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If you’re starting a corporation in Arizona, the process can seem daunting at first glance. However, it’s actually not that difficult to form a corporation–even for first-time entrepreneurs. The key is knowing what steps to take and which documents to submit at each stage of the process. Read on for our guide to forming a C corporation in Arizona so that you can get started on your way to becoming an entrepreneur!
You have to decide on the legal structure that best suits your needs. You have three options: S corporations, C corporations and LLCs. Choosing which one is right for you depends on your goals, preferences and personality type. Because of the tax implications, though, we recommend that most business owners go with a corporation (S or C) rather than an LLC or sole proprietorship.
Here’s what each option looks like:
Sole Proprietor – This is the easiest type of business to set up because it doesn’t require any paperwork; simply start your business and operate under this name! However, because it isn’t legally recognized as a separate entity from its owner(s), it must file as a regular non-incorporated entity on tax returns. This means profits are taxed twice–once at the corporate level and then again when received by individual owners–which can make things complicated when filing taxes each year if you’re not careful about keeping track of all of your income sources separately from one another throughout each quarter/monthly period throughout those years.*
LLC – An LLC offers limited liability protection but requires more formalities than other types of businesses do in order to ensure its protection under state law against lawsuits brought against them due to negligence or other reasons associated with day-to-day operations within their organization structure itself (like failing to maintain adequate insurance policies). These include annual meetings where members can vote out one another if needed; holding meetings every few months instead of annually so everyone knows exactly what’s going on inside their company at all times without having too much power concentrated into one person’s hands (which could lead towards corruption); making sure there’s documentation kept up with everything done during these meetings so nothing falls through cracks later down road should someone want access
Choose a name for your corporation. The name must contain the words “Corporation,” “Incorporated,” or the abbreviation “Corp.,” “Inc.,” or “Ltd.” Also, do not choose a name that is too similar to other names already in use in Arizona (this can be done by checking the business names database). The first word in your corporate name should be distinct from other words in it. When choosing a name, consider making it easy to pronounce and spell so that clients can easily find you online should they need to refer someone else to you at some point down the line. Lastly, make sure it is not overly long: no more than 40 characters including spaces! If a longer name is absolutely necessary due to marketing purposes—and if this won’t cause any confusion among customers—you may include an acronym at the end of your corporation’s full legal title (e.g., ABC Corp.).
The Articles of Incorporation are the official documents that your C Corporation is formed by. They must be filed with the Arizona Corporation Commission Office and include information about your company, such as its name, address, organization type (C corporation), etc.
If you’re filing a new corporation in Arizona, you can download an Articles of Incorporation form from their website or order one by mail. The cost of filing the articles depends on the number of shareholders your company has: if you have only one shareholder then it costs $30; if there are two or more shareholders then it will cost around $50 per person. You can pay this fee online using a credit card or check via PayPal; otherwise send payment with a check to P.O. Box 29642 in Phoenix AZ 85002-9642
You will need to develop and adopt corporate bylaws. A corporation’s bylaws are the internal rules of governance. They specify how the corporation should be run, including by who, when, and why. For example, you can include a provision for voting rights depending on how much stock each shareholder owns. You may also want to include a provision for how often meetings should occur (e.g., quarterly).
Creating a set of corporate bylaws typically involves:
The C Corporation: Issue stock to shareholders.
In order for a corporation to issue stock, it must first hold a vote of the membership (shareholders) and elect directors who will represent the interests of all shareholders. Then, the corporation can issue shares according to its charter document (or articles of incorporation). If you’re thinking about issuing common or preferred shares in your C-Corp, make sure you understand how each type works before deciding which one makes sense for your company.
Common stock is considered ordinary equity — meaning that it carries no special rights or privileges over any other shareholder’s interest in the firm. In exchange for their investment in common stock, investors are entitled only to their proportionate share of profits generated by their investments (after paying all expenses). They also receive voting rights proportional with their ownership stake in any given firm.
The board of directors is responsible for making sure your corporation runs smoothly. They are the people you trust to make decisions, like hiring or firing employees, purchasing new equipment, or even deciding on a new company logo. The number of board members depends on your corporation’s size:
You’ll need to obtain any required local licenses or permits, as well as the state and federal licenses and permits. You may also have other requirements depending on your industry. For example, if your business is in healthcare or food service, you will be subject to additional regulations. By law, all employees of C corporations must receive workers’ compensation coverage unless they are exempt from this requirement under law (for example, owners of an LLC).
If you’ve done everything right up until now and still haven’t obtained any required licenses or permits before you file your articles of incorporation with the Arizona Corporation Commission (ACC), there’s a chance that the ACC will cancel your articles of incorporation for failing to obtain them first. In addition to complying with state rules about getting licensed before incorporating, it’s important not just because it can cost more money later but also because having an unlicensed corporation on file with government agencies like the Internal Revenue Service may lead them into thinking that either you’ve been negligent in filing properly or worse yet: intentionally trying fraudulently avoid paying taxes on profits from sales made within their jurisdiction!
The takeaway from this section is that forming a C corporation in Arizona is not as simple as it sounds, but it can be done if you follow the right steps and make sure to fill out all of the required paperwork correctly. This can help ensure that your company stays in compliance with Arizona law and allows you to avoid costly fines and penalties down the line.
If you have any questions about forming your own C Corporation or would like help getting started, contact us today!
After completing these steps and filing the necessary documents, you’ll be ready to begin doing business as a C corporation in Arizona. If you have any questions along the way, don’t hesitate to contact an attorney or accountant who is knowledgeable about corporate law.
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