• A corporation whose shares are held by a single shareholder or closely knit group of shareholders.  The number of initial investors shall not exceed ten.  Generally, there are no public investors, and its shareholders are active in the management and/or operation of the business.
• The shareholders of a close corporation are generally personally liable for the debts and liabilities of the close corporation only to the extent of their capital contribution 
• A close corporation's profits are taxed twice: once at the corporate level and again when profits are distributed as dividends to their shareholders. If a close corporation meets specific IRS requirements, it can file for Subchapter S Corporation status.
• Articles of Incorporation for a close corporation must include the names and addresses of the managers; names, addresses, and amount of initial capital contribution by initial investors; and the aggregate amount of initial capital.  The name must include the words "Arizona Close Corporation" or its abbreviation.
• Close corporation purposes may not include operating as banks and financial institutions, insurance, and public utilities and carriers 
• Annual or periodic investor meetings are not required unless so stated in the Articles of Incorporation 
• Also, the Articles must state if a close corporation will have the power to acquire its outstanding capital units and if so, any restrictions or limitations thereon. 

• Incorporators must file the Articles of Incorporation, along with the required processing fees, with the Arizona Corporation Commission. Unless a delayed effective date is specified in the articles of incorporation, incorporation occurs and the corporate existence begins when the articles of incorporation and certificate of disclosure are delivered to the commission for filing.  Effectiveness may be delayed for up to 90 days later than the date it was delivered to the Commission.
• First, choose the name of your corporation. The name must be clearly different from the name of another business. So, at no extra charge, Proactive Management will perform three name searches to determine if your desired name(s) are available.
• This name must also include one of the following phrases "association," "bank," "corporation," "company," "incorporated," or "limited" or an abbreviation of one of the preceding words or one of these words or abbreviations in another language
• The name shall not contain language stating or implying that the corporation is organized for a purpose other than that permitted as a lawful business activity and subject to any applicable limitations and restrictions, and its Articles of Incorporation
• The Articles of Incorporation will address:
  • Name, address and signatures for each incorporator, all of whom must be at least 18 years old, and the notarized signature of at lease one incorporator 
  • Name, street address, and signature of the registered agent at such office.  Also, list the street address of the known place of business of the corporation if it is different from the street address of its registered agent. 
  • The total number, class, and par value (if any) of authorized shares 
  • A statement of the preferences, qualifications, limitations, restrictions, and the special or relative rights including convertible rights, if any, in respect of the shares of each class 
  • The duration of the company which may be perpetual or as otherwise specified in the Articles 
  • The purpose of the company, which can be to engage in any lawful business 
  • A brief statement characterizing the kind of activities which the business intends to undertake.  This statement does not limit the kind of activities in which the company actually engages.
  • The names and addresses of all initial directors serving until their successors are installed
• The Articles must be published for 3 consecutive issues within 60 days of filing.  This must be evidenced by an affidavit submitted to the Commission within 90 days of filing. 
• Also submitted with the Articles is the Certificate of Disclosure which lists
  • Information about the directors, trustees, incorporators and persons controlling or holding over 10% of the outstanding shares or a 10% beneficial interest in the corporation including whether they have been convicted of certain felonies, or subject to certain injunctions or orders 
  • Information about the directors, trustees, incorporators and persons controlling or holding over 20% of the outstanding shares or a 20% beneficial interest in the corporation and who have served in such capacity or held 20% interest in any other corporation on the bankruptcy, receivership, or charter revocation of the other corporation
  • Declarations and signatures of all incorporators
  • Date of execution which shall not be more than 30 days before its delivery to the Commission 

Disclaimer - Not Providing Legal Services - Proactive Management, Inc. presents the material on this site as general information only. It is not offered as and does not constitute legal advice or legal opinion and should not serve as a substitute for advice from an attorney or accountant familiar with the facts of your specific situation. We provide business formation services. We are not a law firm and do not provide legal or tax advice or services. We make no warranty, express or implied concerning the accuracy or reliability of the content at this site or at other sites to which we link.