If you are looking to form a business entity in the state of Arizona, you have a variety of different options to choose from.
The Secretary of State handles registrations of LLCs, limited liability partnerships, limited partnerships, foreign limited partnerships, as well as all other non-incorporated entities. The Arizona Corporation Commission (ACC), on the other hand, regulates the incorporation of businesses, as well as the adoption of rules, and any decisions regarding contested matters.
But before you take the step of filing your paperwork with the applicable agency, you need to consider which type of entity will be best suited for your needs during the formation process. Because each option has its pros and cons regarding tax, debt, and legal liability, as well as asset protection for the business, receiving guidance from your trusted business attorney is the best way to ensure you select the business entity that benefits you the most.
Quick Guide: Arizona Business Entity Formation
Below, we outline corporations in part one of our Quick Guide series on Arizona business entity formation.
Part 1: Corporations
All corporations: According to the Arizona Revised Statutes (see A.R.S. §§ 10-401, 10-1506, 10-3401, and 10-11506), if a corporation’s desired name contains a number of words, such as Bank; Credit Union; Trust; and Savings and Loan Association, written permission must be obtained from the Arizona Department of Financial Institutions prior to registration.
For-profit corporations: According to the minimum for-profit corporation requirements outlined in A.R.S. §§ 10- 401 and/or 10-1506, the fictitious name of a for-profit foreign corporation, or the name of a for-profit corporation, has to include one of the following words, or an abbreviated version of one of those words: Association; Company; Corporation; Bank; Limited; or Incorporated. In addition, the name should not include any of the following words or their abbreviations: Limited liability company; LLC; L.L.C.; Limited company; LC; L.C.
Nonprofit corporations: To qualify as a nonprofit corporation, one must satisfy the name requirements of the Arizona statutes (see A.R.S. §§ 10-3401, 10-3301, and/or 10-11506) and not conflict with any of the requirements of professional corporations (see below) or all other corporations (see A.R.S. §§ 10-1506 and 10-401). In certain cases, such as when forming a cooperative (nonprofit corporation under Chapter 19 of Title 10), other requirements may apply as well.
Professional corporations: Under Arizona law, a professional corporation’s name is not to conflict with any of the previously outlined words for corporations (see A.R.S. § 10-2215), and must contain one of the following words or its abbreviations: Professional corporation; P.C.; Professional association; P.A.; Service corporation; S.C.; Limited; Ltd; Chartered; or Chtd.
For reference, all Statutes mentioned above are outlined in the Arizona Revised Statutes and available for review on the Arizona Legislature’s website at www.azleg.gov. We know choosing the correct business entity can seem like an impossibility at this stage of the process. We are here to help. If you think a corporation is the right business entity for you, or you would like to learn more about the other options, as well as the business formation process, contact our business law team today.