Getting Authority for a Foreign For-Profit Corporation in Arizona

Arizona treats any corporation chartered outside its borders as foreign, whether the charter came from Delaware, Texas or any other state. Under A.R.S. 10-1501, a foreign corporation may not transact business in Arizona until the Corporation Commission grants it authority to do so.

The Commission, not the Secretary of State, runs corporate filings here, and its word for the filing is an Application for Authority. A grant of authority does not create a second company. Your corporation keeps its home charter, and Arizona does not regulate its internal affairs. What the grant gives you is the right to operate in the state with the same rights and duties as a domestic corporation of the same kind, plus a public record that names your Arizona statutory agent. Arizona's word for a registered agent is statutory agent.

A nonprofit corporation uses the same form but a different statute and its own guide. This page is about for-profit corporations.

The statute prohibits transacting business without authority but never defines the phrase. Instead, 10-1501(B) lists activities that do not count, and subsection (C) says the list is not exhaustive. Arizona's list is longer than most:

• Maintaining, defending or settling any proceeding
• Board and shareholder meetings and other internal affairs
• Maintaining bank accounts
• Keeping an office to transfer the corporation's own securities
• Selling through independent contractors
• Soliciting sales whose contracts form only when an out-of-state office says yes
• Borrowing, lending, or taking a mortgage or other lien on property
• Collecting debts or enforcing security interests
• Owning real or personal property, without more
• A one-off deal wrapped up within thirty days, as opposed to a run of similar deals
• Interstate commerce
• Being a limited partner or an LLC member

Notice that owning property, banking in the state and holding meetings here are all on the safe side of the line by themselves. An office with staff, a storefront or steady local sales is a different picture, and none of those appear on the list.

The Commission will not rule on your facts. Its instructions say the corporation decides, and that a corporation in doubt should ask an attorney. That is the right move for a close call, such as a few sales that straddle the thirty-day window.

The filing is Form C018, the Commission's Application for Authority. Its fee is $175. That is the statutory fee plus a $25 data processing charge, both set in A.R.S. 10-122, and it is nonrefundable. Expedited handling adds $35, and the Commission also sells faster tiers for an extra charge. A later Statement of Change carries no fee on the Commission's schedule.

Online filing goes through the Arizona Business Center, the Commission's portal that replaced eCorp, and the Commission urges filers to use it. A card paid through the portal adds a managed service fee of 2.2% with a $2 minimum. Paper goes by mail, fax or in person to the Examination Section in Phoenix with a cover sheet, and a card cannot pay for a mailed filing.

What the application asks for

• The exact name in the home state, and the name to be used in Arizona
• The state of incorporation, the incorporation date and the duration
• The principal office street address in the home state
• An Arizona known place of business, which can be the statutory agent's address
• The statutory agent's name and Arizona street address
• Every director and officer with a business address (these are public)
• Authorized and issued shares, by class
• A short statement of the business to be conducted in Arizona
• A signature by the board chair or an authorized officer, under penalty of law

Publication

After approval, the application must be published within sixty days, or the Commission posts it to its database. The statute allows the database in place of a newspaper only when the corporation's known place of business is in a county with more than 800,000 people. The Commission mails an approval letter that says which applies, and filing the newspaper's affidavit is optional. A missed publication can lead to revocation after notice.

Arizona does require a home-state certificate for a corporation, and it sets an age limit. Delivered with the application must be a certificate of existence, a good standing certificate or a similar document issued by the state of incorporation. Nothing older than 60 days is accepted. You also need certified copies of the original articles of incorporation and of every amendment.

Order these from your home state's filing office, which charges its own fees. Because the certificate goes stale after 60 days, request it right before you plan to file, not months ahead.

The Certificate of Disclosure is a separate document

Arizona also wants a Certificate of Disclosure, Form C003, with the application. It is not a home-state document. An officer signs it to answer questions about felony convictions, court judgments and past corporate bankruptcies involving the corporation's officers, directors and larger shareholders. Date it within 30 days before delivery. It carries no separate fee.

The corporate name

A foreign corporation's Arizona name has to contain a corporate word such as company, corporation, limited, bank, association or incorporated, or an abbreviation of one. If your name lacks one, you add it for use in Arizona. The name cannot include the phrase limited liability company or the abbreviations LLC and LC, and it cannot match a name already on the Commission's records. When your real name is taken, you may use a fictitious name if you attach a board resolution adopting it, certified by the secretary. Banking and trust words need prior written approval from the Department of Financial Institutions.

The statutory agent

A.R.S. 10-1507 requires every authorized foreign corporation to keep an Arizona known place of business and a statutory agent at all times. Any of these may serve: a person living in Arizona, a domestic corporation, a foreign corporation authorized here, or an LLC formed or authorized in the state. The corporation cannot be its own agent.

• Address. A street address in Arizona. A PO box does not qualify, though the agent may list a mailing address as well.
• Acceptance. Written acceptance from the agent, on Form M002, is required, or the application is rejected.
• Notices. The Commission mails its official notices to the agent.

No business-hours rule appears in the statute or the instructions. Going sixty days without an agent or a known place of business is a ground for revocation.

The annual report

Every year, a foreign corporation owes the Commission an annual report. For a for-profit corporation the fee is $45. The due date is assigned by the Commission, falls in your anniversary month and is listed on the corporation's record. A corporation that needs more time can get an extension of up to six months if the request and the fee arrive before the due date. The report repeats the agent, the officers and directors, the share counts and a Certificate of Disclosure, and it includes a statement that the corporate income tax returns required under Arizona's tax code have been filed. Missing it brings monthly penalties of twenty percent of the fees due, and ultimately revocation.

Changes and amendments

When the home charter is amended, send the Commission an authenticated copy within sixty days; filing late adds a $100 penalty. A change of name, duration or home state calls for Articles of Amendment to the Application for Authority, which cost $25. A new agent or known place of business is reported on a Statement of Change, which needs the new agent's written consent.

Taxes

Authority is separate from tax registration. The Commission's own materials only say a business may need a transaction privilege tax application from the Department of Revenue, so check what applies to your sales.

Withdrawing

To leave Arizona, file an Application for Withdrawal for $25. If the corporation transacted business or issued shares here, the Department of Revenue must first issue a tax clearance certificate, and the approved withdrawal is then published. Past-due annual reports must be filed before it is approved.

Section 10-1502 sets out the consequences.

• Courts. An unauthorized foreign corporation cannot start or continue a case in an Arizona court before authority is granted. That bar extends to its successor and to anyone it assigns a claim to, and a court may pause a case to decide whether authority was needed.
• Back fees and a penalty. Fees are due for every year of unauthorized activity, measured by what an authorized corporation would have paid in fees and reports. Add the statutory penalties on those fees and a separate penalty of up to $1,000. The Attorney General can sue to collect.
• Injunction. The Attorney General or any other person can sue to stop it from transacting business here. If it then obtains authority the suit is dismissed, but the plaintiff recovers costs and attorney fees.

Failure to obtain authority does not void the corporation's acts, and defending a lawsuit is still allowed. A court finding that it needed authority and lacked it is prima facie evidence against it in other cases.

Mainstay's foreign qualification service is built for a corporation chartered elsewhere. It prepares the Application for Authority and files it with the Commission. The Arizona statutory agent is free for year one and costs $149 a year at renewal. The state's charge is $175. You supply the home-state details. Arizona wants a certificate and certified articles from home, so you order them from your home state's filing office, because Mainstay does not order them.

The service ends at the authority and the agent. The annual report, the Certificate of Disclosure, publication costs and tax filings stay with you or your accountant. Mainstay prepares paperwork and serves as your agent; it is not a law firm. For the current checkout lines and total, open the Arizona foreign qualification page. The agent itself is described on the Arizona registered agent page.