All Arizona corporations start out as a C corporation. Then the owners can choose to become an S corporation by filing form 2553. S corporations are taxed like a partnership or a sole proprietorship-that means the corporation's income "passes through" to the owners without the corporation being taxed. The S corporation can't have more than seventy-five shareholders and they must all be US citizens. Limited Liability Corporations, or LLCs, are taxed similarly to S-Corporations. The LLC has no restrictions on how many shareholders it may have or who can hold shares.
Piercing the Corporate Veil in Business Law of Arizona
Arizona courts have, in some cases, allowed plaintiffs to pursue the owner's assets in order to satisfy a judgment the court has arrived at versus the corporation. However, this piercing of the corporate veil happens in only the most severe cases, such as cases involving fraud or intermingling of the owner's and corporate funds, and practices that reach a point wherein the corporation can no longer be viewed as a separate entity.
Converting an Existing Partnership or Proprietorship to an LLC
Your partnership must file an application in order to turn into an LLC. You will also have to remember to change your licenses and permits to the name of your LLC.
Business Law in Arizona and Registered Agents
A registered agent, also called a statutory agent in Arizona, supplies a local address for the receiving any papers served and also for contact by the Arizona Corporation Commission, Secretary of State or other Arizona government agencies. A corporation and LLC need registered agents in Arizona because even though they autonomous legal entities, they cannot receive paperwork, and therefore must have someone to receive paperwork on their behalf. The registered agent then forwards all tax information, any papers served, and any other paperwork to the business.
If you are Incorporated Elsewhere
If you are incorporated outside of Arizona you need permission to do business in Arizona. Normally this is a simple process and involves contacting the Arizona secretary of state.
Non-Profit Corporations
A non-profit corporation is a corporation that is formed for charitable, educational, religious, literary or scientific purpose, and therefore is not expected to pay either state or federal taxes. The government does not expect taxes from non-profit corporations as it considers their actions to be for the betterment of society.
