Here are the steps to form a nonprofit corporation in Arizona. You should read this page in conjunction with the general section on forming a nonprofit corporation, which has additional steps listed that are applicable to all states. You should also familiarize yourself with Title 10, Chapters 24 to 35 and Chapters 36 to 40 of the Arizona Revised Statutes (abbreviated here as “A.R.S.”).
1. Choose a business name and check for availability
- Your nonprofit corporation’s name must be distinguishable from the names of other Arizona corporations and certain other entities. A.R.S. § 10‑3401(B).
- You can check the availability of a corporate name or reserve a corporate name for up to 120 days at the Arizona Corporation Commission website.
2. Recruit and/or appoint directors
- Every nonprofit corporation in Arizona must have a board of directors to exercise the powers of the corporation and manage its operation. A.R.S. § 10‑3801.
- The board of directors must consist of at least one director for your nonprofit corporation. A.R.S. § 10‑3803.
- Directors do not have to reside within Arizona, nor be a member of the nonprofit corporation. A.R.S. § 10‑3802.
3. Determine your known place of business and your statutory agent
- Every nonprofit corporation in Arizona must have a statutory agent. A.R.S. § 10‑3501. The statutory agent must be (a) an individual who resides in Arizona; (b) a domestic business or nonprofit corporation formed under A.R.S. Title 10; (c) a foreign business or nonprofit corporation authorized to transact business or conduct affairs in Arizona; (d) a limited liability company formed under A.R.S. Title 29; or (e) a limited liability company authorized to transact business in Arizona. Id.
- Every nonprofit corporation in Arizona must have a known place of business, which may be the address of the corporation’s statutory agent. Id. The known place of business must be a street address. A.R.S. § 10‑3202(A)(5).
4. Incorporate your Nonprofit Organization
You should read the general section on forming a nonprofit corporation in tandem with the steps outlined here.
a. Prepare and file articles of incorporation with the Arizona Corporation Commission.
- Articles of Incorporation for Nonprofit Corporations explains what to include in your articles in order to qualify for 501(c)(3) tax-exempt status.
- You must file your articles of incorporation with the Arizona Corporation Commission.
- The filing fee is $30. A.R.S. § 10‑3122.
- A.R.S. § 10‑3202 provides more details on what the Articles of Incorporation must include. The Arizona Corporation Commission website provides a simple, fill-in-the-blank form for nonprofit corporation Articles of Incorporation, with instructions. Note that the form must be submitted with a cover sheet.
- Every nonprofit corporation in Arizona must file an Annual Report with the State Corporation Commission and pay a $10 fee. A.R.S. § 10‑11622, § 10‑3122. The Annual Report can be filed electronically on the State Corporation Commission’s website. The State Corporation Commission does not send a reminder of the need to file an annual report.
b. Create the bylaws
- There are no set criteria for the content of bylaws, but they typically set forth internal rules and procedures of the corporation. See A.R.S. § 10‑3206.
- You are not required to file bylaws with the Secretary of State, but you must keep a copy at the nonprofit corporation’s principal office, known place of business, or the office of its statutory agent. A.R.S. § 10‑11601.
- Refer to Bylaws for Nonprofit Corporations for general information.
c. Hold an organizational meeting
d. Create a Records Book
- You will need a records book to store the important documents of your nonprofit corporation.
- See A.R.S. § 10‑11601 for specific information about record-keeping requirements under Arizona law.
5. Get your Employer Identification Number
Whenever you hire an employee in Arizona, you must inform both the IRS and the state of Arizona.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- For more on the EIN, see Forming a Nonprofit Corporation.
- The IRS details all of the necessary steps to complete, including verifying work eligibility and withholding allowances certificates, in Hiring Employees.
- For details on reporting the hiring of an employee to the state of Arizona, see the Arizona New Hire Reporting website.
- Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007. A.R.S. § 23‑214.
- If you have an employee or employees to whom you page wages for services performed in Arizona, you must register complete the Joint Tax Application for employer withholding and unemployment insurance. You can do this via the Arizona Department of Revenue website (click on “License a New Business”), which you can also use to register for other business taxes (if applicable).
6. Register with state offices
a. Arizona Secretary of State
- Before engaging in fundraising activities, you must register with the Arizona Secretary of State. A.R.S. § 44‑6552. You must also file an annual registration statement with the Arizona Secretary of State between September 1 and September 30 each year thereafter. Id.
b. Department of Revenue
7. Apply for tax exemptionsOnce you've incorporated as a nonprofit corporation, you can start applying for tax exemptions.
- The IRS lists a series of questions to help you determine whether your organization is eligible for federal tax exemption.
- See Applying for 501(c)(3) Tax Exemption for more information on how to apply for tax-exempt status under section 501(c)(3) of the tax code.
- All organizations exempt from federal income tax under section 501 of the Internal Revenue Code are exempt from Arizona income tax. A.R.S. § 43‑1201. See A.R.S. § 43‑1201 for further discussion of other entities exempt from Arizona income tax, including “[c]orporations organized and operated exclusively for religious, charitable, scientific, literary or educational purposes . . . [when] no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation.
- According to the Arizona Department of Revenue guide for nonprofit organizations, “[g]enerally, it is unnecessary to applyto the Department of Revenue for a letter confirmingexemption from state Income Tax.”
- See Forming a Nonprofit Corporation for details.