So you have reviewed the pros and cons of several business structures and decided to form a Corporation. Now what? Here’s a step-by-step guide to form your Corporation. It is highly advisable that you consult a business law attorney when forming your Corporation to ensure that you follow all the steps properly.
You first need to choose a name for your business. After you have decided on potential candidates, search the business name registry at the Washington Secretary of State’s website. If your business name does not come up, then you are free to register it in Washington. If it does, you will need to think of a new name.
You will also want to do conduct an adequate search to make sure that no other company outside of Washington is using your name. This is because you do not want to use a name that is already established (let’s say Microsoft or Nike) because you will likely be infringing on their tradenames and trademarks. You can conduct this search by searching for your business name in Google or other search engines.
You will now need to complete the Articles of Incorporation and file them with the Secretary of State along with the $180.00 filing fee. Other than your basic corporate information (name of corporation, number and class of shares, officers, etc.) You will need to have a registered agent with a Washington address (no P.O. boxes). This can be your personal or business address if you live in Washington and if you do not live in Washington you can have someone, such as your attorney, serve as your registered agent as long as he or she lives in Washington.
If you are plan on doing business in other states, you will need to register in those other states as well.
Draft and execute your corporate documents. The first document you will want to draft our your Bylaws. These will include how your company runs its day to day operations and will plan out the life of your company. The Bylaws typically include: how to appoint directors and officers, when and where annual meetings occur, how profits and dividends are dispursed, the class and par value of shares as well as restrictions on the transfer of shares, how to dissolve the corporation, etc. You can find a form for Bylaws online but it is essential that you understand and protect all your rights so it is advisible that you consult a business law attorney when drafting your Bylaws.
You will also need to establish your corporate minute book and stock ledger. I recommend ordering these materials online from Blumberg Law Products. They have several corporate kits that include stock certificates, transfer sheets, corporate minutes, etc.
Next you will need to set up the corporation’s bank account. You can contact a representative from just about any bank and they can walk you through the process. It is best practices to conduct all business transactions through the corporation’s business account to make sure you have no bookkeeping issues down the road.
If your corporation will have employees, you will need to apply for a Employer ID Number with the IRS.This number will allow your corporation to file its employment and business taxes.
If you wish for your corporation to be an “S” Corporation you must elect to be taxed as one by completing IRS Form 2553. If you do not complete this form, you will have formed a “C” Corporation and be taxed as such. Keep in mind the distinction between an “S” and “C” corporation is only made by the IRS for tax purposes, the distinction is not made at the State level. If you need more information on the differences between an “S” Corporation and a “C” Corporation, you can read more about it here.
Obtain all county and city business licenses. Depending on which County and City your corporation is operating out of, you will need to obtain several licenses. You can call your city or county directly for more information.
Get to work!
Legal Disclaimer: The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. I am licensed only in Washington and Oregon.