RCW ch. 24.03A — Revised Code of Washington Chapter 24.03A RCW — Washington Nonprofit Corporation Act

RCW 24.03A.005 Short title. This chapter may be known and cited as the Washington nonprofit corporation act. [ 2021 c 176 s 1101.] NOTES: Effective date— RCW 24.03A.010 Definitions. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise. (1) "Address," unless otherwise specified, means either a physical mailing address or an electronic address. (2) "Articles" or "articles of incorporation" means the original articles of incorporation as modified by all amendments thereof, as filed by the secretary of state. If any record filed under this chapter restates the articles in their entirety, thenceforth the articles shall not include any prior filings. (3) "Board" or "board of directors" means the team or body of individuals ultimately responsible for the management of the activities and affairs of the nonprofit corporation, regardless of the name used to refer to the team or body. (4) "Bylaws" means the code or codes of rules, other than the articles, adopted for the regulation and governance of the internal affairs of the nonprofit corporation, regardless of the name or names used to refer to those rules, excluding separate policies or procedures adopted by the board. (5) "Charitable corporation" means a domestic nonprofit corporation that is operated primarily or exclusively for one or more charitable purposes. (6) "Charitable purpose" means a purpose that: (a) Would make a corporation organized and operated exclusively for that purpose eligible to be exempt from taxation under section 501(c)(3) of the internal revenue code; or (b) Is considered charitable under applicable law other than this chapter or the internal revenue code. (7) "Contribution" means the payment, donation, or promise, for consideration or otherwise, of any money or property of any kind or value which contribution is wholly or partly induced by a solicitation. (8) "Corporation" means a domestic nonprofit corporation, unless otherwise specified. (9) "Delegate" means a person elected or appointed to vote in a representative capacity for the election of directors or on other matters. (10) "Deliver" or "delivery" of a record means delivery by hand, United States mail, private courier service, electronic transmission, or other methods of delivery used in conventional commercial practice, except that delivery to the secretary of state means actual receipt by the secretary of state. (11) "Director" means an individual designated, elected, or appointed, by that or any other name or title, to act as a member of the board of directors, while the individual is holding that position. (12) "Domestic," with respect to an entity, means governed as to its internal affairs by the law of this state. (13) "Domestic corporation" or "domestic nonprofit corporation" means a domestic corporation incorporated under or subject to this chapter. (14) "Domestic unincorporated entity" means an unincorporated entity whose internal affairs are governed by the laws of this state. (15) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. (16) "Electronic transmission" means an electronic communication: (a) Not directly involving the physical transfer of a record in a tangible medium; and (b) That may be retained, retrieved, and reviewed by the sender and the recipient thereof, and that may be directly reproduced in a tangible medium by such a sender and recipient. (17) "Electronically transmitted" means that the sender of an electronic transmission initiated the electronic transmission. (18) "Eligible entity" means a domestic or foreign unincorporated entity, a domestic nonprofit corporation incorporated under a corporations statute other than this chapter or its predecessor statutes, or a domestic or foreign for-profit corporation. (19) "Employee" does not include an individual serving as an officer or director who is not otherwise employed by the corporation. (20) "Entitled to vote" means entitled to vote on the matter under consideration pursuant to the articles or bylaws of the nonprofit corporation or any applicable controlling provision of law. (21) "Entity" means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and includes, but is not limited to: (a) A domestic or foreign for-profit corporation; (b) A domestic or foreign nonprofit corporation; (c) A domestic or foreign general or limited partnership; (d) A domestic or foreign limited liability partnership; (e) A domestic or foreign limited liability company; (f) Any other domestic or foreign unincorporated entity; (g) A domestic or foreign estate or trust; (h) The federal government; (i) A tribal government; and (j) A state or local government, foreign government, or governmental subdivision. (22) "Ex officio director" means an individual who becomes a member of the board of directors not through the regular elections process but by virtue of another position that he or she holds. Unless the articles or bylaws specifically state that an ex officio director does not have the right to vote, such a director has the same right to vote as any other director. (23) "Execute" or "executed" means: (a) Signed, with respect to a written record; (b) Electronically transmitted along with sufficient information to determine the sender's identity and intent to execute; or (c) With respect to a record to be filed by the secretary of state, in compliance with the standards for filing as prescribed by this chapter; chapter 23.95 RCW; or the secretary of state. (24) "Federal government" includes a district, authority, bureau, commission, department, and any other agency of the federal government of the United States. (25) "Filing entity" means an unincorporated entity that is created by filing a public organic record. (26) "For-profit corporation" or "domestic for-profit corporation" means a domestic business corporation incorporated under or subject to Title 23B RCW or any successor provisions. (27) "Foreign," with respect to an entity, means governed as to its internal affairs by the law of a jurisdiction other than this state. (28) "Foreign for-profit corporation" means a foreign corporation that would be a for-profit corporation if incorporated under the law of this state. (29) "Foreign corporation" or "foreign nonprofit corporation" means a foreign corporation that would be a nonprofit corporation if incorporated under the law of this state. (30) "Foreign unincorporated entity" means an unincorporated entity whose internal affairs are governed by an organic law of a jurisdiction other than this state. (31) "Fundamental transaction" means an amendment of the articles or bylaws, merger, sale of all or substantially all of the assets, domestication, conversion, or dissolution of a nonprofit corporation. (32) "Gift instrument" means a record or records under which property is donated to, transferred to, granted to, or held by the corporation. A solicitation constitutes a gift instrument with respect to a donation, transfer, or grant of property made in response to the solicitation only if: (a) The solicitation was in the form of a record , including[,] but not limited to, invitations made by electronic transmission or in electronic media, or was documented in the form of a record created no later than ninety days after the solicitation was made; and (b) The donation, transfer, or grant of property was made within one year of the solicitation. (33) "Governmental subdivision" includes an authority, county, district, and municipality formed or authorized by any federal, state, or local government. (34) "Includes" denotes a partial definition. (35) "Individual" means a natural person. (36) "Interest" means either or both of the following rights under the organic law of an unincorporated entity: (a) The right to receive distributions from the entity either in the ordinary course or upon liquidation; or (b) The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business, activities, or affairs. (37) "Interest holder" means a person who holds of record an interest. (38) "Interest holder liability" means personal liability for a debt, obligation, or liability of a domestic or foreign for-profit or nonprofit corporation or unincorporated entity that is imposed on a person: (a) Solely by reason of the person's status as a shareholder, interest holder, or member; or (b) By the articles, bylaws, or an organic record pursuant to a provision of the organic law authorizing the articles, bylaws, or an organic record to make one or more specified shareholders, interest holders, or members liable in their capacity as shareholders, interest holders, or members for all or specified debts, obligations, or liabilities of the entity. (39) "Internal revenue code" means Title 26 U.S.C., the federal internal revenue code of 1986, as amended, or any successor statute. (40) "Jurisdiction," when used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country. (41) "Jurisdiction of formation" means the jurisdiction whose law includes the organic law of an entity. (42) "Material interest" means an actual or potential benefit or detriment, other than one that would devolve on the nonprofit corporation or the members generally, that would reasonably be expected to impair the objectivity of an individual's judgment when participating in the action to be taken. (43) "Material relationship" means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of an individual's judgment when participating in the action to be taken. (44) "Means" denotes an exhaustive definition. (45) "Member" means: (a) Where the articles state that the corporation has members, a person who has a right set forth in the articles or bylaws, not as a delegate, to select or vote for the election of directors or delegates or to vote on at least one type of fundamental transaction. (b) For a corporation formed before January 1, 2022, the articles of which do not state that the corporation has members, a person who: (i) Is defined as a member in the bylaws; and (ii) Has a right provided in the bylaws, not as a delegate, to select or vote for the election of directors or delegates or to vote on at least one type of fundamental transaction. (c) A delegate or group of delegates, to the extent: (i) The powers, functions, or authority of the members have been vested in, or are exercised by, such a delegate or group of delegates; and (ii) The provision of this chapter in which the term appears is relevant to the discharge by the delegate or group of delegates of its powers, functions, or authority. (46) "Membership" means the rights and any obligations of a member in a nonprofit corporation. (47) "Membership corporation" means a nonprofit corporation whose articles provide that it has members, or that has members as defined in subsection (45) of this section. (48) "Nonfiling entity" means an unincorporated entity that is not created by filing a public organic record. (49) "Nonmembership corporation" means a nonprofit corporation whose articles do not provide that it has members and that does not have members as defined in subsection (45)(b) of this section. (50) "Nonprofit corporation" means a domestic nonprofit corporation, unless otherwise specified. (51) "Notice" has the same meaning as described in RCW 24.03A.015. (52) "Notify" means to provide notice as defined in RCW 24.03A.015. (53) "Officer" includes: (a) A person who is an officer as defined in RCW 24.03A.585; and (b) If a nonprofit corporation is in the hands of a custodian, receiver, trustee, or other court-appointed fiduciary, that fiduciary or any person appointed by that fiduciary to act as an officer for any purpose under this chapter. (54) "Organic law" means the law of an entity's jurisdiction of formation governing the internal affairs of the entity. (55) "Organic record" means a public organic record or the private organic rules. (56) "Person" includes an individual or an entity. (57) "Principal office" means the office designated in the annual report required under RCW 23.95.255 as the location of the principal executive office of a domestic or foreign nonprofit corporation, whether or not in this state. (58) "Private organic rules" means the rules, whether or not in a record, that govern the internal affairs of an unincorporated entity, are binding on all of its interest holders, and are not part of its public organic record, if any. (59) "Proceeding" means any civil suit or criminal, administrative, or investigatory action. (60) "Property" means all property, whether real, personal, or mixed or tangible or intangible, including cash, securities, or real property, or any right or interest therein. (61) "Property held for charitable purposes" is as defined in RCW 24.03A.165. (62) "Public organic record" means the record, if any, that is filed as a public record to create an unincorporated entity and any amendment to or restatement of that record. (63) "Record" means information inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. An electronic transmission not directly involving the physical transfer of a record in a tangible medium is a record only if: (a) It may be retained, retrieved, and reviewed by the sender and the recipient thereof; and (b) It may be directly reproduced in a tangible medium by the sender and the recipient thereof. (64) "Record date" means the date established under RCW 24.03A.420 on which a nonprofit corporation determines the identity of its members and the membership rights they hold for purposes of this chapter. The determinations shall be made as of 12:01 a.m. on the record date unless another time for doing so is specified when the record date is fixed. (65) "Registered foreign nonprofit corporation" means a foreign nonprofit corporation registered to do business in this state. (66) "Religious corporation" means a charitable corporation including, but not limited to, a church, mosque, synagogue, temple, nondenominational ministry, interdenominational or ecumenical organization, or faith-based social service agency, that is: (a) Organized primarily for religious purposes; (b) Operated primarily, in good faith, to carry out religious purposes; (c) Held out to the public as carrying out religious purposes; and (d) Not engaged primarily or substantially in the exchange of goods or services for consideration, unless the consideration does not exceed nominal amounts. (67) "Shareholder" means the person in whose name shares are registered in the records of a domestic or foreign for-profit corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with such a corporation. (68) "Shares" means the units into which the proprietary interests in a domestic or foreign for-profit corporation, or a nonprofit corporation incorporated under organic law other than this chapter that permits proprietary interests in such a corporation, are divided. (69) "Solicitation" means any oral or written request for a contribution, including an offer or attempt by the solicitor to sell any property, rights, services, or other thing, in connection with which: (a) Any appeal is made for any charitable purpose; (b) The name of any charitable corporation, or any foreign nonprofit corporation that would be a charitable corporation if it were incorporated under this chapter, is used as an inducement for making the contribution or consummating the sale; or (c) Any statement is made that implies that the whole or any part of the contribution or the proceeds from the sale will be applied toward any charitable purpose or donated to any entity organized or operated for charitable purposes. (70) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States, and any agency or governmental subdivision of any of the foregoing. (71) "Tangible medium" means a writing, copy of a writing, facsimile, or a physical reproduction, each on paper or on other tangible material. (72) "Unincorporated entity" means an entity that is not any of the following: A domestic or foreign for-profit or nonprofit corporation, an estate, a trust, a governmental subdivision, the federal government, a tribal government, a state or local government, a municipal corporation, a foreign government, or a governmental subdivision. The term includes a general partnership, limited liability company, limited partnership, cooperative association, limited cooperative association, business or statutory trust, joint stock association, and unincorporated nonprofit association. (73) "Vote," "voting," or "casting a vote" includes voting occurring at a meeting; voting of members by ballot or proxy; and the giving of consent in the form of a record without a meeting by a person entitled to vote. Whether or not the person entitled to vote characterizes such conduct as voting or casting a vote, the term does not include either recording the fact of abstention or failing to vote for: (a) A candidate; or (b) Approval or disapproval of a matter. (74) "Voting group" means one or more classes of members that under the articles, bylaws, or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of members. All members entitled by the articles, bylaws, or this chapter to vote generally on that matter are for that purpose a single voting group. (75) "Voting power" means the current power to vote in the election of directors or delegates, or to vote on approval of any type of fundamental transaction. [ 2021 c 176 s 1102.] NOTES: Effective date— RCW 24.03A.015 Notice. (1) Notice under this chapter must be in the form of a record unless this chapter or the articles or bylaws allow oral notice. (2) Notice may be communicated in person or by delivery. If these forms of communication are impracticable, notice may be communicated by a newspaper of general circulation in the area where published, or by radio, television, or other form of public broadcast communication. (3) Notice, other than notice described in subsection (4) of this section, is effective at the earliest of the following: (a) When received; (b) When left at the recipient's residence or usual place of business; (c) Five days after its deposit in the United States mail or with a commercial delivery service, if the postage or delivery charge is paid and the notice is correctly addressed; or (d) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, or by commercial delivery service. (4) Notice in the form of a record by a membership corporation to a member is effective: (a) Five days after its deposit in the United States mail or with a commercial delivery service, if the postage or delivery charge is paid and the notice is correctly addressed to the member's address shown in the corporation's current record of members; (b) When given, if the notice is delivered by electronic transmission to the member's address shown in the corporation's current record of members; or (c) When given, if the notice is delivered in any other manner that the member has authorized. (5) Notice to a domestic or registered foreign nonprofit corporation may be delivered to its registered agent or to the corporation or its secretary at its principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its registration statement. (6) Where oral notice is permitted, it is effective when communicated, if communicated in a comprehensible manner. (7) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. If the articles or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of this chapter, those requirements govern. (8) With respect to electronic transmissions: (a) Unless otherwise provided in the articles or bylaws, or otherwise agreed between the sender and the recipient, an electronic transmission is received when: (i) It enters an electronic system that the recipient has designated or currently uses for the purpose of receiving electronic transmissions of the type sent; and (ii) It is in a form capable of being processed by that system. (b) An electronic transmission is received under (a)(i) of this subsection even if no individual is aware of its receipt. (c) Receipt of an electronic acknowledgment from an electronic system described in (a)(i) of this subsection establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received, and is not necessary for the record to be received. (9) A member may revoke in the form of a record a corporation's express or implied authorization to deliver notices or communications by electronic transmission to the member. Such authorization is deemed revoked with respect to a member if: (a) The corporation cannot deliver two consecutive notices or other communications to the member's address shown in the corporation's current record of members; and (b) The inability becomes known to the secretary or other person responsible for giving the notice or other communication; but the failure to treat the inability as a revocation does not invalidate any meeting or other action. [ 2021 c 176 s 1103.] NOTES: Effective date— RCW 24.03A.020 Service on corporations. (1) Service upon a nonprofit corporation of any process, notice, or demand required or permitted by law may be made by serving the nonprofit corporation's registered agent. (2) Service upon a nonprofit corporation made by serving the nonprofit corporation's registered agent, or service on the nonprofit corporation in the absence of a registered agent, is governed by chapter 23.95 RCW. [ 2021 c 176 s 1104.] NOTES: Effective date— RCW 24.03A.025 Venue for actions. Except as provided under federal or state law or in specific provisions of this chapter, every action arising under this chapter shall be tried in, and "the court" throughout this chapter refers to, the superior court: (1) In the county where the corporation's principal office in this state is located; (2) If the corporation has no principal office in this state, in the county where the corporation's registered agent in this state is located; (3) Of King county; or (4) Of Thurston county. [ 2021 c 176 s 1105.] NOTES: Effective date— RCW 24.03A.030 Application to existing nonprofit corporations. (1) This chapter applies to every domestic nonprofit corporation in existence on January 1, 2022, that was incorporated under chapter 24.03 RCW or filed a statement of election through which it elected to have chapter 24.03 RCW apply to it. (2) Any corporation or association organized under any other chapter of Title 24 RCW may be reorganized under this chapter by adopting and filing amendments to its articles in accordance with this chapter. The articles as amended shall conform to this chapter, and shall state that the corporation accepts the benefits of and will be bound by this chapter. [ 2021 c 176 s 1106.] NOTES: Effective date— RCW 24.03A.035 Application to registered foreign nonprofit corporations. A foreign nonprofit corporation registered as of December 31, 2021, is subject to this chapter but is not required to obtain a new statement of registration to transact business in this state. [ 2021 c 176 s 1107.] NOTES: Effective date— RCW 24.03A.040 Relationship to prior statutes. (1) Except as provided in subsection (2) of this section, the repeal of chapter 24.03 RCW by chapter 176, Laws of 2021 does not affect: (a) The operation of the repealed chapter or any action taken under it before its repeal; (b) Any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the repealed chapter before its repeal; (c) Any violation of the repealed chapter, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal; or (d) Any proceeding, reorganization, or dissolution commenced under the repealed chapter before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the repealed chapter as if it had not been repealed. (2) If a penalty or punishment imposed for violation of chapter 24.03 RCW repealed by chapter 176, Laws of 2021 is reduced by this chapter, then the penalty or punishment if not already imposed shall be imposed in accordance with this chapter. [ 2021 c 176 s 1108.] NOTES: Effective date— RCW 24.03A.045 Relationship to other laws. (1) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter. (2) This chapter does not authorize an act prohibited by, and does not affect the application or requirements of, law other than this chapter. (3) This chapter modifies, limits, or supersedes the federal electronic signatures in global and national commerce act, Title 15 U.S.C. Sec. 7001 et seq., but this chapter does not modify, limit, or supersede section 101(c) of that act or authorize delivery by electronic transmission of any of the notices described in section 103(b) of that act. [ 2021 c 176 s 1109.] NOTES: Effective date— RCW 24.03A.050 Subordination to canon law. To the extent religious doctrine or canon law governing the internal affairs of a nonprofit corporation is inconsistent with this chapter, the religious doctrine or canon law controls to the extent required by the United States Constitution, the state Constitution, or both. [ 2021 c 176 s 1110.] NOTES: Effective date— RCW 24.03A.055 Applicability of uniform business organizations code. Filing of documents under this chapter by the secretary of state is governed by this chapter and chapter 23.95 RCW. [ 2021 c 176 s 1201.] NOTES: Effective date— RCW 24.03A.060 Filing requirements. (1) To be entitled to filing by the secretary of state, a record delivered for filing under this chapter must: (a) Satisfy the requirements set forth in RCW 23.95.200; (b) Contain all information required under this chapter and chapter 23.95 RCW; (c) Be executed on behalf of the domestic or foreign entity as follows: (i) If the entity is a domestic or foreign nonprofit corporation, by an officer; (ii) If the entity is not a domestic or foreign nonprofit corporation, by a person with authority to sign for the entity; or (iii) If the entity is in the hands of a custodian, receiver, trustee, or other court-appointed fiduciary, by that fiduciary; and (d) Satisfy the requirements of any other provision of this chapter or chapter 23.95 RCW that adds to or varies any of the requirements in this section. (2) A filed record may include additional information not in conflict with the requirements of subsection (1) of this section. (3)(a) Whenever a provision of this chapter permits any of the terms of a plan or a filed record to be dependent on facts objectively ascertainable outside the plan or filed record, the following provisions apply: (i) The plan or filed record shall set forth the manner in which the facts will operate upon the terms of the plan or filed record. (ii) The facts may include: (A) Any of the following that is available in a nationally recognized news or information medium either in print or electronically: Statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data; (B) A determination or action by any person or body, including the nonprofit corporation or any other party to a plan or filed record; or (C) The terms of, or actions taken under, an agreement to which the corporation is a party, or any other agreement or record. (d)[(b)] As used in this subsection [section]: (i) "Filed record" means a record filed by the secretary of state under any provision of the uniform business organizations code or any provision of this chapter except RCW 24.03A.260 through 24.03A.310, except an annual report filed pursuant to RCW 24.03A.070; and (ii) "Plan" means a plan of domestication, business conversion, entity conversion, distribution, or merger. [ 2021 c 176 s 1202.] NOTES: Effective date— RCW 24.03A.065 Electronic filings. Any rules governing electronic filing adopted by the secretary of state under RCW 23.95.115(2) apply to all filings required or permitted under this chapter unless such rules, this chapter, or chapter 23.95 RCW specify otherwise. [ 2021 c 176 s 1203.] NOTES: Effective date— RCW 24.03A.070 Annual report. Each domestic nonprofit corporation, and each registered foreign nonprofit corporation, shall deliver to the secretary of state for filing an annual report as required under RCW 23.95.255(2). [ 2021 c 176 s 1204.] NOTES: Effective date— RCW 24.03A.075 Major changes by charitable corporations. (1) A charitable corporation shall report any action described in subsection (2) of this section on the next annual report that the charitable corporation delivers to the secretary of state for filing under RCW 24.03A.070, except as provided in subsection (3) of this section. (2) The actions that create a reporting requirement under this section are: (a) Amendment of the charitable corporation's articles to include one or more purposes of the corporation substantially different from any purpose stated in the charitable corporation's articles in effect before the amendment; or (b) Operation of a significant program or activity that is substantially different from both: (i) Programs or activities the charitable corporation has previously operated; and (ii) Programs or activities described in the most recent application for recognition of exemption from federal income tax that the charitable corporation has filed with the internal revenue service and in response to which the internal revenue service has issued a determination letter of tax-exempt status to the charitable corporation. (3) A charitable corporation is not required to report actions described in subsection (2) of this section: (a) If the charitable corporation was a religious corporation both before and after it took the action; (b) Within the charitable corporation's first three years of existence, if all programs or activities the charitable corporation operates are consistent with the purposes set forth in the charitable corporation's articles; or (c) When the charitable corporation operates a program or activity described in subsection (2)(b) of this section, if all funds expended to conduct such a program or activity are derived only from one or more of the following sources: (i) Contributions or sales in response to one or more solicitations in which: (A) The program or activity was clearly described; and (B) A statement was made that implies that the corporation will apply any contribution, or proceeds from any sale, in connection with those solicitations toward the program or activity; (ii) Admissions, performance of services, or furnishing of facilities; (iii) Sales of goods not in connection with any solicitation; (iv) Income from investments of the charitable corporation that is not subject to any gift restriction; or (v) Revenue from any source that is recognized after the program or activity has been in continuous operation and disclosed to the general public for a period of at least three years. (4) The secretary of state shall deliver to the attorney general a copy of every annual report filed by the secretary of state that includes a report described in this section. [ 2021 c 176 s 1205.] NOTES: Effective date— RCW 24.03A.080 Powers of secretary of state. The secretary of state has the powers reasonably necessary to perform the duties required by this chapter, including adoption, amendment, or repeal of rules under chapter 34.05 RCW for the efficient administration of this chapter. [ 2021 c 176 s 1206.] NOTES: Effective date— RCW 24.03A.085 Fees. The secretary of state may adopt rules in accordance with chapter 34.05 RCW setting fees for any services provided by the secretary of state under this chapter. [ 2021 c 176 s 1207.] NOTES: Effective date— RCW 24.03A.090 Incorporators. One or more individuals may act as the incorporators of a nonprofit corporation by delivering articles of incorporation to the secretary of state for filing. Individuals acting as incorporators must be at least eighteen years old. [ 2021 c 176 s 1301.] NOTES: Effective date— RCW 24.03A.095 Corporate name. The name or any reserved name of a nonprofit corporation is governed by chapter 23.95 RCW. [ 2021 c 176 s 1302.] NOTES: Effective date— RCW 24.03A.100 Articles of incorporation. (1) The articles of incorporation shall set forth: (a) A name for the nonprofit corporation that satisfies the requirements of RCW 24.03A.095; (b) The name and address of the corporation's initial registered agent; (c) That the corporation is incorporated under this chapter; (d) The purpose or purposes for which the corporation is organized; (e) The number of directors constituting the initial board of directors, and the names and mailing addresses of the persons who are to serve as the initial directors; (f) If the corporation will have members as defined in RCW 24.03A.010, a statement that the corporation will have members; (g) The distribution of assets upon dissolution; (h) The name and mailing address of each incorporator; and (i) The signature of each incorporator. (2) The articles of incorporation may set forth: (a) A statement that the corporation has no members as defined in this chapter (whether or not the corporation uses the term "member" to define one or more classes of persons who are not members as defined in this chapter); (b) The names of the initial members, if any; (c) Provisions not inconsistent with law regarding: (i) Managing the business and regulating the affairs of the corporation; (ii) Defining, limiting, and regulating the powers of the corporation, its board of directors, and the members, if any; (iii) The characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members; (d) A provision permitting or making obligatory indemnification of any individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding, subject to the limitations set forth in RCW 24.03A.630; (e) Provisions required if the corporation is to be exempt from taxation under federal, state, or local law; or (f) Any other provision that this chapter specifically permits to be set forth in the articles or bylaws. (3) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter. (4) Provisions of the articles may be made dependent upon facts objectively ascertainable outside the articles in accordance with RCW 24.03A.060(3). [ 2021 c 176 s 1303.] NOTES: Effective date— RCW 24.03A.105 Effectiveness of incorporation. (1) Unless a delayed effective date is specified, the corporate existence begins on the date the articles are filed by the secretary of state. (2) The filing of the articles by the secretary of state is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by this state to cancel or revoke the incorporation or involuntarily dissolve the nonprofit corporation. [ 2021 c 176 s 1304.] NOTES: Effective date— RCW 24.03A.110 Requirement of registered agent. (1) Each nonprofit corporation shall designate and maintain a registered agent in this state. (2) The designation and maintenance of a nonprofit corporation's registered agent are governed by chapter 23.95 RCW. [ 2021 c 176 s 1305.] NOTES: Effective date— RCW 24.03A.115 Liability for preincorporation transactions. All persons purporting to act as or on behalf of a nonprofit corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting. [ 2021 c 176 s 1306.] NOTES: Effective date— RCW 24.03A.120 Organization of corporations. (1) After incorporation: (a) The initial directors shall hold an organizational meeting at the call of a majority of the initial directors to complete the organization of the nonprofit corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting; and (b) If the initial directors resign or refuse to meet, then the incorporator or incorporators shall hold a meeting at the call of a majority of the incorporators to elect a board of directors who shall complete the organization of the corporation. (2) An organizational meeting may be held in or out of this state. (3) The directors or incorporators may take organizational action without a meeting if the action taken is evidenced by one or more consents in the form of a record describing the action taken and executed by each director or incorporator. [ 2021 c 176 s 1307.] NOTES: Effective date— RCW 24.03A.125 Bylaws. (1) The board shall adopt initial bylaws for the corporation. (2) The bylaws may contain any provision for managing the activities and regulating the affairs of the corporation that is not inconsistent with law or the articles. Whenever a provision of the bylaws is inconsistent with a provision of the articles, the provision of the articles controls. [ 2021 c 176 s 1308.] NOTES: Effective date— RCW 24.03A.130 Purposes. (1) Nonprofit corporations may be organized under this chapter for the purpose of engaging in any lawful activity. A nonprofit corporation may set forth a more limited purpose or purposes in its articles. (2) A charitable corporation formed on or after January 1, 2022, must be organized under this chapter, unless incorporating under this chapter is prohibited by another statute of this state. (3) A corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under this chapter only if incorporating under this chapter is not prohibited by the other statute. The corporation is subject to all the limitations of the other statute. Organizations subject to any provision of the banking or insurance laws of this state may not be organized under this chapter, except that any nonprofit corporation heretofore organized under any act hereby repealed and existing for the purpose of providing health care services as defined in RCW 48.44.010 or 48.46.020, as now or hereafter amended, continues to be organized under this chapter. [ 2021 c 176 s 1401.] NOTES: Effective date— RCW 24.03A.135 Power to modify purposes. (1) Unless otherwise prohibited by its articles or bylaws, a nonprofit corporation, including a charitable corporation, may modify its purposes by: (a) Amending its articles or bylaws in accordance with this chapter and with those documents; and (b) Making provision for any gift restrictions as defined in RCW 24.03A.185, either by ensuring continued adherence to those restrictions or by obtaining modification as provided in RCW 24.03A.190. (2) A decision to modify the corporation's purposes is subject to judicial review only with respect to violations of this chapter or other applicable law. [ 2021 c 176 s 1402.] NOTES: Effective date— RCW 24.03A.140 General powers. Unless its articles provide otherwise, every nonprofit corporation has perpetual duration and has the same powers as an individual to do all things necessary or convenient to carry out its affairs including, without limitation, power to: (1) Sue and be sued, complain[,] and defend in its corporate name; (2) Have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it; (3) Make and amend bylaws and policies, not inconsistent with its articles or with the laws of this state, for managing and regulating the affairs of the corporation; (4) Purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located; (5) Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property; (6) Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity; (7) Make contracts; make guarantees that may reasonably be expected to benefit, directly or indirectly, the guarantor corporation; incur liabilities; borrow money; issue notes, bonds, and other obligations; and secure any of its obligations by mortgage or pledge of any of its property or income; (8) Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except as limited by RCW 24.03A.605; (9) Be a promoter, partner, shareholder, member, trustee, associate, or manager of any partnership, joint venture, trust, or other entity; (10) Conduct its activities, locate offices, and exercise the powers granted by this chapter within or without this state; (11) Elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit, except as limited by RCW 24.03A.605 and 24.03A.610; (12) Pay pensions and establish pension plans, pension trusts, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents, except as limited by RCW 24.03A.610; (13) Make donations for charitable purposes; (14) Impose dues, assessments, admission, and transfer fees on its members; (15) Establish conditions for admission or removal of members, admit or remove members, and issue memberships; (16) Carry on a business, and, subject to the requirements of RCW 24.03A.155 and 24.03A.610, make net profits and accumulate reserves; and (17) Make payments or donations, or do any other acts, not inconsistent with law, that further the purposes, activities, and affairs of the corporation. [ 2021 c 176 s 1403.] NOTES: Effective date— RCW 24.03A.145 Emergency powers. (1) For purposes of this section, an emergency exists if a quorum of the directors cannot readily be assembled because of some catastrophic event. A catastrophic event is a sudden, natural or man-made situation where rapid change or destruction has occurred that has limited normal functions in daily living including communications and travel. (2) In anticipation of and for the duration of an emergency, the board of a nonprofit corporation may: (a) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and (b) Take those actions necessary to preserve the corporation and ensure that it acts in accordance with its purposes. (3) During an emergency, unless the articles or bylaws provide otherwise: (a) Notice of a meeting of the board need be given only to those directors it is practicable to reach and may be given in any practicable manner; (b) The quorum required under RCW 24.03A.565 or the articles or bylaws need not be established at such a meeting; and (c) One or more officers of the nonprofit corporation present at a meeting of the board may be deemed to be directors for purposes of the meeting. (4) In anticipation of and for the duration of an emergency, any meeting of the membership or of the board of directors may be conducted through one or more means of remote communication through which members or directors not physically present may simultaneously participate with each other during the meeting, notwithstanding any provision of the articles or bylaws that provides otherwise. A member or director participating in a meeting through such means in anticipation of and for the duration of an emergency is considered present in person at the meeting. (5) Corporate action taken in good faith during an emergency to further the purposes and the ordinary affairs of the nonprofit corporation: (a) Binds the corporation; and (b) May not be used to impose liability on a director, officer, employee, or agent. [ 2021 c 176 s 1404.] NOTES: Effective date— RCW 24.03A.150 Ultra vires action. (1) Except as provided in subsection (2) of this section, the validity of corporate action may not be challenged on the ground that the nonprofit corporation lacks or lacked power to act. (2) The power of a nonprofit corporation to act may be challenged: (a) In a proceeding by the corporation, directly or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or (b) In a proceeding by the attorney general under RCW 24.03A.936. [ 2021 c 176 s 1405.] NOTES: Effective date— RCW 24.03A.155 Distributions prohibited. (1) A nonprofit corporation shall not distribute any property held for charitable purposes to its members, directors, officers, or other persons who are in a position to exercise substantial influence over the affairs of the corporation, except: (a) As permitted under RCW 24.03A.160; (b) To another entity that is a charitable corporation or is organized and operated exclusively for one or more charitable purposes; or (c) To the federal government, a tribal government, or a state or local government for a public purpose. (2) A nonprofit corporation shall not pay dividends or make distributions of any part of its assets, income, or profits to its members, directors, officers, or other persons who are in a position to exercise substantial influence over the affairs of the corporation, except as permitted under: (a) Subsection (1)(b) or (c) of this section; (b) Subsection (3) of this section; (c) RCW 24.03A.160; or (d) RCW 24.03A.906. (3) A nonprofit corporation other than a charitable corporation may confer benefits upon or make transfers to members or nonmembers in conformity with its purposes, repurchase its memberships only to the extent provided in RCW 24.03A.380, or repay capital contributions, subject to the following conditions: (a) Property held for charitable purposes may not be used to confer benefits upon or make transfers to members or nonmembers, repurchase memberships, or repay capital contributions; (b) The nonprofit corporation may not be insolvent, and conferral of benefits, making of transfers, repurchase of memberships, or repayment of capital contributions shall not render the corporation insolvent or unable to carry out its purposes; and (c) The fair value of the corporation's assets remaining after the conferring of benefits, making of transfers, repurchase, or repayment must be sufficient to meet the corporation's liabilities. [ 2021 c 176 s 1406.] NOTES: Effective date— RCW 24.03A.160 Reasonable compensation permitted. A nonprofit corporation, including a charitable corporation, may pay reasonable compensation to members, directors, or officers for services rendered, or reimburse reasonable expenses incurred by members, directors, or officers in connection with services rendered. [ 2021 c 176 s 1407.] NOTES: Effective date— RCW 24.03A.165 Property held for charitable purposes. (1) Property owned by a nonprofit corporation is held for charitable purposes if: (a) The corporation is a charitable corporation; (b) The property is subject to restrictions contained in a gift instrument that limit its use only to one or more charitable purposes; or (c) The property is subject to restrictions contained in the corporation's articles, bylaws, or any record adopted by the corporation's board, or to other limitations in the form of a record, that limit its use only to one or more charitable purposes. (2) In no event may property held for charitable purposes be distributed in a manner inconsistent with RCW 24.03A.155, 24.03A.900, or 24.03A.906. [ 2021 c 176 s 1408.] NOTES: Effective date— RCW 24.03A.170 Debt and security interests. (1) A nonprofit corporation shall not issue bonds or other evidences of indebtedness except for cash or other property, tangible or intangible, or labor or services actually received by or performed for the corporation or for its benefit or in its formation or reorganization, or a combination thereof. (2) The board may authorize a mortgage or pledge of, or the creation of a security interest in, all or any part of the property of the nonprofit corporation, or any interest therein. Unless otherwise provided in the articles or bylaws, the vote or consent of the members is not required to make effective such an action by the board. [ 2021 c 176 s 1409.] NOTES: Effective date— RCW 24.03A.175 Private foundations. (1) Except as provided in subsection (2) of this section, a nonprofit corporation that is a private foundation as defined in section 509(a) of the internal revenue code shall: (a) Distribute sufficient amounts for each taxable year at a time and in a manner so as not to subject the corporation to tax under section 4942 of the internal revenue code; (b) Not engage in any act of self-dealing as defined in section 4941(d) of the internal revenue code; (c) Not retain any excess business holdings as defined in section 4943(c) of the internal revenue code; (d) Not make any investments in a manner that subjects the corporation to tax under section 4944 of the internal revenue code; and (e) Not make any taxable expenditures as defined in section 4945(d) of the internal revenue code. (2) Subsection (1) of this section does not apply to a nonprofit corporation incorporated before January 1, 1970, that has been properly relieved from the requirements of section 508(e)(1) of the internal revenue code by a timely judicial proceeding. [ 2021 c 176 s 1410.] NOTES: Effective date— RCW 24.03A.180 Unrestricted gifts. Giving a gift to a nonprofit corporation, including a charitable corporation, without a gift instrument transfers complete ownership of the gift to the nonprofit corporation. A restricted gift to a nonprofit corporation is created only by a gift instrument. [ 2021 c 176 s 1501.] NOTES: Effective date— RCW 24.03A.185 Restricted gifts. (1) This section distinguishes between: (a) Enforceable trusts held by a nonprofit corporation, including a charitable corporation, governed under chapter 11.110 RCW; and (b) Gift restrictions whose terms may be enforced and are subject to modification under this chapter or other applicable law. (2) A gift to a nonprofit corporation, including a charitable corporation, does not create a charitable trust unless: (a) The donor expresses an intent to create a charitable trust; and (b) The trustee, which may be a charitable corporation, agrees in the form of a record to act as trustee of that trust according to its terms. (3) Giving a gift to a nonprofit corporation, including a charitable corporation, that is: (a) Accepted by the corporation; (b) not in trust; and (c) subject to material restrictions or requirements contained in a gift instrument transfers complete ownership to the nonprofit corporation. The nonprofit corporation is bound by the material restrictions or requirements contained in the gift instrument. (4) A nonprofit corporation complies with a term contained in a gift instrument if the nonprofit corporation reasonably complies with all material restrictions or requirements contained in the term, or, when appropriate under the facts and circumstances, seeks modification in accordance with RCW 24.03A.190. (5) If the nonprofit corporation fails to comply with any material restriction or requirement contained in a gift instrument and fails to seek a modification in accordance with RCW 24.03A.190, then the attorney general may bring a proceeding to enforce the terms of the gift instrument. [ 2021 c 176 s 1502.] NOTES: Effective date— RCW 24.03A.190 Modification or release of gift restrictions. (1) A term of a gift instrument that binds a nonprofit corporation may be modified or released, in whole or in part: (a) If the donor consents in a record; (b) As set forth in subsection (2) of this section, if the term is unlawful, impracticable, impossible to achieve, or wasteful; (c) For gift instruments limiting the use of property to one or more charitable purposes, through a binding agreement executed by the nonprofit corporation, the attorney general, and other interested parties, and filed with or approved by the court in accordance with RCW 24.03A.195; (d) By approval of the court in accordance with RCW 24.03A.200; or (e) As provided by other applicable law including, but not limited to, chapter 24.55 RCW. (2) If a nonprofit corporation, including a charitable corporation, determines that a restriction contained in a gift instrument on the management, investment, or purpose of a gift is unlawful, impracticable, impossible to achieve, or wasteful, then the nonprofit corporation, sixty days after notification to the attorney general, may modify the restriction, in whole or part, if: (a) The gift subject to the restriction has a total value consistent with RCW 24.55.045(4)(a) or any successor provision; (b) More than twenty years have elapsed since the gift was given; and (c) The nonprofit corporation uses the gift in a manner consistent with any charitable purposes expressed in the gift instrument. (3) Application of RCW 24.03A.180 through 24.03A.205 to existing gifts: (a) Before January 1, 2023, RCW 24.03A.180 through 24.03A.205 apply to gifts existing on December 31, 2021, only if the nonprofit corporation's board elects to apply RCW 24.03A.180 through 24.03A.205 to existing gifts before January 1, 2023. (b) On or after January 1, 2023, RCW 24.03A.180 through 24.03A.205 apply to all gifts. (c) As applied to gifts existing on December 31, 2021, RCW 24.03A.180 through 24.03A.205 govern only decisions made or actions taken on or after January 1, 2023, except that in the case of a nonprofit corporation that makes the election under (a) of this subsection RCW 24.03A.180 through 24.03A.205 govern decisions made or actions taken on or after the date the nonprofit corporation elects to be covered by RCW 24.03A.180 through 24.03A.205. [ 2021 c 176 s 1503.] NOTES: Effective date— RCW 24.03A.195 Binding agreement to modify or release restrictions. (1) If a gift instrument limits the use of the gift to one or more charitable purposes, and the conditions set forth in subsection (3) or (4) of this section are satisfied, then the gift instrument may be modified by agreement of the nonprofit corporation, the attorney general, and all other interested parties. (2) For purposes of this section, an "interested party" does not include: (a) The donor; or (b) Any member of any charitable class that the gift would benefit, either before or after the modifications to be made by the agreement. (3) A restriction related to a gift's management or investment may be modified by an agreement described in subsection (1) of this section if: (a) Because of circumstances not anticipated by the donor, modification will further the charitable purpose of the gift; (b) Enforcement of the restriction has become impracticable or wasteful; or (c) Enforcement of the restriction impairs the management or investment of the gift. (4) A restriction on the use of a gift relating to the gift's charitable purpose, rather than its management or investment, may be modified by an agreement described in subsection (1) of this section if the purpose becomes unlawful, impracticable, impossible to achieve, or wasteful. (5) An agreement described in subsection (1) of this section must: (a) Be in writing and executed by all of the parties; (b) Be binding and conclusive on the nonprofit corporation and all other parties with a beneficial interest in the gift; (c) Identify the gift instrument and the term or terms of the gift instrument that it modifies; (d) Describe completely the modifications that it would make; (e) Set forth the reasons why the modifications would comply with subsection (3) or (4) of this section; and (f) State changes to the charitable purposes to which the use of the gift is limited, if any, resulting from the modifications. (6) The nonprofit corporation or its legal representative may file the executed agreement with the court within thirty days of the agreement's execution by all parties. Upon filing of the executed agreement with the court: (a) The agreement becomes effective and equivalent to a final court order binding on the nonprofit corporation and all other parties with a beneficial interest in the use of the gift; and (b) The modifications are deemed approved by the court, and have the same effect as if the court ordered them pursuant to RCW 24.03A.200. (7) The nonprofit corporation or its legal representative may, as an alternative to the procedure described in subsection (6) of this section, petition the court for a hearing for presentation of an agreement entered under this section to the court within twenty-one days of the agreement's execution by all parties. The nonprofit corporation shall (a) provide notice of the time and date of the hearing to each party to the agreement unless that party has waived notice in the form of a record, and (b) file proof of mailing or delivery of the notice or waiver with the court. At the hearing, the court shall review the agreement on behalf of all the parties. The court shall determine whether the agreement adequately represents and protects the interests of the parties and the public interest, and enter an order declaring its determination. If the court determines that the agreement does not adequately represent and protect those interests, then the agreement is void. [ 2021 c 176 s 1504.] NOTES: Effective date— RCW 24.03A.200 Judicial modification or release of restrictions. (1) Upon application by a corporation subject to a restriction related to a gift's management or investment, rather than to its charitable purpose, the court may modify the restriction if: (a) Because of circumstances not anticipated by the donor, modification will further the charitable purpose of the gift; (b) Enforcement of the restriction has become impracticable or wasteful; or (c) Enforcement of the restriction impairs the management or investment of the gift. (2) Upon application by a corporation subject to a restriction on the use of a gift relating to the charitable purpose of the gift, rather than its management or investment, the court may modify the restriction if the purpose becomes unlawful, impracticable, impossible to achieve, or wasteful. (3) If the gift instrument provides for a forfeiture or gift-over to an alternative beneficiary, then the court may modify one or more restrictions under the procedure set out in subsection (1) of this section if a management or investment provision fails. The court may not, however, modify any restriction under the procedure set out in subsection (2) of this section to defeat the interest of an alternate beneficiary unless the beneficiary would also be subject to, and unable to perform, the term requiring modification. The alternative beneficiary is entitled to notice and may participate in the determination of whether to grant modification. (4) Any modification made by the court must, to the extent possible, be made in a manner consistent w