RCW 24.03A: Washington Nonprofit Corporation Act Formation and Duties

The Washington Nonprofit Corporation Act, codified at RCW 24.03A, is the state law that governs how nonprofit corporations form, operate, and wind down in Washington. It took effect on January 1, 2022, replacing the former Chapter 24.03 RCW and delivering the first comprehensive update to the state’s nonprofit statutes in roughly 50 years. If you run, serve on the board of, or are starting a Washington nonprofit, this chapter sets the rules you work under.

Who the Act Covers

RCW 24.03A applies to every domestic nonprofit corporation that existed on January 1, 2022, if it was originally incorporated under the former Chapter 24.03 RCW. Foreign nonprofits registered to do business in Washington as of December 31, 2021, are also subject to the new chapter without needing to re-register.¹ Nonprofits incorporated under other chapters of Title 24 RCW can voluntarily reorganize under RCW 24.03A by adopting and filing amended articles that conform to the new act.

The switch did not erase anything already in motion. Rights, obligations, remedies, and proceedings that accrued under the old statute remain valid. Where the new act provides a lesser penalty for a violation, that lesser penalty applies.¹ Existing nonprofits did not have to reincorporate, but their current governance practices need to line up with the updated rules.

Forming a Nonprofit Under the Act

Formation starts with articles of incorporation filed through the Washington Secretary of State’s online system. RCW 24.03A.100 requires the articles to include:

A corporate name distinguishable from other entities on file with the Secretary of State.
A statement that the corporation is a nonprofit under this chapter.
The name and Washington address of the initial registered agent.
The name and address of each incorporator.
Whether the corporation will have members.
A provision for how assets will be distributed if the corporation dissolves.²

The standard filing fee is $90. Nonprofits that certify gross revenue under $500,000 in the most recent fiscal year qualify for a reduced $50 fee. An online processing fee applies either way.³

Bylaws should be drafted alongside the articles. They set the internal rules for management, meetings, and decision-making. Bylaws are not filed with the state, but they should be kept available for audits and internal disputes.

Annual Report and Staying in Good Standing

Every domestic nonprofit, and every foreign nonprofit registered in Washington, must file an annual report with the Secretary of State updating the registered agent, principal office, leadership, and nature of the business.¹

The report is due by the last day of the month in which the nonprofit was originally formed. The fee is $60, reduced to $20 for organizations certifying gross revenue under $500,000 in the most recent fiscal year.⁴

Missing the deadline, or letting the registered agent lapse, exposes the corporation to administrative dissolution by the Secretary of State. No lawsuit, no hearing. A nonprofit dissolved this way may apply for reinstatement through the procedures in RCW 23.95.615, and judicial review is available if the Secretary of State denies the application.⁵ Reinstatement generally requires filing all overdue reports, paying outstanding fees, and fixing whatever deficiency triggered the dissolution.

A lapsed registration can also jeopardize federal tax-exempt status, grant eligibility, and the ability to enter contracts. Set a calendar reminder.

Board, Officers, and Fiduciary Duties

Every Washington nonprofit must have a board of directors. The board holds all corporate powers and manages the corporation’s affairs unless the articles or bylaws delegate authority differently. At least one director is required, and the exact number is set by the articles or bylaws.⁶

A quorum is a majority of the total number of directors unless the articles or bylaws set a higher threshold. Written notice of meetings must give directors a reasonable opportunity to participate.⁶ Board meetings may be held by remote communication, following the same notice, quorum, and voting requirements as in-person meetings to the greatest extent practicable.⁷

The corporation must also have at least two officer roles, a president and a secretary, and one person may fill both. Officers execute board decisions and are held to the same fiduciary standards as directors.⁶

Directors must act in good faith and in a manner they reasonably believe to be in the best interests of the corporation. Those obligations are generally described as the duty of care, which means making informed decisions rather than rubber-stamping, and the duty of loyalty, which means putting the corporation’s interests ahead of personal gain or outside affiliations.⁶ Directors who fail to meet these standards can face personal liability, particularly for unauthorized distributions of corporate assets.

Conflict of Interest Transactions

A transaction between the corporation and one of its directors or officers, or an entity in which a director has a financial interest, is not automatically invalid. Under RCW 24.03A.615, the transaction stands if any one of these is true:

The material facts about the relationship and the transaction are disclosed to the board, and a majority of disinterested directors approve it in good faith, even if those disinterested directors are fewer than a quorum.
The material facts are disclosed to the members entitled to vote, and they specifically approve the transaction.
The transaction is fair to the corporation at the time it is authorized.⁸

Interested directors can still be counted toward the quorum at the meeting authorizing the transaction, so a conflict doesn’t paralyze the board. A written conflict of interest policy requiring annual disclosure, recusal, and documentation in the minutes is the safer practice, and the IRS asks about it on Form 1023.

Members, or No Members

A Washington nonprofit may have one or more classes of members, or none at all, and the choice must appear in the articles or bylaws. If the corporation has members, the governing documents must define each class’s rights and obligations. If it has no members, the board holds all decision-making power.⁹

Members typically vote on fundamental changes such as mergers, amendments to the articles, and dissolution. Notice of member meetings must go out no fewer than 10 and no more than 60 days before the meeting date, unless the articles, bylaws, or another provision of the Act set a different window. Members are not personally liable for the corporation’s debts; their exposure is generally limited to unpaid dues or assessments they agreed to in the bylaws.⁹

Mergers

RCW 24.03A.730 allows a Washington nonprofit to merge with other domestic or foreign nonprofits or eligible entities. The merger needs a written plan identifying the surviving entity, setting out the terms and conditions, and explaining how memberships in the merging organizations will be handled. If the corporation is charitable or holds assets for charitable purposes, the plan must also address how those assets will remain devoted to charitable ends.¹⁰

A foreign nonprofit may participate only if the laws of its home jurisdiction permit it. Members with voting rights generally must approve the merger, so the member notice and meeting rules apply directly.

Dissolution and Asset Distribution

Closing a nonprofit is not just paperwork. RCW 24.03A.906 sets a strict order for distributing assets:

Every known debt and liability must be paid, satisfied, or adequately provided for first.
Property held for charitable purposes must be distributed consistently with the corporation’s articles and cannot be diverted from those purposes. Typically it goes to another organization operating exclusively for charitable purposes or to a government entity for public use.
Assets held subject to a condition requiring return or transfer upon dissolution must go back to the appropriate party.¹¹

Property subject to charitable-use restrictions that need modification at dissolution must be modified through the procedures in RCW 24.03A.190 before distribution. Property held in trust follows the trust instrument and Washington’s trust code. Nonprofit assets cannot be divided among directors or officers; they must stay in the charitable stream or follow their original restrictions.

What the Act Does Not Do

Incorporating under RCW 24.03A creates the legal entity under Washington law. It does not grant federal tax-exempt status. Section 501(c)(3) recognition requires a separate application to the IRS, usually on Form 1023 or the streamlined Form 1023-EZ, and the IRS expects specific purpose, private-benefit, political-activity, and dissolution language in the articles before granting exemption.¹² Including that language at formation is far easier than amending the articles later.

1
Washington State Legislature. Washington Code 24.03A – Washington Nonprofit Corporation Act
2
Washington State Legislature. Washington Code 24.03A.100 – Articles of Incorporation
3
Washington Secretary of State. Start a Domestic (WA) Nonprofit Corporation Online
4
Washington Secretary of State. Annual Report: Nonprofit Corporation and Nonprofit Professional Service Corporation
5
Washington State Legislature. Washington Code 24.03A.934 – Reinstatement of Administratively Dissolved Corporation
6
Washington State Legislature. Washington Code 24.03A.490 – Board of Directors
7
Washington State Legislature. Washington Code 24.03A.580 – Board Meetings by Remote Communication
8
Washington State Legislature. Washington Code 24.03A.615 – Conflict of Interest Transactions
9
Washington State Legislature. Washington Code 24.03A.315 – Membership
10
Washington State Legislature. Washington Code 24.03A.730 – Merger of Nonprofit Corporations
11
Washington State Legislature. Washington Code 24.03A.906 – Distribution of Assets on Dissolution
12
Internal Revenue Service. Suggested Language for Corporations and Associations (per Publication 557)