On This Day: Microsoft Becomes a Legal Entity, Bill Gates Named President, Marking a New Era in Tech
On this day in history —June 25, 1981 — the tech world marked a pivotal milestone: the formal incorporation of Microsoft as a legal entity in the state of Washington. The move marked a critical transformation for the company founded six years prior by Bill Gates and Paul Allen, who launched their venture on April 4, 1975, as a modest startup focused on developing BASIC language interpreters.
Originally operating informally out of Albuquerque, New Mexico, Microsoft had relocated to Bellevue, Washington, by early 1979. But it was on June 25, 1981, that the company’s founders restructured it into a privately held corporation, with Gates appointed as president and chairman of the board, and Allen named executive vice president.
The timing proved prescient. Just weeks later, on August 12, 1981, IBM would unveil its first personal computer—a watershed moment in the evolution of computing. Microsoft had already inked a deal with IBM in November 1980 to supply the operating system for the new machine. To fulfill that agreement, Microsoft acquired the rights to QDOS from Seattle Computer Products and transformed it into MS-DOS.
The reorganization and formal incorporation not only set the legal and corporate framework for Microsoft’s explosive growth, but also laid the foundation for its dominance in the operating systems market. MS-DOS would debut as the operating system of choice for the IBM PC, cementing Microsoft’s role as a central player in personal computing. Alongside MS-DOS, the company continued to build out its suite of programming languages, including BASIC, COBOL, and Pascal.
By the end of 1981, Microsoft had grown to 128 employees and had posted revenues of $16 million—a dramatic leap from the $2.5 million reported just two years earlier. The company’s decision to incorporate formally would ultimately pave the way for its 1986 IPO and its ascent to the top tier of global technology firms.
