Arizona C Corporation Formation
How it Works
Joshua C. Black
Arizona C Corporation Formation
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Why use UpCounsel to form an C Corporation in Arizona
Starting an C Corporation in Arizona with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our C Corporation attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for an C Corporation.
When forming an C Corporation in Arizona with UpCounsel, the attorney you choose to help you will conduct a business name search for your Arizona corporation and assist you in preparing your C Corporation Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Incorporation have been prepared and successfully filed with the Arizona Corporation Commission, your Arizona corporation has been formed and begins its existence as a Corporation entity.
Requirements for Forming a Arizona C Corporation
Choosing a Company Name for Your C Corporation
One of the first steps in the process of forming your CA C Corporation is to choose your business name.
The business name that you choose must contain "Association", "Company", "Corporation", "Limited", "Incorporated", or an abbreviation of one of these words in their name. It must be distinguishable (not the same as or deceptively similar to) the name of an S Corp or foreign C Corporation reserved or registered.
Your C Corporation name may contain the name of one or more members.
By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your Arizona S Corp before filing to see which names are available. Once you have chosen an available name, your chosen C Corporation attorney can help you properly register your name with the State of Arizona.
Articles of Incorporation: When forming an C Corporation in Arizona, the Articles of Incorporation must be filed with the Arizona Corporation Commission. Arizona state law requires that certain information be included in your Articles of Incorporation when forming your Arizona C Corporation.
This information mustinclude:
- The C-Corp's name and address.
- The C-Corp's duration.
- The C-Corp's registered agent's name, address, and signature (accepting the position).
- The C-Corp's members or managers' names and addresses.
- The C-Corp's duration (whether finite or infinite).
Publication: According to Arizona Law, you are required to publish a copy of the Articles of Incorporation within after it has been approved by the Arizona Corporation Commission. This must be published in a newspaper designated by the county clerk of the county in which the C Corporation office is located for three consecutive publications.
Certificate of Disclosure for Business Corporations: A Certificate of Disclosure for Business Corporations must be signed by the incorporator and submitted with the articles of incorporation. This document asks for information about criminal convictions, civil fraud actions, and prior corporate bankruptcies relating to any of the corporation's founders, as well as the corporation's fiscal year end.
Additionally, a Arizona C Corporation formation generally requires inclusion and/or consideration of the following:
C Corporation Operating Agreement: Although the C Corporation Operating Agreement is not required with the Articles of Incorporation, it is a good idea for every C Corporation with more than one member to have one. The Articles of Incorporation may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. Arizona recognizes operating agreements as governing documents.
Membership: A C Corporation must have one or more members.
Eligibility Requirements: A natural person or an entity.
Procedure for Membership: The member may acquire an interest in the C Corporation directly from the C Corporation at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Incorporation or the operating agreement or, if not provided, only upon the vote of a majority in interest of the C Corporation members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the C-Corp's operating agreement.
Business Licenses: Business licenses and/or permits are required for most C-Corp's offering specific professional services. Contact the Arizona State Corporations Commission for specific licenses.
Resident Agent needed for a Arizona C Corporation
Remember every Arizona C Corporation must have a registered agent in the state, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. The statutory agent must be an Arizona full-time resident or business entity registered with the Arizona Corporation Commission.
Arizona Corporation Commission
Once you create an C Corporation in Arizona, the Arizona Corporation Commission will require that certain recurring responsibilities and duties be fulfilled.
For further information, contact the Arizona Corporation Commission.
Recurring Responsibilities and Duties for Arizona C Corporations
Annual Report: Each C Corporation shall provide an annual report to the Arizona Corporation Commission regarding its financial condition to each of its members. The annual filing fee is $45.
Incorporator's Statement: A signed "Incorporator's Statement" showing the names and addresses of the initial directors who will serve on the board until the first annual meeting of shareholders.
Filing Fees for a Arizona C Corporation
The processing fee for the Articles of Incorporation is generally about $60 but may be expedited for additional fees. Also, the filing and reservation of the C-Corp's name is $50. These fees can change so it would be best to check with the Arizona Department of State on what the latest fees are. You may pay these fees in many different forms including cash, check, money orders, or debit and credit cards.
Taxes for a Arizona C Corporation
Arizona C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation.
It should be noted that shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as "double taxation".
Arizona state law follows federal law for income tax purposes. Therefore if a corporation is classified as an association taxable as a C Corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.
Federal Income Tax: For federal income tax purposes, a C- Corp is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.
Arizona State Income Tax: Arizona corporations are subject to Arizona's corporate income tax at a rate of 6.968%.
Federal Tax Identification Number: Your corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). You do not need to get a new EIN after the corporation choose to become a C Corporation An EIN is similar to an individual's social security number. You will need an EIN for your C Corporation as long as there is one member, even if the C Corporation does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.
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