Opening a Company in Arizona, LLC or Corporation

To open a company in Arizona, three preliminary actions are needed: appoint a Registered Agent, choose the name [according to Arizona law AZ Rev Stat § 10-501 (2020)], and file the Articles of Incorporation with the Arizona Corporation Commission.

The Articles of Incorporation for opening a company in Arizona must include the following information:

• Type of Company. Select whether the business is a "commercial company" or a "professional company."
• Company Name. Must include "Association," "Company," "Corporation," "Limited," "Incorporated," or an abbreviation of these words, like "Inc."
• Indicate if it is a Professional Service Company. Skip this section if it is a commercial company, not a professional one. Otherwise, briefly explain the professional service to be provided.
• Type of Activity. Insert the main activity description of the company.
• Number of Shares for which authorization is requested from the Arizona Corporation Commission. Authorization for the issuance of preferred shares can also be requested.
• Address in Arizona. The Registered Agent's address can also be used.
• Names of the company's Directors.
• Name, address, and acceptance of the Registered Agent.
• Name and address of the Incorporator for Arizona. The Incorporator is the person or entity that signs the Articles of Incorporation.

To open the company in Arizona, publication in a local newspaper is also required

After the approval of the Articles of Incorporation, one more step is required for the company opening procedure to be considered complete. The Arizona Corporation Commission sends a Publication Notice form. This form must be completed and sent to a local newspaper. To fill out the form, the following information about the company is needed:

• Company name
• File number with the Arizona Corporation Commission
• Company address
• Name and address of the Registered Agent

The Publication Notice must be published for three consecutive editions by a newspaper in the same county as the Registered Agent. After the publication, the newspaper will send an Affidavit of Publication, which must be kept on file. The company opening procedure can be considered complete with the receipt of the affidavit.

After concluding the opening procedure, the following activities need to be carried out:

• Convene the first Shareholders' Meeting to elect the Board of Directors;
• First Board of Directors Meeting to:
  - Ratify the activities carried out by the Incorporator
  - Elect the Officers [President, Secretary, and Treasurer. Optionally, one or more Vice Presidents]
  - Issue the shares authorized by the Arizona Corporation Commission [see Articles of Incorporation]
  - Establish the share issuance price
  - Give the mandate for opening the company's bank account

Annual administrative report

The Annual Report of Arizona is an administrative form that must be filed annually with the Arizona Corporation Commission to confirm updated information on ownership and contacts. This form is due on the anniversary of the company's opening in Arizona.

Taxation in Arizona

• Corporate income tax in Arizona is levied at a flat rate of 4.9% with a minimum of $50.
• Personal incomes in Arizona are taxed at a fixed rate of 2.5%
• The Sales Tax in Arizona is 5.6%, to which a local surcharge of up to 5.3% may be added. The sales threshold in the state to trigger economic nexus is set at $100,000 per year.
• The property tax in Arizona is 0.51%

Nexus in Arizona for income taxation purposes

Arizona's Nexus rules for subjecting company income to taxation in the state [in other words, rules for considering income taxable in Arizona, in whole or in part] closely align with the situations contained in the federal Public Law 86-272 of 1959. It's important to note that this law prevents a state from taxing a company's income [opened in Arizona, in this case] if the only business activity conducted in Arizona is the solicitation of orders for tangible personal goods when such orders are sent outside the state for approval.