If you are forming a Washington corporation, here are the steps you are going to want to take:
- First, prepare Articles of Incorporation to file with the Washington Secretary of State. If your corporation is going to have multiple shareholders, or if you want to raise angel or venture capital or grant stock options, you will want to make sure your Articles of Incorporation contain certain specific provisions. These provisions may not be present in forms of Articles you find on the Internet. Thus, it is advisable you work with counsel to make sure your Articles are angel and venture capital ready.
- Once your Articles are ready for filing, file them with the Washington Secretary of State.
- When you get your Articles back from the Secretary of State, they will be stamped with your UBI number. You will want to use this number when you fill out your Master Business Application.
- Your initial directors will either be named in the Articles of Incorporation or, if they aren't, the incorporator will need to execute a consent naming the initial directors.
- The initial directors will then need to have an “Organizational Meeting” or execute an “Organizational Consent in Lieu of a Meeting." In this document the initial directors will adopt the Company's Bylaws, appoint its initial officers, and authorize the issuance of the initial shares.
- You will then need to obtain a taxpayer identification number from the IRS.
- If the corporation is eligible and intends to elect to be taxed as an S corporation, do not forget to file the S corporation election timely and have spouses sign it as well if required. If any of the initial shareholders live in community property states, then spousal consents will typically be required even if the shares are held in the name of the shareholder spouse only. An S corporation election without required spousal signatures is not valid.
- You will want to apply for your state and city business licenses.
- The initial shareholders will then subscribe for their shares, execute stock subscription agreements, and pay for their shares. The stock subscription agreements should contain appropriate vesting and buy back rights.
- The initial shareholders will want to make sure that they timely file their 83(b) elections, if required.
- You will want to make sure that all service providers to the company execute IP assignment agreements in which they assign IP arising out of services to the company to the company.
- You will need to open a bank account in the name of the company and deposit to it the checks written to it by the initial shareholders. At all times you will want to make sure that the corporation has a separate financial life than that of its directors or officers or shareholders.
- Do not forget to file the initial annual report that is returned with the file stamped Articles of Incorporation.
It is a good idea to work with counsel throughout this process.