Fitzgibbons Law Offices - Pinal County Lawyers

520-426-3824

 
 
 
Tina Vannucci, Casa Grande Business Attorney

 

Fitzgibbons Law Offices
1115 E. Cottonwood Lane
Suite 150
Casa Grande, AZ 85122

 

Business Law

June 2015

Business Entity Formation in Arizona

Choosing which type of legal entity to form is one of the most important decisions to make when starting a business.

Arizona law provides for a variety of business entity options, and each works differently to protect certain assets and determine tax, debt, and legal liability.

Among the types of business entities available in Arizona are:

•  corporations

•  non-profit corporations

•  limited liability companies (LLCs)

•  limited liability partnerships (LLPs)

•  limited liability limited partnerships (LLLPs)

•  professional limited liability companies (PLLCs)

•  professional limited companies (PLCs)

•  joint ventures

•  sole proprietorships.

In Arizona, the Secretary of State provides the registration of LLCs, limited partnerships, foreign limited partnerships, limited liability partnerships and other non-incorporated entities. The Arizona Corporation Commission (ACC) regulates the incorporation of businesses, adopts rules, and makes decisions in contested matters.

From what we see in our practice, the most popular choice is currently the limited liability company. However, corporations and limited partnerships are also common choices. There are benefits and disadvantages of each type of entity that should be reviewed with an experienced business attorney.

Limited Liability Companies

The rules and regulations regarding the formation and maintenance of an Arizona LLC are set forth in Title 29 of the Arizona Revised Statutes. In order to form an Arizona LLC or PLLC, Articles of Organization must be approved by the ACC, followed by publication in an approved newspaper. The Articles provide basic information including a name for the LLC, a statement of its purpose, location of a registered office, information regarding a statutory agent, a date of dissolution, a statement indicating whether it will be member-managed or manager–managed, and addresses of certain managers or members.

Maintaining an LLC in Arizona is relatively easy, but formalities include filing Articles of Amendment when necessary and securing necessary licenses from federal, state and local jurisdictions. Members may also consider entering into an Operating Agreement regarding the operation and management of the business. An Arizona LLC will continue to exist until voluntarily dissolved by its members or involuntarily dissolved by the ACC or an Arizona court.

Corporations

The rules and regulations regarding the formation and maintenance of an Arizona corporation are set forth in Title 10 of the Arizona Revised Statutes. In order to form an Arizona corporation or non-profit corporation, Articles of Incorporation and a disclosure statement must be approved by the ACC, followed by publication in an approved newspaper. The Articles provide basic information, including a unique name for the corporation, a statement of the corporation’s purpose, its place of business, information regarding shares, board members, incorporators and a statutory agent.

In general, after formation, directors and officers are appointed, bylaws are entered into, stock may be issued, annual and special meetings are held, and annual reports must be filed. A corporation will continue to exist until it is voluntarily dissolved by the shareholders or board of directors, or involuntarily dissolved by the ACC or an Arizona court.

Partnerships

Whether you intend to form a partnership or file documents to that effect, a general partnership is formed whenever two or more people associate to run a for-profit business.

General partnerships are not commonly used, because each partner may be held liable for the acts of any other partner. To reduce the liability of the partners, a limited liability partnership (LLP) may be formed, combining some of the liability protections of a corporation or LLC with the ease of a partnership.

To form a limited liability partnership, you must file a statement of qualification with the Secretary of State setting forth a unique name for the partnership, the address of the business office, and information for the agent for service of process.

Related articles: Forming a Corporation | Forming a Partnership | Forming a Limited Liability Company

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