The mechanics involved to incorporate in Arizona go beyond the ministerial tasks of filling out a form.
Arizona incorporation starts with registering Articles with the ACC followed by publication in an approved newspaper, but incorporating goes beyond these simple steps.
Filing documents is only the beginning when you incorporate in Arizona. This page explains what to know about incorporation procedure as well as ongoing formalities applicable to preserving the company's structure. It is important to understand that corporate structure is dependent on following certain rules.
Choosing a Business Name
The first step to incorporate is choosing a name for your company and checking it for availability. The name cannot already be in use. A search for business name availability should be conducted before preparing your documents. This can be checked at the ACC Starpass database here. There is also information on how to search accurately.
Filing Articles of Incorporation (Articles)
A minimum of one person (an incorporator) files Articles and Certificate of Disclosure at the ACC office. A cover sheet and filing fee will accompany the registration.
Arizona Articles provide very basic information including:
The incorporator signs the Articles, and the statutory agent signs an acceptance of the appointment. Sample, albeit rudimentary Articles and a checklist are found online at the ACC's website.
A cover sheet is filed with the documents and is a very simple form used for administrative purposes by the ACC for routing purposes.
A Certificate of Disclosure is included with the application. The certificate is a one-page document that includes information as to whether any person serving as an officer, director or shareholder has been convicted of certain felonies.
Approval by Commission
The Commission will review the documents, and issue an approval or rejection notice. The approval is usually issued in about five to seven business days. If the documents are rejected, written notice is given stating the reasons. Usually, this would be due to a clerical error or choosing a name which the clerk determines to be too similar to another company's.
Publication of Notice
After receiving the approval, notice will need to be published in an accepted newspaper. Publication must occur within 60 days of incorporating, and an Affidavit of Publication is to be submitted to the ACC within 90 days of incorporation. Fees to publicize will obviously vary by newspaper, county, and the length of the document ($95 to $155 is the norm, if you incorporate in Maricopa County). Here is a list of newspapers where notice can appear.
Maintenance of the Corporation
The acts of incorporating, obtaining approval and submitting the Publication Affidavit have effectively created the company. However, while it is now legally formed, its structure will require maintenance. There is a difference between simply filing documents and incorporating in Arizona.
Setting up a corporation so it will comply with legal criteria will involve adopting bylaws, appointing directors, issuing stock, and adopting resolutions.
Preparing and Adopting Bylaws
Arizona bylaws normally include provisions patterned after the statutes, and set rules regarding voting rights, notice rights, and other operational issues. Bylaws designate the number of Directors to sit on the Board. In general, bylaws "may contain any provision for managing the business and regulating the affairs of a corporation that is not inconsistent with law or the articles of incorporation" (See ARS 10-206).
The bylaws should be prepared at this juncture in order that the directors can formally adopt them at their first meeting. We prepare this document for you so it can be approved at that time.
Organizational Meeting of Directors
A Meeting of the Board of Directors is held to elect officers, authorize issuance of stock, adopt bylaws and other matters such as opening business bank accounts. Minutes of the organizational meeting should be prepared and kept in the records file. The Minutes should be signed by the Secretary in order to certify the document's authenticity.
The purpose of this is to "to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting." (See ARS 10-205.)
This can be avoided by having all directors sign a "Consent Action". Consent Actions are becoming the norm in operating smaller businesses that incorporate. Provided the entire board is in agreement to an action, it can be approved by each director signing a Consent Action or Resolution.
Consent actions are expressly authorized under state law, but Articles can override this provision of law, and mandate that meetings be held.
Following Rules and Formalities
After incorporating, it is necessary in Arizona to follow certain formalities to maintain the entity. Disregarding these rules can result in exposure of owners' assets to claims. Knowing how to comply with these formalities is crucial to preserving corporate structure.
Maintaining Corporate Records
A Corporate Minute Book needs to be maintained on an ongoing basis. Certain records must be kept, which include:
Filing Annual Reports
Annual reports are submitted to the ACC to maintain good standing (See ARS 10-701). Annual reports disclose the names and addresses and any changes to the officers, directors and shareholders. Filing these reports on a timely basis is important to avoid administrative dissolution by the ACC (i.e., revocation of charter).
A Federal Tax Identification Number for the company (also called an EIN) is obtained from the IRS for taxation purposes by filing Form SS-4. Since Corporations are non-disregarded entities for tax purposes, they must file tax returns.
Conclusion
This concludes the overview of incorporating in Arizona, and has emphasized main factors about the incorporation process.
You can learn about our services and costs to incorporate. Or, to research laws, refer to the Arizona Corporations Code. To begin incorporating now, please go to the Arizona Incorporation Questionnaire where you will be given the option to receive discounts when ordering online.
