A corporation is a business entity that is “independent” from its share holders and is generally given all of the rights and protections of a person. In order to establish a “for profit” corporation, articles of incorporation must be filed with the Arizona Corporation Commission. The articles of incorporation must be published in a newspaper of general circulation and an affidavit of the publication must be filed with the Arizona Corporation Commission.
The Arizona Corporation Commission will need to approve your name and, if you desire, you can do a preliminary name search on the Arizona Corporation Commission’s website to determine if it’s available. You also need to select the corporation’s statutory agent who is also located in the State of Arizona for purposes of receiving information from the corporation commission and to be served with legal process. You must also file an initial certificate of disclosure of all incorporators.
After a corporation is established, the board of directors will need to be appointed and adopt bylaws for the corporation. The bylaws establish the corporate structure for purposes of managing the corporation. There must be an organizational board of directors meetings which will adopt the bylaws and appoint officers. These meetings must be documented by corporate minutes.
Corporate shareholders are the owners of the corporation and initial and annual shareholder meetings will need to take place. These meetings must be reflected in the preparation of minutes of all such meetings. Initially, stock certificates will be issues to all shareholders and the corporation must obtain State and Federal tax identification numbers.
It is important that if you have several shareholders that a shareholders’ agreement is drafted in order to take into consideration under what circumstances a shareholder can sell their interest in the business to someone that the other shareholders’ may not want to have involved in the business. Most importantly, buy/sell agreements should be negotiated and drafted in order to account for a shareholders death or divorce. For a consultation, please contact us.