How to Form a Corporation
in Washington

The Corporate form of business has the benefit of limited liability and has certain rights, privileges, and liabilities beyond those of an individual.  Doing business as a corporation may yield tax or financial benefits.  Corporations may be formed for a profit or nonprofit purpose.  Forming and operating a corporation requires certain record-keeping requirements and observation of "corporate formalities."  In the case of a corporation classified under subchapter C of the Internal Revenue Code (a "C Corporation") there can also be potentially adverse tax consequences because the corporation is taxed on its income at the entity level and the shareholders are also taxed on any dividends that are distributed.

For more details on the steps necessary to form a corporation, please refer to the links below:






Your corporate name can play an important role in the marketing of your goods and services, so you should choose your business name carefully.

You could be sued if you use a business name that is too similar to the name or trademark of another business.  Below is a partial list of resources to help you search for a business name and to avoid names currently being used:

You may also check:
  • Published telephone directories as well as your local phone books
  • Registered domain names at
Corporate Name Requirements

The State of Washington has a number of requirements for the name of your corporation:

  • A corporate name MUST contain the word "corporation," "incorporated," "company," or "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd."
  • A corporate name MUST NOT contain any of the following words or phrases: "bank," "banking," "banker," "trust," "cooperative," or any combination of the words "industrial" and "loan," or any combination of any two or more of the words "building," "savings," "loan," "home," "association," and "society," or any other words or phrases prohibited by any statute of Washington
  • A corporate name MUST be distinguishable from the name of any other corporation operating in the state
  • The full list of requirements and applicable statute can be found at RCW 23B.04.010

If you choose to do business under a name different from your registered corporate name, by using a “trade name”, you must register any trade names by filing a Master Business Application.  You should utilize the resources above to check if the trade name is already in use.Although you are not required to do so, you may want to consider registering your business name as a federal and/or state trademark



Under Washington law, a corporation must have at least one director.  A director does not need to be a resident of Washington or a shareholder of the corporation, unless the articles of incorporation or bylaws require these qualifications.  Either the articles of incorporation or the corporation's bylaws should set the number of directors.  Directors are initially appointed to the position, but are elected in subsequent years by shareholders.

The Board of Directors oversees the activities of the corporation.  The Board generally has authority to:

  • govern the organization by establishing broad policies and objectives;
  • approve certain corporate activities and transactions – including contracts and agreements, asset purchases and sales, and approval of new corporate policies;
  • select, appoint, support, and review the performance of corporate officers;
  • ensure the availability of adequate financial resources;
  • approve annual budgets; and
  • account to the stakeholders for the organization's performance.

The articles of incorporation function like the constitution for the corporation.  

As shown in RCW 23B.02.020, the articles of incorporation must set forth:

  • a corporate name for the corporation;
  • the number and class of shares the corporation is authorized to issue;
  • the effective date of incorporation;
  • the tenure of the corporation;
  • the street address of the corporation's initial registered office and the name of its initial registered agent at that office; and
  • the name and address of each incorporator.

The articles of incorporation must be filed with the Secretary of State along with the applicable filing fees.  Unless a delayed effective date is specified, corporate existence begins when its certificate of formation is filed by the Secretary of State.  A delayed effective date for a certificate of formation may be no later than 90 days after the date it is filed.

An EIN is required for any business that hires employees or operates as a corporation.  Thus, an EIN is required for S Corporations.  You can get additional information on Federal Employee Identification Numbers from the following IRS publication: Understanding Your EIN.

Corporate bylaws set forth the operating procedures of the corporation and generally include the number of directors and corporate officers, the procedure for electing and removing directors, the procedures for director and shareholder meetings, and the requirements for keeping corporate records.  If you do not spell out certain provisions in your bylaws, the State has a set of default provisions in the Revised Code of Washington which will apply (as noted in RCW 23B.02.060).

The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

The articles of incorporation or bylaws must either specify the number of directors or specify the process by which the number of directors will be fixed, unless the articles of incorporation dispense with a board of directors.

Corporations are required to write and keep a record of their bylaws, but do not need to file them with the secretary of state.  Bylaws may be changed without officially filing amendments.

A shareholder buyout agreement is an agreement between co-owners of the corporation that sets forth the requirements for selling shares of stock if any of the owners leaves the corporation for any reason, including retirement or death.  The agreement also provides for a method of valuing the stock in the event of a buyout.  Furthermore, the shareholders can include terms in the agreement addressing other rights and duties of the shareholders.

A shareholder agreement is not required, but is suggested as a way to protect shareholders when a change in ownership of the corporation occurs.

A buyout agreement usually controls what events will lead to a buyout, whether a shareholder must be bought out by the other shareholders, who may purchase a departing shareholder’s shares, and what price must be paid for the shares.

An S corporation has the same basic organizational structure as a regular corporation, but some of the tax advantages of a partnership or LLC.  An S corporation pays no federal income tax, except for tax on certain capital gains and passive income.  Instead, the corporation's profits and losses "pass through" to shareholders, and profits are taxed at individual rates on each shareholder's Form 1040 (S corporations still pay Washington State Business and Occupation Taxes like all other businesses).

To elect S corporation status, the corporation must meet the following requirements:

  • Must be a domestic corporation;
  • Has no more than 100 shareholders (a husband and wife (and their estates) can be treated as one shareholder, as can all members of a family (and their estates);
  • Each shareholder must be an individual U.S. citizen or U.S. resident or estate (some trusts are also allowed as shareholders);
  • Has no nonresident alien shareholders;
  • Has only one class of stock;
  • Is not an ineligible corporation, i.e., certain financial institutions, insurance companies, or domestic international sales corporations.

Refer to Internal Revenue Code § 1361(b) for complete eligibility.

To elect S corporation status a corporation must meet all of the requirements of an S corporation and must submit IRS Form 2553.

The election must be made within two and one-half months of incorporation to be effective immediately.  All shareholders must sign Form 2553.

Following incorporation, the first step to be taken is to hold an Organizational Meeting to elect directors (if not named in the articles of incorporation) and complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting.

The corporation will then need to complete an Initial Report and thereafter Annual Reports.  The Initial Report is due within 120 days following incorporation and Annual Reports are due annually thereafter.

Additionally, a corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all corporate actions approved by the shareholders or board of directors by executed consent without a meeting, and a record of all corporate actions approved by a committee of the board of directors exercising the authority of the board of directors on behalf of the corporation.  A corporation shall also maintain appropriate accounting records, a record of its shareholders, and copies of the following records at its principal office:

  • articles or restated articles of incorporation and all amendments to them;
  • bylaws or restated bylaws and all amendments to them;
  • minutes of all shareholders' meetings, and records of all corporate actions approved by shareholders without a meeting, for the past three years;
  • financial statements described in RCW 23B.16.200(1), for the past three years;
  • all communications in the form of a record to shareholders generally within the past three years;
  • a list of the names and business addresses of its current directors and officers; and
  • the initial report or the most recent annual report delivered to the secretary of state.

Master Business Application

The Master Business Application is a simplified form used to apply for many state licenses, registrations, and permits, as well as some city licenses.

You must file a Master Business Application when you first start your business or when you change or update your business.  You will need to file (or re-file) if you want to:

  • Get a state business license or Unified Business Identifier (UBI) number;
  • Get a new city or specialty license;
  • Change ownership of a business;
  • Open or change business locations;
  • Register or change a trade name;
  • Hire employees (including minors and workers in the home); and
  • Change your unemployment or industrial insurance coverage.

You may file for a Master Business Application online, by mail, or in person at a business licensing office location.

Washington State Licenses

Depending on the type of business conducted, you may be required to have additional licenses.  The list of businesses can be found at State of Washington List of Licenses.

City and County Licenses and Permits

Many cities and counties in Washington also require business licenses.  Information can be found at the following locations:


Bookmark and Share

Home | About | Attorneys | Fees | | Resources & Links | Blog | Contact Us
Probate | Wills & Trusts | Prenuptial and Domestic Partnership Agreements | Small Business | Other Areas of Practice


Harborscape Professional Building
1524 Alaskan Way Suite 101
Seattle, Washington 98101
Telephone: 206.621.1600 Facsimile: 206.621.1085

Copyright © 2010 The Law Office of Gary E. Gill


Disclaimer | Copyright


Harborscape Professional Building
1524 Alaskan Way, Suite 101
Seattle, Washington 98101
Telephone: 206.621.1600


The text, graphics, arrangement and presentation of materials contained on this Web site are copyrighted by The Law Office of Gary E. Gill, P.S.  All rights reserved.  You may download and print materials from this Web site solely for the purpose of reading the materials and retaining them for reference purposes.  Any other use of the materials, including copying, distribution, retransmission or modification, without express prior written permission, is prohibited.


Your use of this Web site does not create an attorney-client relationship between you and The Law Office of Gary E. Gill, P.S. The materials set forth herein are provided for informational purposes only and do not constitute legal advice. Similarly, email messages sent to The Law Office of Gary E. Gill, P.S., or any of its employees do not create an attorney-client relationship.


The materials presented on this website are intended solely for informational purposes. Links to other websites are provided for the user’s convenience. They do not constitute endorsements of the linked websites. The information provided does not constitute the legal opinion or legal advice of the Law Office of Gary E. Gill.