Availability of a Name
The first step in starting any business is pretty obvious, and that is to choose a name for the company. However; there are some regulations that you should be aware of in the name selection process.
First, Arizona requires a corporation name to include a corporate identifier or an abbreviated version of one. The identifier can be one of the following: Corporation (Corp.), Incorporated (Inc.), Company (Co.), Limited (Ltd.), or Association (Assoc.).
Secondly, the name must be distinguishable from other companies already registered with the Corporations Commission, and cannot be meant to mislead the general public. Name Availability may be checked online, and if the name is available, you may either reserve the name for a 120 day period ($45 filing fee), or continue on to file your organizational documents.
The Legal Beginning
Your corporation begins to legally exist once you file the Articles of Incorporation with the Arizona Corporation Commission. The articles can be submitted online and will detail the name, address and purpose of the corporation, the number of shares it will be authorized to issue, the name and address of the directors, and the name and address of a statutory agent as well as the name, address and signatures of each incorporator. There is a $60 filing fee for this form.
Along with the articles, Arizona requires a few other documents to be filed. These include the Statutory Agent Acceptance form which is to be signed by the designated agent, and the Certificate of Disclosure form which asks about the background of the officers and incorporators of the company.
Every corporation operating in the state of Arizona must submit an annual report by it’s due date. You may subscribe to an email reminder service to ensure your report is submitted on time each year. If the report is not submitted, a $9/month fee will be assessed, and after 90 days an administrative dissolution notice will be sent to the agent. The corporation then has 60 days to complete the report before the dissolution will take place.
In order to elect S-Corp status on a federal level, each corporation must file Form 2553: Election by a Small Business Corporation. The form needs to be signed by each shareholder and submitted within 2.5 months of the beginning of the corporations first tax year.
The corporation will also want to obtain an Employer Identification Number (EIN) from the IRS. By answering a few questions online, the number will be issued immediately for download.
What to Do Next
Once your S-corp is set up, remember to get a business license in the city you are operating. Most cities pull data from newly-registered businesses in the state so they can track down who in their city should have a license. While you can wait for your city to come knocking if you are on a tight budget (and many will simply give you a deadline to get a license), some municipalities may not be so friendly about it. The Arizona Commerce Authority for Small Business website is a good reference for what licenses are needed and how to obtain them.