The House Civil Rights & Judiciary Committee heard Senate Bill 5,006 on March 14, a statutory cleanup and modernization package that would revise multiple provisions of the Washington Business Corporations Act.

Committee staff explained the bill incorporates recommendations from the Corporate Act Revision Committee of the Washington State Bar and makes changes across several topics: committees of the board of directors, share options, share exchanges, dissenter’s rights, and the voting threshold for voluntary dissolution for new corporations.

Staff explained the bill would allow a board committee to be composed of one or more directors, remove several statutory prohibitions on committee authority, and permit the appointment of alternate committee members to replace absent or disqualified members. The bill also would clarify that rights/options/warrants may be issued for “other securities” of the corporation, clarify who is entitled to rights in a share exchange, add conversion to the list of transactions that trigger dissenter’s rights, and lower the default shareholder approval threshold for voluntary dissolution for corporations formed after 08/01/2024 to a majority unless the articles/bylaws specify a greater vote.

Senator Jamie Peterson, prime sponsor, told the committee the changes are largely technical updates recommended by the CARC and intended to keep Washington corporate law competitive with national reforms and with the Model Business Corporations Act. “The headline change in this bill is the change to allow committees of one,” Peterson said, adding the change addresses situations when only a single disinterested director may serve on a committee.

Michael Hutchings, chair of the Corporate Act Revision Committee, described the committee’s work and said the update is intended to keep Washington’s statute current with developments in Delaware and the ABA model act while tailoring changes to local needs.

Committee members asked about the dissolution threshold change and whether the bill is a cleanup of last session’s amendments. Hutchings and Peterson said last year’s code revision changed many thresholds to majority but omitted voluntary dissolution; this bill completes that change for corporations formed after the stated effective date while grandfathering older corporations.

No formal action or vote occurred at the hearing; staff and proponents indicated a work session would be useful to address implementation details.

Ending: Sponsors said the bill is technical and intended to aid Washington businesses and corporate governance practice; the committee may schedule a work session for further review.