Articles of Incorporation unless you pay the $50 expedite fee or file online. When we file incorporations, we always like to go with expediting or online filing—and it’s usually processed in 2-3 days.To make sure your business formation process goes smoothly, wait for your UBI number before you apply for your business license. You’ll receive an email with your UBI number from the WA Secretary of State as soon as your filing is processed. If you try to do the business license application without a UBI number, you run the risk of getting assigned a different number from each agency, which can cause hassles down the line.
- Apply for Business License(s) In Washington, incorporation is just the first step. If you’re going to actually run and operate a business in Washington, just forming a Washington corporation at the Washington SOS won’t really get you going. Our state has a Master business license, and if you plan on doing any business in Washington, you’ll have to have it. We get calls almost every day from people that signed up online on some big fancy incorporation website, and got Articles of Incorporation back from them, but they don’t have a clue of what they are supposed to do next.You can file the master business license application yourself, but when you sign up for Washington incorporation with us, there’s an option to have us do it for you for $125. If you’re looking for a full and complete package, we would recommend Washington incorporation, expedited service, Tax ID, S corp, and WA Master Business License for a total of: $590. Depending on your business, you may also need to apply for specific licenses as well.
Keeping your Corporation Current
One of the main reasons Washington requires the Master Business License is to be able to collect taxes. (They want to make you feel good, so they just call it a Master business License, but it’s actually not a license at all, it’s just a business registration.) Washington has a gross receipts tax known as the B & O tax, as well as sales and use tax, and property tax.
B & O Tax rates:
|Service and anything that doesn’t fall into another main category:||.015|
So basically most people fall into the service & other category, with a 1.5% percent tax on gross receipts. There are basically no deductions, except one of the coolest Washington Laws out there:
Small businesses in the service category are exempt from the B & O tax for the first $56,000 of gross income, and then it slides out to the regular rate until about $112,000.
After the first $112,000 of revenue, you’ll be at the full 1.5%. (Your figures will be different in another B & O category.) I think it’s really cool that new Washington corporations are basically tax-free on the state level for their first $56,000 of revenue because there’s no personal income tax in Washington. Progressive thinking like this is something we should all be proud of in Washington State.
For new corporations, an initial report is due within the first four months of incorporating (120 days). After than, Washington corporations will have to file an annual report each year on the last day of the anniversary month you file in. As a Washington Registered Agent client of ours, you get reminders from us to file this, and in your online account, we track this for you. You can file them online in about 5 minutes, and it will cost a $69 state filing fee.
We get the report for you and upload it to your online account immediately, so you can use the PIN to file your report. There’s a $25 late fee from the state if you don’t file it on time, and eventually they will administratively dissolve your Washington corporation.
Washington Incorporation Service Overview
When it comes to helping get your company off the ground we have you covered. When we form Washington corporations, we include:
- Articles of Incorporation for Washington corporations. We can customize these drafted articles with any additional specifics you might need.
- Washington corporation bylaws, written specifically by our Washington licensed attorney to protect you to the fullest extent allowed under RCW 23B.
- Initial resolution appointing officers and directors by the incorporator.
- Initial report (We haven’t seen another online incorporation website that does this, or frankly even knows that there is one).
- Washington State filing fees.
- 1 year of our $65 Washington Registered Agent service.
- Online account for all your documents.
- Track and remind you of your annual report notice. If you would like, we also have an option where we file this every year for you.
- We’ll have your Washington corporation formed sometimes the same day if the state isn’t busy. There’s no weird expedited or bronze or platinum or gold packages with us.
Washington Corporations Vs Washington LLCs
The corporation is arguably the most recognizable business entity in the world, and with it comes a sense of prestige. The owners of corporations are known as shareholders and their share of ownership is divvied into shares of stock. How many shares of stock someone owns in a corporation is really just how much of the corporation they own. When you incorporate in Washington, you’ll also be required to hold annual meetings for the corporation and keep up with other formalities to maintain the corporation.
The reason LLCs have become more popular in recent years because they offer most of the same advantages and benefits of operating as a corporation, without any of the formalities. If you form an LLC in Washington, you’ll not be required to have annual meetings or form resolutions. The ownership (called membership) of the LLC will be split into percentages. In general, LLCs are much simpler to operate and require less maintenance, though, both entities are required to file annual renewals with the Washington Secretary of State each year.
Washington Corporation law
Washington corporations are governed by the Washington Business Corporation Act Title 23B RCW. Some important information on Washington Corporations:
- RCW 23B.08.300 Directors of a Washington corporation must act in the best interests of the Washington corporation.
- RCW 23B.08.320 Directors of a Washington corporation have limited or eliminated liability for their actions unless they intentionally violate law(s) and conduct themselves in a manner that is not for the best interest of the Washington corporation.
- RCW 23B.08.400 Officers must carry out their duties as prescribed in the Washington Corporate bylaws and must not intentionally conduct themselves in a manner that would cause harm to the Washington corporation.
- RCW 23B.08.520 Officers are automatically indemnified unless the articles of incorporation specifically state that they are not, or if they have intentionally caused harm to the corporation.
- RCW 23B.07.010 The failure to hold an annual meeting of the shareholders, does not affect the validity of the Washington corporation.