How to register a corporation in Washington?
Entrepreneurs and first-time business owners prefer to register businesses as corporations in Washington because this type of entity structure can be highly beneficial. Corporations in Washington have many benefits and advantages over other business entity types. The state has the largest concentration of STEM (science, technology, engineering, and math) workforce. This article has been created to provide you with guidance regarding the steps towards incorporation. This guide will provide an insight into the benefits of incorporating in Washington and the various processes involved like obtaining an EIN, creating business plans, local licenses and permits, and taxes among others.
Corporations in Washington
Entrepreneurs prefer to start corporations in Washington due to the superior business climate. The state exhibits a flourishing economy that provides a variety of business incentives and tax credits. Washington is home to several Fortune 500 companies as well as many small businesses. One of the benefits of incorporating a business in Washington is the convenience of their strong transportation and logistics infrastructure including ports, Foreign Trade Zones (FTZ), and Opportunity Zones.
What is a Washington Corporation?
Corporations are commonly referred to as C-Corporations. A C-Corporation is a legal structure where the shareholders and owners are taxed separately. It is a popular business structure in Washington, and across the U.S. C corporations are considered to be publicly traded companies that are owned by shareholders or those who have shares or stakes in the aforementioned company. There are various types of Corporations that you can form, from profit to not-for-profit entities. You can incorporate your business in Washington under the following:
- Domestic Corporations
- Foreign Corporations
- Nonprofit Corporations
- Employee cooperative corporations
- S Corporation
- Corporations sole
- Social Purpose Corporation (SPC)
What are the benefits of incorporating in Washington?
There are several advantages that entrepreneurs and startups find useful when they register a Corporation in Washington. A C Corporation is different from an LLC or any other entity in terms of its legal structure. A C-Corp has distinct advantages. Some of the benefits of incorporating in Washington are:
- Limited liability for owners – One of the major highlights of a corporation that you as an owner will benefit from, is limited liability protection. This particular entity is considered to be a separate legal entity; the liabilities, debts, and other obligations, will remain separate from the owner. The owner will not be personally responsible for any business debts or liabilities.
- Perpetual existence – Perpetual existence is another of many great incentives for incorporating in Washington. The business corporation exists separately from its shareholders or owners.
- Transfer of ownership – Another favorable privilege when you incorporate in Washington, is ownership transferability. You will be able to transfer the ownership of the company by selling a share of the corporate stock.
Starting a Corporation in Washington
Washington is a great destination for startups and small businesses. It has just the right business climate to support your ideas and business. The state does not require you to file personal income tax returns and offers several tax incentive programs to help reduce your overall tax burden. So, how do you register a Corporation in Washington? Let us look at the various processes involved.
1. Name your Washington Corporation
Whether you want to start a corporation in Washington online or offline; the first step involves choosing a name and reserving it. A business name is the key identifier for every company and helps in distinguishing it from other entities. The name of a corporation is used for several purposes from incorporation, to sales, marketing, and branding activities. There are certain naming guidelines you will be required to follow governed by WA Rev Code § 23B.04.010 (2012). The guidelines also require the name to contain identifier words like “corporation”, “incorporated”, “company” or abbreviations like “corp.”, “inc.”, “co.” or “ltd”.
Once you have selected a unique name for your business, you will need to look up a corporation in Washington to confirm its availability. This process of determining your business identification is conducted through the business name availability search. If your chosen name is available then you can reserve it with the office of the Washington Secretary of State for 180 days. You will need to file the name reservation form along with a fee of $30 and mail it to the Secretary of State, Corporation Division.
2. Appoint a Washington registered agent
If you want to start a corporation in Washington then it is important to note that there is a specific process that you are required to follow. This process involves filing incorporation documents, name reservation, and maintaining compliance with all state laws. It may seem like a complex process and it will involve extensive documentation. A reputable Washington registered agent like IncParadise can assist you with the process of incorporation.
The state laws require you to designate and continuously maintain a registered agent according to WA Rev Code § 23B.05.010 (2012). IncParadise can not only help you register a Washington corporation online but can also be your chosen registered agent in the state. We have a deep knowledge of the state laws and provide meaningful assistance with the various processes involved in establishing an incorporation.
3. File Articles of Incorporation with Washington SOS
The foremost requirement to incorporate in Washington is to file the Articles of Incorporation for a Profit Corporation. You will be required to prepare and then submit the Articles of Incorporation pursuant to WA Rev Code § 23B.02.020 (2012). The Articles can be hand-delivered or mailed to the Office of the Secretary of State, Corporations & Charities Division. The filing fee is $180 and the expedited fee is an additional $50.
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4. Choose your Washington Corporation’s initial directors
A corporation is managed by a board of directors and officers, wherein the former is the governing body. You have to choose the initial directors before you register your Washington Corporation online. This is a mandatory requirement because they are the first directors and their names are submitted in the articles of incorporation. The initial directors are required to serve until the shareholders of the said company hold the first meeting for electing successors. According to WA Rev Code § 23B.08.030 (2012), a Washington corporation may have one or more directors.
5. Prepare bylaws for Washington Corporation
The initial board of directors or incorporators of a corporation in Washington will be required to adopt initial bylaws pursuant to WA Rev Code § 23B.02.060 (2012). You can adopt the bylaws before or after you start a corporation in Washington. The bylaws are the governing rules based on which a Washington corporation will operate. The bylaws constitute the following:
- Rules and obligations of directors, shareholders, and officers
- Annual meeting rules
- Guidelines for removal of directors and officers
- The purpose of the corporation
- Stock issuance rules
- Duties and responsibilities of owners and managers
- Voting rights
- Maximum and minimum number of directors allowed
- Specific rules for making amendments to existing bylaws
6. Get an EIN for your Washington Corporation
The Employer Identification Number (EIN) is a unique nine-digit number that is assigned to businesses by the Internal Revenue Service (IRS). Certain businesses may not need this number but if you incorporate in Washington then you will need an EIN. It is also known as the Federal Employer Identification Number (FEIN) and is required for the filing of business or corporate taxes in the state. You may also need an EIN for hiring employees, obtaining credit, and opening a business bank account.
7. Hold an organizational meeting
There are many benefits of incorporating in Washington but the most important objective is to operate the company properly. This is made possible by holding a corporate organizational meeting. Such a meeting highlights all the important tasks that need to be executed. The tasks will vary from one company to another but some of the key areas covered in this meeting include:
- Drafting articles of incorporation
- Election of officers
- Distribution of initial shares
- Adopting corporate bylaws
- Election of officers
- Accepting resolutions necessary for the operation of the company
- Voting for adopting the corporate seal
8. Open a bank account
Whether you start a brick and mortar store or an online business, having a business bank account really helps. When you start a corporation in Washington there may be several financial transactions in terms of making payments or expenses and receiving payments or revenue. Having a business bank account will help simplify these finances, ensure clean bookkeeping, and further assist with tax preparation and easy tax filing. A business banking account will also help in building your credit and creating a good credit history, which can be useful when applying for a loan.
9. File your annual report
Once you register your Washington Corporation online, you will be required to maintain annual state compliances. This helps the business to enjoy a good standing in the state. Another of the many vital requirements for your Washington business is filing your annual report. This report has to be submitted to the office of the Washington Secretary of State – Corporations Division according to WA Rev Code § 23B.16.220 (2012). The annual report has to be filed each year by the end of the incorporation anniversary month.
Example: If you filed the Articles of Incorporation on July 23, 2022, then your annual report will be due on July 31, 2023. The fee for filing this report is $60 and there can be penalties for not filing or filing late.
Know more about starting a Washington Corporation
There are several procedures involved in setting up a new business. If you are planning to start a corporation in Washington then you may have queries concerning the steps to incorporation. For that reason, we have created a special section of “Frequently Asked Questions” for addressing such queries.
Why is Washington a great place to start a Corporation?
Washington has a growth-oriented economy that supports several industries driven by small businesses and large corporations. There are several benefits to incorporating in Washington that a first-time business owner can enjoy including its pro-business climate. Some of the salient highlights of the state are:
- It is a high-growth region for advanced manufacturing, clean technology, aerospace cluster, and cloud-based data centers
- The state offers one of the lowest energy costs to businesses
- Access to industry-specific tax incentive that encourage growth and innovation
- A robust transportation and logistics system to facilitate the movement of goods
- There are many opportunities for growth and expansion including opportunity zones, grant programs, and workforce training among others.
How much does it cost to incorporate in Washington?
You can form different types of businesses in Washington. The process, documentation, and fee may be different for each of them. If you plan to incorporate in Washington then you will be required to submit Articles of Incorporation. The initial cost to incorporate is $180. If you want to expedite the process then the total fee along with a business registration fee would be $230. Apart from this initial cost, there will be costs for your business licenses, name reservation, and annual report among others.
What are the annual costs associated with a Washington Corporation?
If you look up a corporation in Washington for annual requirements, the most significant is the annual report. You will also be required to file taxes annually and renew your business licenses and permits. It is important to note that the fee for county licenses will vary according to license type and county.
Are there any disadvantages in forming a Corporation in Washington?
There are many benefits when incorporating your business in Washington. A traditional corporation may have advantages as well as disadvantages. A corporation is one of the most preferred entity structures but it can have potential downsides. The biggest drawback is double taxation, which means that both the business and the shareholder will have to file taxes. Corporations also have rigid structures, formalities, lengthy application processes, and are expensive to operate.
Who can be a registered agent for your Washington Corporation?
If you intend to register Corporation in Washington then you will have to appoint a Washington registered agent pursuant to WA Rev Code § 23B.05.010 (2012). An agent can be an individual or a business that will have the authority to receive any legal or business documents like annual reports on behalf of your corporation. The registered agent representing you like IncParadise will provide a service of process on behalf of your company. You can also change your registered agent by filing a statement of change with the secretary of state.
Do all Corporations need a business license in Washington?
Yes, whether you register your Washington corporation online or by any other form of business entity, you will need to apply for business licenses and permits to make the business operational. It is mandatory to apply for Business License Tax Certificates with the Department of Revenue, Business Licensing Service. You may need to apply for county licenses and professional licenses as well.
How to qualify for a Foreign Corporation in Washington?
If you already own a business in any state other than Washington and want to move or expand your business in this state then you will need to apply for foreign qualification. This is a process through which you will be able to incorporate in Washington as a foreign entity. You will be required to file a Foreign Registration Statement or Certificate of Authority with the Secretary of State pursuant to WA Rev Code § 23B.15.030 (2012).
How do I dissolve my Washington Corporation?
Once you start a corporation in Washington there can be several reasons for dissolving the company in the future. The dissolution can be carried out by the board of directors, shareholders, and incorporators. You will be required to file the Articles of Dissolution for a Washington Profit Corporation pursuant to WA Rev Code § 23B.14.030 (2012). You will also be required to publish a notice of the dissolution within thirty days.
Ready to Start a Corporation in Washington?
There are a variety of business structures that you can form in Washington, though entrepreneurs prefer to incorporate their businesses over other types of entities. If you are thinking of registering a domestic or foreign entity in the state then IncParadise can assist you with the process of incorporation.
IncParadise is one of the top registered agents in Washington and we have helped with more than 10,000 new business formations. We also offer a wide variety of additional services like foreign qualification and EIN assistance, among others.