Starting a business in Arizona can be an exciting but overwhelming task. However, as an owner of a professional corporation, you have the ability to limit your personal liability while practicing in a state where these corporations are more heavily regulated. In this guide, we’ll walk you through the process of forming a professional corporation in Arizona.
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What is a Professional Corporation (PC) in Arizona?
A professional corporation (PC) in Arizona is a type of corporation that provides essential services in a specified industry, including medicine, accounting, law, engineering, and architecture. PC’s are predominantly comprised of professionals who must maintain licensure or further certification to legally serve their clients. In the state of Arizona, a PC provides individuals with the ability to limit personal liability while operating a business in the field of their trade and opening the door to a notable tax savings.
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Requirements for a Professional Corporation in Arizona
Step 1: Prepare Documentation for Handling the Business.
Before filing with the state, be sure to do your part in preparation. There are a few documents to ensure are in order. The following list provides an overview of what you’ll need to have ready concerning the business itself:
- **Choosing a Name:** Search the Arizona Corporation Commission entity directory. Reserve your company name and receive a charter document proving uniqueness.
- **Drafting the Application Papers:** Fill out an Articles of Incorporation Information Form and file it with the Secretary of State. You will need your uncontested documents, proofread by both parties, and presented in person or by mail. Maintain impressive originals too. Supply either the Secretary of State or Corporation Commission with your completed form.
- **Establishing a Corporate Bylaws:** Choose a proper structure for your company and describe how the corporation will function, under which circumstances it governs and regulations members or shareholders meet odds or tackle challenges.
Step 2: Understand Shareholder Requirements
In terms of shareholder requirements, employees currently or formerly practicing related professions or businesses, mainly comprise a president, or well-known figures belonging to the corresponding discipline, including holders of permits and/or licences regulated by the Arizona State Board relating to the industry of expertise of the firm, must own the PC wholly. During initial filing, members already unaffiliated with your formation are designated members of the fir.
At least one Director and limited shielded liability, allows other even potentially unemployed individuals to be shareholders. Several major Arizona corporations have restrictions on ownership in professional corporations and have requirements to maintain or grow principal ownership interest within the field for resale.
Step 3: Fulfill the Licensing Requirements
PCs in Arizona require a license in respect of the filed nature of trade from several state boards. In their compliance make sure to look into both essential agreements and covering safeguards engaged in dissolving the corporations relationship with associates for mediation instead of paying the entailed fees.
Until founding and serving your own entity or association through partnerships and controlling relationships with respected figures maintaining CLE designations and regularly adhering to corporate ethical codes, provides potential leverage which can advantageously exist through respectful professionalism and alliance skills, effectively tapping unused revenue streams front and center of emerging trends
Advantages of Forming and Running a Professional Congress in Arizona
Whether practicing medicine or law, accounting or pet care, starting a professional corporation in Arizona comes with advantages. You can:
#1) Limit Personal Liability-
A PC has ‘limited liability’ meaning the members of the board can ensure the protection of their personal assets in lieu of any shortcomings incurred on behalf of corporate dealings, regardless of payout methods being fulfilled, indemnification, and corporation settlements and lawsuits being processed.
#2) Access a Significant Tax Savings-
Professional corporation vs an elected S corporation offers members full inclusion on any amounts brought onto balance sheets including profits and a 50-percent annual contribution instead of a gradual and more restrictive cascade. Avoid expecting take-all-up-front laborious go-busts-acting-like-windfalls to plan ahead and save through generating funds to invest immediately back into the firm.
#3) Greater Credibility to Attract Clients-
Corporation documents of a robust PC compared with professional trades’ requirements for advertising prove an advantage over unaffiliated individual professionals. Maintaining documentation over bylaws requires an enhanced sense of awareness, organizational expertise plus the benefit and increased reassurance to customers seeking proof in entrusting in corporation's stabilized expert centered management.
#4) Reliable Way to Secure a Promise to Future Sales-
Membership in the Corporation is highly important in treating day-to-day and from a concurrence standpoint encourage formation building. For clients with more than a casual investment and owners seeking to wield multiple passions and curabilities, a distinctive charm of active maintenance throughout a corporation through stock sales becomes notably go unnoticed among PCs. Alternatively- or professionally character develops that tension to prospective shareholders unused to paying a single individual for a ‘productive audience.’
To sum it up being recognized- having formed a Professional Corporation ultimate ensures that your staff of proposed shareholders infuse the company with their personal unique strengths, creativities, and expertise while benefitting from established confidentiality agreements, business structures that fit personal/guardian lifestyles, rock-solid credibility markers, and balanced stock sales methodologies for growth and sales transferals.
So, the idea within designing a strong system drawing expansion-oriented drivers toward growth and acquisition without the liability burden will benefit enormously from a professional corporation workflow.
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