Arizona Corporations and LLCs
Corporation and LLC business attorneys in Arizona can help you establish the right corporation for you and your company. There are benefits and drawbacks to different types of business entities. This includes possible tax benefits, different filing requirements, regulatory compliance, transparency, and how financial transactions are handled. Your Arizona corporation and LLC attorney can help you choose the best entity to help you accomplish your business and financial goals.
Types of Corporations
Limited Liability Company or Professional LLC
A limited liability company (LLC) is the most popular type of corporation formed in Arizona. An LLC provides business owners with the protection of limited liability, so they are generally not personally liable for business debts of the business. This can give a business owner peace of mind, knowing that their personal assets, bank accounts, and home may be protected from creditors.
An LLC also has flexible tax benefits for business owners. LLCs may not have to file separate taxes. Business profits or losses can pass through the LLC to the owner. The owner may be able to include the business profits and losses on their personal income taxes, as a sole proprietorship.
LLCs may also have simpler regulatory requirements in Arizona, as compared to other corporations. They are also more flexible, and can be structured according to how the owners want to run the company.
Some business owners may prefer a sole proprietorship or partnership to an LLC, depending on their business needs. A sole proprietorship may be simpler to start and to operate, although there are drawbacks to sole proprietorships. Other business owners who want to sell shares of their company may prefer to form a corporation instead of an LLC.
For-Profit (Business) Corporation and Professional Corporation
Corporations generally have more regulatory requirements, and may be less flexible than an LLC. However, there are benefits for certain businesses to form a for-profit corporation. Corporations generally have similar limited liability benefits. Their owners are not generally held to be personally liable to creditors for the debts or liabilities of the company.
Depending on the company and the structure of the corporation, a corporation may have lower tax liabilities than an LLC. The tax filing requirements may depend on whether the company wants to be taxed as an S-Corporation or a C-Corporation.
One of the primary benefits of a corporation is the ability to issue shares of stock in the company. A corporation can issue and sell stock to investors, bringing in additional money for the company to invest and operate.
However, a corporation has to abide by the more strict regulatory requirements. This generally includes filing articles of incorporation, creating bylaws, holding annual shareholder meetings and board of director meetings, documenting the meetings, and filing annual reports.
The formation of a nonprofit corporation is similar to that of a for-profit corporation. However, the goals and purpose of the business, and tax implications may be very different. Your nonprofit corporation may have to include a board of directors, and seek federal, state, and local tax exemption. If you are interested in starting an Arizona nonprofit, talk to your Arizona corporations and LLC attorneys to make sure forming a corporation is the right move.
Forming a Corporation
After you decide to start a corporation, the first step includes forming the corporation. Some individuals with business, tax, and corporate experience may decide to file the corporation or LLC on their own. However, even if you are going to form a corporation or LLC on your own, it may be a good idea to have an experienced attorney review the filing documents so that you can avoid problems down the line.
Most companies enlist the assistance of experienced corporate business attorneys to form an LLC or other corporation. They will be able to make sure you are choosing the best type of corporation for your business and financial goals. They will also make sure that all the necessary information is included so that you can get your business up and running. If you have any questions about forming a corporation, contact your Arizona business law attorneys.
Operating and Maintaining a Corporation
Once you form your corporation or LLC, you may still be required to file certain documents, maintain records, hold annual meetings, and properly file tax documents. Within the first year of starting a new business or corporation, the business owners may run into questions they did not anticipate at the time of forming their corporation. As soon as a problem or issue arises you should talk to your attorney to make sure your assets are protected, and your business can continue to operate.
Many new corporations or LLCs experience problems with business partners, the board of shareholders, or other corporate officers. This may be because the company is not meeting profit forecasts, or the individuals have different ideas about the future of the company. Your corporate attorney can help to negotiate an acceptable solution between differing parties, or provide for an option for the partners to separate while maintaining the health of the corporation.
Dissolving or Terminating a Corporation
In the event you decide to terminate a corporation, there may be specific requirements to dissolving the corporate entity. This generally involves filing Articles of Dissolution with the Arizona Corporation Commission. The corporation may have to deliver a tax clearance certificate to the state, to show that any taxes levied against the corporation have been satisfied. Before dissolving your corporation, talk to your attorney to see what options you may have available.