Here is an outline of the steps you need to follow in order to form a corporation (specifically, a "C corporation") in Washington. You should also read the general section on forming a corporation for information that is applicable in any state. Additionally, you should familiarize yourself with the Washington Secretary of State's website and the Department of Licensing website, which have useful information and resources.

1. Choose a business name for the corporation and check for availability.

• Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.

• Washington law requires that a corporation name contain the word "corporation," "incorporated," "company," or "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd." Additionally, your corporation name must be distinguishable from other names on file with the Secretary of State (limited exceptions apply), and may 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 the state.

• Consult Access Washington for information on how to check the availability of your desired business name in Washington.

• Although you are not required to do so, consider registering your business name as a federal and/or state trademark.

2. Recruit and/or appoint a director or directors for the corporation.

• Under Washington law, a corporation must have at least one director.

• A director need not be a resident of Washington or a shareholder of the corporation, unless the articles of incorporation or bylaws require these qualifications.

• Washington does not set a minimum age requirement for directors.

• Either the articles of incorporation or the corporation's bylaws should set the number of directors that will make up the corporation's board of directors.

3. Prepare and file articles of incorporation with the Secretary of State.

• The filing fee is $180. The Secretary of State's website has a simple, fill-in-the-blank form for the articles of incorporation. If you would like to file online, you can do so using the Secretary of State's Online Application Forms page. There is a $50 expedited processing fee and a $20 fee for online filing. For general information on corporate articles of incorporation, please see the Articles of Incorporation page.

4. Create the corporation's bylaws.

• There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the Secretary of State, but the corporation should keep a copy at its principal place a business. For general information on corporate bylaws, please see the Corporate Bylaws page.

5. Hold an organizational meeting.

• See the general section on forming a corporation for details. You can find the Washington statute relating to the organizational meeting at Wash. Rev. Code § 23B.02.050.

6. Issue stock certificates to the initial owners of the corporation.

• See the general section on forming a corporation for details. The Washington statutes relating to issuance of stock certificates are located in Wash. Rev. Code § 23B.06.250 and Wash. Rev. Code § 23B.06.260. Unless the articles of incorporation state otherwise, the board of directors has the authority to set the "consideration" (i.e., the amount to be received in cash, property, or services) for each share of stock.

7. File a Business License Application with the Washington Department of Licensing.

• Washington uses a single form for many of the steps needed to start a business. This form is called the Business License Application.

• Before filing out the Business License Application, get the Business Licensing Guide so that you will fill out the application correctly.

• You can file the Business License Application by printing out the form and mailing it, applying online, or by visiting a business licensing office in person. The filing fee is $20, which is a processing fee of $15, plus $5 to register a trade name. If you filed formation papers with the Secretary of State, write the Unified Business Identifier (UBI) number that was given to you on your Business License Application.

• When you file the Business License Application, you will receive a state business license and a Unified Business Identifier (UBI) number (if you did not already receive one from the Secretary of State's office).

• The Business License Application lets you register a "trade name" for your business, which you need to do if you want to operate your business under a name other than that listed in the certificate of formation.

• The Business License Application also lets you create a state employment account, which you need to do if you will have an employee or employees in Washington. You should not set up an employment account unless you plan to employ someone in the next 90 days.

• Check your local county or city clerk's office for any additional licensing requirements.

8. File an Initial Annual Report with the Secretary of State.

• You need to file an Initial Annual Report within 120 days of filing the articles of incorporation. The filing fee is $10. If you file the articles of incorporation by mail, you will receive the Initial Annual Report form by mail from the state. If you file the articles online, you file the Initial Annual Report through the Online Application Forms page.

9. Determine what tax and other regulatory obligations the corporation has, and take care of any necessary registrations.

• Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.

• If you have an employee or employees in Washington, you need to set up a state employment account using the Business License Application (discussed above).

• Whenever you hire an employee in Washington, you must inform both the IRS and the State of Washington. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information about reporting new hires at the Washington New Hire Reporting website.

• If you have an employee or employees in Washington, you need to carry workers' compensation insurance. The Washington State Department of Labor & Industry administers the program. Its website has a useful Intro to L&I's Workers' Comp Insurance page.

• As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.

• Washington corporations must complete the state excise tax return, generally on a monthly or quarterly basis, and pay the business and occupation (B&O) tax. B&O taxes are assessed on gross revenue, regardless of whether the company makes a profit. Generally, if a business has gross revenue of less than $7,000 in a quarter, it will not have to pay B&O taxes that quarter, but it must still complete the excise tax return. The B&O tax rate is determined by type of business activity, with rates between 0.1 percent and 2.0 percent of gross revenue (most services are 1.5%). For more information, contact the Washington Department of Revenue at 1-800-647-7706.

10. Open a bank account for your business.

• It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN), a copy of the articles of incorporation, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.

• Washington corporations must file an annual report and license renewal with the Washington Department of Licensing every year after formation. The filing fee is $69, and you can file the report and renewal online.

• Washington requires certain documents to be kept at a corporation's principal place of business. The required documents are described in Wash. Rev. Code § 23B.16.010 and Wash. Rev. Code § 23B.16.020.

• Wash. Rev. Code § 23B.16.200 requires Washington corporations to make certain annual financial statements available to shareholders within four months of the end of the corporation's fiscal year or before the annual shareholders meeting (whichever is sooner). It also requires the corporation to furnish other financial statements upon request by a shareholder.

• 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. Certain requirements and additional obligations apply -- please see the S Corporation page for details.

• To form an S corporation, designate "S" status with IRS via Form 2553 within 2 months and 15 days of filing your articles of incorporation with Washington. There is no additional paperwork that you must file with Washington to obtain "S" status.

• S corporations are subject to the B&O tax (discussed above).