In addition to having the traditional benefits of a corporation such as insulating owners from the liabilities of the business, S-corporations offer an attractive tax advantage where, the corporation will generally be exempt from paying federal income taxes. Instead, the profits of the corporation "pass through"
In addition to having the traditional benefits of a corporation such as insulating owners from the liabilities of the business, S-corporations offer an attractive tax advantage where, the corporation will generally be exempt from paying federal income taxes. Instead, the profits of the corporation "pass through" to the owners where is can be taxed at a lower individual rate.
Choose a name for your corporation. Washington law requires that the name is unique and include some indication of corporate status such as including: company, limited or incorporated (or their abbreviation) in the title. You can check on the availability of your corporation's name with the Secretary of State.
Washington Secretary of State PO Box 40234 Olympia, WA 98504-0234 360-725-0377 sos.wa.gov
Appoint at least one initial director. Washington law requires all corporations to have a director in order to form a corporation. The initial director may be changed after the corporation is formed.
Prepare the corporation's articles of incorporation. While each company is free to determine their own articles of incorporation, at a minimum they must include: (1) the name, address and signature of the incorporator or person responsible for filing the application for formation; (2) the name of the corporation; (3) the name and address of the corporation's agent or official legal representative (3) the name and address of the corporation's director; (4) a statement of the corporation's business purpose (such as, "to generally conduct lawful business") and (5) the maximum amount of shares (if any) the corporation plans to issue.
File the articles of incorporation with the Secretary of State. This can be done in by fax, mail, in person or online. There is a $175 filing fee (for online applications the filing fee is $195).
File a Master Business Application with the Department of Licensing. You will need a business license to hire employees from within Washington state. There is a filing fee on $20. This can be done by mail, in person or online.
Washington Department of Licensing Master License Service PO Box 9034 Olympia, WA 98507-9034 360-664-1400 dol.wa.gov
File a Form 2553 with the Internal Revenue Service (IRS) designating that your corporation will be an S-corporation. According to the IRS, this must be done within "two months and 15 days" from formation of the corporation in order to achieve S-corporation status.
Forming a corporation is just the first step in maintaining your corporation in Washington. Washington law, for example requires that you file an initial annual report within 120 days of filing the articles of incorporation with the state. Additionally, the law require that soon after formation you hold a organizational meeting to determine the permanent director(s) of the corporation, adopt corporation by-laws and perform other administrative tasks.2.
If you have any questions, contact the Secretary of State or the Department of Licensing. In addition to being important sources of information, they also provide numerous guides and forms that are helpful in the formation process.
- washington map and flag image by Vladislav Gajic from Fotolia.com