The Washington Business Corporation Act, codified at Title 23B of the Revised Code of Washington, is the statute that governs every for-profit corporation formed in Washington. It sets the rules for creating a corporation, running one, protecting its directors and officers, holding shareholder votes, and dissolving the entity when its time is up. If you own, manage, or are thinking about forming a Washington corporation, RCW 23B is the law you answer to.
Who the Act Applies To
RCW 23B governs domestic for-profit corporations organized under Washington law.1Washington State Legislature. RCW 23B.01 – General Provisions If your entity issues shares and operates to earn a profit under a Washington filing, this is your statute. Nonprofits, LLCs, and partnerships each fall under separate titles in the RCW and are not covered here.
Corporations incorporated in another state but doing business in Washington are treated as foreign corporations and must deliver a foreign registration statement to the Secretary of State before transacting business in the state.2Washington State Legislature. Washington Code Title 23B Chapter 23B-15 Section 23B-15-030 Operating without registering can lock a foreign corporation out of Washington courts and trigger penalties. Registration requires a Washington registered agent, the same as domestic incorporation.
Forming a Washington Corporation
Incorporating starts with Articles of Incorporation. Under RCW 23B.02.020, the articles must include four elements:3Washington State Legislature. RCW 23B.02.020 – Articles of Incorporation
- A corporate name containing a designator such as Corporation, Incorporated, Company, or Limited, or an abbreviation like Corp. or Inc.
- The number of authorized shares. If you create more than one class, each class needs its own label and a description of voting rights, preferences, and limitations before shares of that class can be issued. At a minimum, the articles must authorize one class with full voting rights and one class entitled to the corporation’s remaining assets on dissolution.4Washington State Legislature. Chapter 23B.06 RCW – Shares and Distributions
- The name and Washington street address of the initial registered agent, who accepts legal papers and official notices on the corporation’s behalf.5Washington State Legislature. RCW 23B.05.010 – Registered Agent
- The name and address of each incorporator.
Optional items you can add include the corporation’s purpose, the names of initial directors, and a provision limiting director liability. Every incorporator must sign.
Bylaws
After the articles are filed, the incorporators or the board must adopt initial bylaws, usually at the first organizational meeting.6Washington State Legislature. RCW 23B.02.060 – Bylaws Bylaws are the internal operating manual: how meetings are called, how officers are appointed, how the bylaws themselves are amended. They are not filed with the state, but directors, officers, and shareholders are all bound by them. A bylaw cannot conflict with the articles or with Washington law.
Filing with the Secretary of State
The Articles of Incorporation go to the Corporations and Charities Division of the Secretary of State, online or by mail. The filing fee is set by the Secretary of State under RCW 23.95.260 and RCW 43.07.120, and the current schedule is on the Secretary of State’s website.7Washington State Legislature. RCW 23B.01.220 – Fees Expedited processing is available for an added fee.8Washington Secretary of State. Fee Schedule/Expedited Service Once the filing is approved, the corporation receives a certificate of incorporation and a Unified Business Identifier number used across state tax and licensing systems.
Staying in Good Standing
Every Washington corporation has to file an annual report with the Secretary of State to keep its active status. The report is not a financial statement. It confirms or updates the corporation’s registered agent, principal office address, and officer or director names. The filing fee for a profit corporation’s annual report is $70.8Washington Secretary of State. Fee Schedule/Expedited Service
Miss the deadline and the fee climbs to $95. Let the delinquency drag on and the Secretary of State can administratively dissolve the corporation.9Washington State Legislature. RCW 23B.14.200 – Administrative Dissolution That ends the corporation’s legal existence: no conducting business, no enforcing contracts, no defending lawsuits in the corporate name. Reinstatement costs $140 plus every missed annual report fee.8Washington Secretary of State. Fee Schedule/Expedited Service
Directors and Officers
A Washington corporation must have a board of one or more directors.10Washington State Legislature. RCW 23B.08 – Directors and Officers The exception: a corporation with fewer than 50 shareholders can dispense with a board entirely if the articles say so, in which case shareholders manage the corporation directly. Otherwise, the board holds final authority over business and affairs.
Under RCW 23B.08.300, directors must act in good faith, exercise the care a reasonably careful person in the same role would use, and act in a way they reasonably believe serves the corporation’s best interests.11Washington State Legislature. RCW 23B.08.300 – Standards of Conduct for Directors A director who signs off on a deal without reading the financials, or steers a contract to a relative without disclosure, can face personal liability for the resulting harm.
The board appoints officers, typically at least a president and a secretary, to run day-to-day operations. Officers are held to the same three-part standard: good faith, ordinary care, and loyalty to the corporation.12Washington State Legislature. Chapter 23B.08 RCW – Directors and Officers – Section: RCW 23B.08.420 An officer who meets those duties is protected from personal liability for business decisions that turn out badly. One person can hold multiple officer positions, which is common in small corporations.
Limiting Director Liability
The articles of incorporation can include a provision that eliminates or limits a director’s personal liability for monetary damages. Most corporate attorneys include one as a matter of course. The protection has firm limits, though. It cannot cover intentional misconduct, knowing violations of law, improper personal benefits, or violations of RCW 23B.08.310, which governs unlawful distributions to shareholders.13Washington State Bar Association. Title 23B RCW Washington Business Corporation Act – Section: RCW 23B.08.320
Indemnification
Separately, a corporation may indemnify its directors, meaning the corporation covers legal costs and any judgment or settlement tied to their corporate role. Indemnification is allowed when the director acted in good faith, reasonably believed the conduct served the corporation’s interests, and in criminal cases had no reason to believe the conduct was unlawful.14Washington State Legislature. RCW 23B.08.510 – Permissible Indemnification
Two situations bar indemnification: when a court finds the director liable to the corporation itself in a derivative suit, and when the director is found to have received an improper personal benefit. Where indemnification is permitted in a derivative suit, it covers only reasonable expenses, not the underlying judgment. Many corporations make indemnification mandatory in the bylaws or a separate agreement rather than leaving it to the board, and that certainty is often what convinces qualified people to serve.
Shareholder Meetings and Voting
Every corporation holds an annual meeting of shareholders to elect directors at a time set in the bylaws.15Washington State Legislature. RCW 23B.07.010 – Annual Meeting Special meetings handle matters that cannot wait. Notice of any meeting must reach shareholders no fewer than 10 and no more than 60 days before the meeting date and must state the time, date, and place. Bad notice can invalidate any vote taken.
A meeting needs a quorum to conduct business. The default is a majority of the shares entitled to vote on the matter, though the articles can set the bar higher.16Washington State Legislature. RCW 23B.07.250 – Quorum and Voting Requirements for Voting Groups Once a share is represented for any purpose other than objecting to the meeting itself, it counts toward the quorum for the rest of that meeting and any adjournment.
Shareholders who cannot attend in person can appoint a proxy. A proxy appointment is valid for up to 11 months if no term is stated, and is revocable unless the form says it is irrevocable and is coupled with a financial interest such as a pledge or share purchase agreement.17Washington State Legislature. Chapter 23B.07 RCW – Shareholders – Section: RCW 23B.07.220 When multiple classes of shares exist, each class can vote as a separate voting group on matters that specifically affect its rights.
Dissolving the Corporation
Voluntary dissolution runs under RCW 23B.14. The board proposes dissolution and puts it to the shareholders for a vote.18Washington State Legislature. Chapter 23B.14 RCW – Dissolution – Section: RCW 23B.14.020 The threshold depends on formation date. For corporations formed before August 1, 2024, dissolution needs approval by two-thirds of the votes entitled to be cast. For corporations formed on or after that date, a simple majority is enough.
After shareholder approval, the corporation obtains a revenue clearance certificate from the Washington Department of Revenue under RCW 82.32.260, confirming state tax obligations are settled. It then files Articles of Dissolution with the Secretary of State, stating the corporation’s name, the date dissolution was approved, and confirmation that the vote was properly conducted.19Washington State Legislature. RCW 23B.14.030 – Articles of Dissolution
Then comes winding up. The corporation stops taking new business and settles what it owes. Creditors are paid before shareholders. Secured creditors with a lien on corporate assets come first, then unsecured creditors including employees owed wages and taxing authorities, then preferred shareholders, and finally common shareholders. Only after every creditor is paid do shareholders receive a distribution. A corporation that skips or shortcuts this order exposes its directors to personal liability for unpaid claims.
A corporation that was administratively dissolved instead of voluntarily wound down can apply for reinstatement with the Secretary of State under the procedures in RCW 23.95.615.20Washington State Legislature. RCW 23B.14.220 – Reinstatement Following Administrative Dissolution Reinstatement means catching up on every missed annual report and paying the reinstatement fee plus accumulated charges.