Step 1) Verify & Secure Brand Name
The first step in starting an Arizona corporation is choosing a quality business name. Your business name needs to be memorable and relevant for branding’s sake, and meet all of the criteria below for legal purposes:
- Doesn’t contain the word “bank”, “credit union”, “deposit”, “savings association”, “building association”, “thrift”, or “trust”, unless you’ve gotten approval from the Arizona Department of Financial Institutions.
- Contains an appropriate entity identifier. Acceptable corporation identifiers in Arizona are “association”, “company”, “corporation”, “limited”, or “incorporated” (or an abbreviation of any of these).
- Is distinguishable from any other entity or trade name registered in the state. Find out how to ensure your name is distinguishable and see other Arizona business name requirements here.
Naming your Arizona corporation is the first real act of branding you’ll do, so don’t phone it in. Put in the time to come up with a name that captures your mission and will attract your target audience.
What To Do:
To find out whether or not your desired name is available, do a business name search through the AZ Corporation Commission website. If it’s already in use, take the necessary measures to make it distinguishable, or consider brainstorming other ideas.
Once you’ve settled on a name, you have the option to reserve it for a $10.00 fee. If for some reason you’re going to have to wait awhile to file your Articles of Incorporation, reserving your name might be a good idea -- but it’s not a requirement in Arizona.
Lastly, head over to GoDaddy and search for a decent domain name for your business. Even if you’re not planning on starting a website right away, it’s a good idea to purchase a URL ahead of time if you find one that’ll make it easy for folks to find you.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Appoint An Arizona Statutory Agent
Every corporation in Arizona is required to appoint a statutory agent, or registered agent, to represent their company. They may be a resident of Arizona or a company that’s authorized to do business in the state. A statutory agent’s job is to accept service of process notices, tax forms, and other legal documents on behalf of your business.
Arizona doesn’t prevent business owners or members of the board from serving as a corporation’s statutory agent, but hiring a professional is the best choice for most businesses. If you choose to serve as your own statutory agent, you’ll:
- Have to maintain normal business hours at your Arizona home or business address
- Be required to publically link your home address to your corporation (if you do your work from home)
- Be totally responsible for opening and responding to all important notices on time
- Risk being served in front of clients, family or friends
Keep in mind that you cannot list your own corporation as the statutory agent -- if you choose to appoint yourself or someone else in the company, you’ll need to provide their personal information.
What To Do:
If you’re considering acting as your own statutory agent, read through our guide to get a better idea of what duties it entails. (Remember, statutory agents and registered agents are one and the same.) Otherwise, our top choice for professional statutory agent services is IncFile — they include a full year free when you incorporate your business with them, even in their $49 package.
Step 3) File Articles Of Incorporation & Certificate of Disclosure
Unless you’ve yet to decide on directors and incorporators, you should be all set to officially form a corporation in Arizona!
In Arizona, this requires filing Articles of Incorporation and a few supplementary documents with the AZ Corporation Commission. Your Articles of Incorporation will ask for:
- Your entity name and known place of business address
- A description of the business’ “character” (the primary activity you intend to conduct)
- The class and number of shares your corporation is authorized to issue
- The name and business address of your director(s) (minimum one, as outlined in statute 10-803)
- Your statutory agent’s name and street address, and a completed Statutory Agent Acceptance Form.
- The name and signature of the incorporator(s)
- A $60.00 nonrefundable filing fee
Along with the Articles of Incorporation and Statutory Agent Acceptance Form, you’re also required to submit an Initial Certificate of Disclosure.
This document asks if any central member of your corporation (officer, director, trustee, incorporator, etc.) has ever been convicted of certain types of felonies, or involved in another corporation that went bankrupt. If you answer “yes” to any of the questions on this form, you’ll have to fill out a Certificate of Disclosure Felony/Judgment Attachment or Disclosure Bankruptcy Attachment, too.
Keep in mind that the only document that actually costs to file is the Articles of Incorporation. Every additional document is free, and everything must be submitted simultaneously.
What To Do:
If you want to take care of all of this independently, fill out all the documents above with incredible attention to detail and send them in a bundle to the following address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007
Keep in mind that Arizona doesn’t currently offer online filing for corporations.
You’re not legally required to get professional help on this step, but it’s our belief that every new Arizona corporation should. Consulting with a lawyer or getting help from an online incorporation service are both viable ways to ensure your Articles of Incorporation and other documents are completed properly. However, for most corporations we prefer online incorporation services because they’re cheaper and often just as efficient.
Step 4) Obtain EIN
Now that you’re well on your way to being an official Arizona corporation, it’s time to apply for an EIN, or Employer Identification Number.
An EIN is the federal government’s way of tracking a business’ financial activity — it’s essentially a corporate social security number, and every corporation is required to have one.
You can put this step off until a bit later if you wish, but you definitely need to get it taken care of before opening a business bank account. You have to provide the corporation’s EIN in lieu of your personal social security number to open a business bank account, and it may be requested on an array of other forms, too. So, just in case, we recommend applying sooner rather than later.
What To Do:
Believe it or not, this step isn’t complicated. The easiest way to obtain your EIN is through the IRS online application. This method is totally free and very efficient — you’ll get your EIN as soon as you’re through filling out the application. However, you can also get an EIN for free via phone, fax or mail — we discuss each of these approaches in greater depth throughout our EIN guide.
Step 5) Conduct Organizational Meeting
Your organizational meeting the very first official meeting you’ll have with your board of directors. It’s when you’ll all sit down and:
- Flesh out everyone’s role
- Discuss and adopt corporate bylaws
- Issue shares of stock
- Appoint corporate officers
- Write a banking resolution
- Record your first meeting minutes
Again, Arizona only requires you to have one director on your board, so this meeting could look very different depending on the management structure of your corporation. But regardless, it’s important to take care of everything above, focusing particular energy on the corporate bylaws.
Your bylaws will serve as the governing document for your business now and in the future, so it’s important to be thorough and make sure they’ll guide your corporation in the right direction. Arizona legally requires corporations to draft written bylaws, although you won’t file them with the state.
What To Do:
To make sure you all go into this vital meeting totally prepared, you’d be wise to do some more research beforehand. Scroll through the Arizona corporation statutes if you’re in need of insight on any particular area of confusion. It may even be a good idea to have these handy while you’re conducting your meeting!
Online templates can also be incredibly helpful at this time. If you’re not sure what to include in your bylaws or how to record meeting minutes, check out our favorite meeting minute and bylaw templates for some guidance.
Step 6) Start A Corporate Records Book
Now’s a great time to start a corporate records book. You’ve already accumulated a whole lot of important documents, like your:
- Articles of Incorporation
- Banking resolution
- Corporate bylaws
- Meeting minutes
- Permits and licenses (See Step 8)
…and they’re just going to keep rolling in. You need a handy place to keep all of this stuff, and that’s what a corporate records book is for. This might be as simple as a binder, or as fancy as a customized corporate kit -- the main point is to keep all of your legal records in order.
That said, we are huge fans of corporate kits. These often come with custom seals, stock certificates, and other unique pieces to demonstrate the legitimacy of your business. However, a corporate kit is by no means required.
What To Do:
If you’re considering working with an online filing provider, it’s worth checking out their rates for corporate kits. Depending on the package you’re getting, it may even be included automatically. On the other hand, if you’re looking for something more basic, you can always head over to a local office supply store for a binder that’ll do the trick.
Step 7) Open A Business Bank Account
You’re ready to open up a business bank account. This is such an important step — no corporation should be run out of someone’s account.
You’ll use your EIN (not your personal social security number) to open up a bank account for your corporation, so it’ll be completely separate from your own finances. Having a business bank account will help you protect your personal assets and keep all your expenses nice and tidy so you’ll be prepared for tax time.
Ideally you’ll have already decided on a bank during your first board meeting, keeping the following features in mind:
- Customer service
- National ATM accessibility
- Online features
- Fee structures
- Business incentives
These criteria and more are important to consider when you’re choosing a bank. What are your business’ priorities?
What To Do:
Local and national banks both have their perks, so we recommend doing some research on both. Bank of Arizona and OneAZ Credit Union, for example, may have a greater level of customer service, but perhaps they don’t have as sophisticated websites/apps. On the other hand, some national banks may be just the opposite.
Make some calls, read some reviews and chat with some representatives to find out which will best suit your corporation’s needs. To get you started on your research, read our reviews of Chase and Bank of America — our two favorite national banks that operate in Arizona.
Once you’ve got your bank account set up, sync it with an accounting software as soon as possible. This is essential for all businesses, but even more so for startups that aren’t working with accountants yet.
Step 8) Handle Licensing & Tax Obligations
The final piece of red tape you’ve got to tackle is acquiring any special permits and licenses required of your corporation.
Arizona doesn’t issue general business licenses, so depending on the nature of your business you may not need to obtain any license at all. Regardless, it’s important to check out federal, state and local government websites to make sure you’re totally compliant. Here are the best resources we found:
- Federal: Scroll through this page on the Small Business Association website to see if your business type calls for any particular license. If it does, you’ll be directed you to the corresponding federal agency. Their article on small business taxes is also helpful, although you'll want to consult the IRS website for more detailed information.
- State: The Arizona Department of Commerce website has a super handy interactive licensing checklist to help folks like you figure out if you need to apply for any licenses with the state. The Department of Revenue also put out a very helpful guide to Arizona business taxes, which is well-worth a read.
- Local: Your local Chamber of Commerce will be able to inform you of any other special requirements based on your city or county.
Even if you’re not dealing with highly monitored goods or activities, you really ought to check out these resources to be sure you’re not missing anything — don’t just assume you’re in the clear!
What To Do:
Click your way over to the websites we listed above to find out if your corporation needs to apply for any licenses or permits.
Alternatively, if you’re quite certain that you’re obligated to apply for federal, state and local licenses due to your business’ activity, you might be interested in using a business license research service instead. These companies will do all the research on your behalf and send you the applications in a bundle!
Need Help Incorporating?
Starting a corporation in Arizona isn’t a task for the faint of heart. Not every entrepreneur has the ability to be the business’ visionary and legal guru simultaneously.
This is why we believe so strongly in leveraging the help of professional services along the way. We’ve discussed quite a few throughout this guide, but here are the three most popular:
– IncFile ($49 + state fees) = Best Price & Overall Value
– LegalZoom ($149 + state fees) = Most Popular Service
– Harbor Compliance ($499 + state fees) = Better Customer Service