Corporate Sale of Substantially All Assets Approval Requirements in Washington

At a glance

Requirements one by one

The 25% safe harbor is not a reverse presumption

RCW 23B.12.020(1)-(4) requires shareholder approval when a nonexempt outside- course disposition would leave no significant continuing business activity. Retaining at least 25% of consolidated assets and 25% of either consolidated pretax continuing income or continuing revenue is conclusively significant.

Missing either percentage creates no presumption that significant activity is absent. The board may use reasonable accounting statements or, for assets, fair valuation or another reasonable method. Subsidiary assets count as parent assets, and the statute gives no separate investment-holding rule.

The board can create an otherwise unavailable approval group

Section 23B.12.020(5)-(6) requires board approval, submission, and a recommendation unless conflict, special circumstances, or RCW 23B.08.245 applies; the board then gives its basis. It may condition submission on any basis, including approval by a specified percentage of a holder group that otherwise has no separate vote.

That conditional vote does not itself amend the articles or decide fairness, fiduciary duties, or agreement rights.

Every shareholder receives material terms and consideration

Section 23B.12.020(7) gives meeting notice to every shareholder, voting or not, states the disposition as a purpose, and describes material terms, conditions, and consideration. RCW 23B.07.050(1) requires the notice 20 to 60 days before the meeting.

The statute does not prescribe a separate statutory agreement, signer, or public filing for the asset disposition.

Formation date selects the default vote

For a corporation formed before August 1, 2024, § 23B.12.020(8) defaults to two-thirds of all votes entitled plus two-thirds of each article-based separate group. The articles or board condition may vary the vote; an articles reduction cannot fall below a majority of all entitled votes in each group.

For a corporation formed on or after that date, the default is a majority of all votes entitled in the overall and each article-based group, unless the articles or board require more.

Ordinary course, encumbrance, creditor control, and subsidiaries are express

RCW 23B.12.010 removes the holder vote, unless the articles provide otherwise, for ordinary-course disposition, any listed encumbrance, and a board-approved assignment for creditors or general receivership. Section 23B.12.020(11) separately exempts a parent transfer to direct or indirect wholly owned subsidiaries unless the articles require approval.

A distribution follows RCW 23B.06.400 instead. Section 23B.12.020 states no general dissolution exception, although the dissent statute expressly contemplates a disposition in dissolution.

Abandonment preserves other parties' contract rights

After approval and before consummation, § 23B.12.020(9) lets the board abandon without another shareholder action. The power remains subject to other parties' contractual rights and does not decide termination, fees, damages, title, tax, lien, or regulatory records.

Voting holders generally have dissent rights

RCW 23B.13.020(1)(c), (2)-(3) gives a voting holder dissent and fair-value payment rights when an outside-course all-or-substantially-all disposition becomes effective, including a disposition in dissolution. It excludes a court- ordered disposition and a cash plan distributing substantially all net proceeds within one year.

The statute preserves procedure and fraud challenges and ends the payment right on abandonment, rescission, permanent injunction/set-aside, or a demand withdrawal accepted in writing. This page identifies eligibility without administering appraisal.

What trips people up

• Missing 25% does not prove the trigger. Washington expressly rejects that reverse inference.
• August 1, 2024 changes the default vote. The older corporation starts at two-thirds; the later corporation starts at majority.
• A board condition can add a special approval group. That group need not already hold a separate statutory or article vote.

Common questions

Does mortgaging all assets require shareholder approval?

Not under RCW 23B.12.010's default. The articles may require it.

May the board abandon after approval?

Yes before consummation, subject to other parties' contractual rights.

Does Washington require an asset-sale filing?

Chapter 23B.12 RCW states no ordinary asset-sale filing. Other title, dissolution, tax, lien, license, or industry rules may require separate records.

Statutes and sources

• RCW 23B.12.010 and 23B.12.020. The quoted current text supplies the 25% test, no-reverse-presumption rule, board/holder procedure, notice, formation- date vote, exclusions, subsidiaries, distribution boundary, and abandonment. Official § 23B.12.010 and official § 23B.12.020 (accessed September 5, 2026).
• RCW 23B.07.050. The quoted current text supplies the 20-to-60-day meeting notice. Official current text (accessed September 5, 2026).
• RCW 23B.13.020. The quoted current text supplies dissent eligibility, exclusions, challenge savings, and termination events. Official current text (accessed September 5, 2026).