What is the process for declaring corporate splits?
A corporate split is when a company divides itself into two or more separate entities. In Washington, the process for declaring a corporate split is regulated by the Washington Business Corporation Act. First, the parent company must create a plan of reorganization that includes information about the new business entities resulting from the split. This plan has to be approved by both the shareholders and the board of directors. Once the plan is approved, the parent company must submit a statement to the Washington Secretary of State with the details of the split. Once the statement is filed, the parent company must give public notice to its stakeholders of the reorganization. This notice must be published in a newspaper of general circulation in the county where the parent company has its principal place of business. The period of notice must be at least 10 days. After the public notice has been given, the parent company must file an amendment to its articles of incorporation with the Washington Secretary of State. This amendment includes all the necessary details of the corporate split, such as the new names of the companies, all issued shares, and the addresses of the new businesses. The amendment also includes a statement of acceptance from the shareholders of the parent company. Once all the documents are filed and accepted, the corporate split is complete and the new companies can begin operations.
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