Think of all the people you communicate with regularly to run your LLC. Business partners, employees, banks, lawyers, and financial advisors all probably come to mind. But what about the state? It may not be at the top of your list, but running a successful LLC in Arizona requires consistent interaction with the state.
Formation documents, business information changes, lawsuits, and professional licenses – all of these (and more) require you to work with state agencies. The good news is that you don’t need to do it yourself.
Introducing the statutory agent. An Arizona statutory agent is an intermediary for your LLC, a person or company that handles your communication with the state. They’re a vital part of any LLC’s success. Before you file your Articles of Organization, you’ll need to have a designated statutory agent. How? Why? Who? Read on to find out.
What Is an Arizona Statutory Agent & Is It Necessary?
An LLC cannot be formed or do business in Arizona without first having a statutory agent on file with the Arizona Corporation Commission. This is required by law and the penalties can be serious. Maintaining a statutory agent doesn’t just keep you in good standing. It also provides an important service.
Think of your statutory agent as your ambassador to the state, handling all your LLC’s important legal, tax, and compliance information. This can either be an individual, company or statutory agent service, as long as they meet the state’s requirement (see below) and agree to the appointment by signing and submitting a Statutory Agent Acceptance form.
As soon as they’re appointed, your statutory agent must be consistently available in Arizona to receive and act on mailed documents and service of process. The Arizona Corporation Commission FAQ page offers a little more detail:
And make sure you keep a valid statutory agent on file at all times. If you don’t, your LLC will be labelled non-compliant and after 60 days, administratively dissolved.
What Are the Requirements of a Statutory Agent?
Arizona doesn’t have a long list of statutory agent restrictions, but there are a few, and they’re important to follow or else your agent won’t be valid. To obey these rules, your agent must:
- Be an individual Arizona resident or a corporation authorized to do business in the state.
- Be at least 18 years old
- Have a permanent, full-time physical address in Arizona.
- Have a mailing address in Arizona (P.O. boxes are not allowed)
- Not be the LLC itself. An Arizona LLC may not serve as its own agent.
Statutory agent information is a mandatory part of the Articles of Organization. Without it, your document will be rejected. Here’s a screenshot from the form:
Don’t forget the Statutory Agent Acceptance form, which your selected agent must sign and submit before the appointment will be official. Submit this form simultaneously with your Articles of Organization or Statement of Change, whichever you’re using to designate a new agent.
Who can be a Statutory Agent in Arizona?
Arizona’s statutory agent requirements are pretty broad, so you’ll have no shortage of options. On top of that, your agent can be either an individual or a professional service. But think carefully before choosing, because each option has its own pros and cons. Let’s take a closer look.
You may choose to appoint a single person as your statutory agent. Some LLC owners take on statutory agent duties themselves. Others appoint one of their partners or managers. Some will even appoint a family member. As long as the proposed agent fulfills the state’s requirements, they’re a valid option.
In addition to being an Arizona resident, your agent must not currently be establishing residency or receiving benefits in another state, even if that residency is still forthcoming.
Some smart statutory agent choices include attorneys, accountants, or other LLC partners, people who understand the ins and outs of business operations.
- Convenience – Having familiarity and mutual trust with your statutory agent is extremely beneficial, and appointing an acquaintance can provide both. Plus, you’ll always know how to contact them.
- Cost – Hiring someone you know often won’t cost a dime. It’s certainly cheaper than a professional service.
- Scheduling – Part of a statutory agent’s duty is being consistently available to receive mailed documents and service of process. If your agent goes on vacation or moves out of state, it will throw a wrench in your plans.
- Punctuality Risks – Some state communications and filings are very time-sensitive. If your agent is unavailable when documents are delivered, it could slow down the entire process and put you at risk for late fees and penalties. Even worse, a friend or family member could lose or misplace a document. So if you’d rather not interrogate Aunt Louise about the location of a particular tax form, you might consider using a statutory agent service instead.
Statutory Agent Service
If safety and reliability is your goal, hire a statutory agent service. A business acting as your statutory agent must be either a domestic entity in Arizona or a foreign entity who has foreign qualified in Arizona.
- Privacy – Some documents delivered to your statutory agent will contain sensitive information. Do you want details about your lawsuit or taxes lost out there in the world? Definitely not. A friend or family member might misplace these documents, but a professional service will not. Plus, in Arizona, all statutory agent names and addresses are available to the public. This might make an individual uncomfortable, but hiring a company will keep this personal information off the record.
- Reliability – Handling and processing time-sensitive documents is a statutory agent service’s specialty, its area of expertise, its main game. Hire a professional service and you can be sure that your filings will be submitted properly and punctually, so you’ll never have to deal with late fees or other penalties.
- Location – Many statutory agent companies offer service in most or all 50 states, so if business is booming and you decide to expand outside Arizona, you won’t need to find a new agent for each state.
- Cost – There’s no getting around it – hiring a service costs more than appointing an individual who’s willing to do it for free. However, for a reasonable price (roughly $100/year), you’ll receive premium services. Taking your car to a mechanic costs more than letting your neighbor try to fix it, but the mechanic gives you peace of mind that the job will get done right, and that may very well be worth the cost.
All of the other steps in the LLC formation process will keep you busy, but take some time to ensure you find a statutory agent that fits with your business model, goals, and values. Do this, and your LLC will reap the benefits for years to come.
How to get a Free Statutory Agent
Here’s a pro tip: you can get the reliability of a statutory agent service and the cost-effectiveness of an individual. The best of both worlds. When you hire certain LLC services to start your business, they’ll throw in free statutory agent service.
How it Works
Hire a company like IncFile or ZenBusiness to form your Arizona LLC. In addition to taking care of your Articles of Organization and other formation requirements, they will automatically include a statutory agent. It’s a great two-for-one deal.
And an LLC service is pretty affordable – $50 for the Arizona LLC formation fee, plus a small service fee. That’s great value for the number of benefits you receive. Some services will even cover and consolidate your LLC formation costs.
Take this route and you’ll sweep all formation paperwork and statutory agent duties off your plate. Plus, to keep track of everything, these services provide user-friendly online dashboards, so you can follow everything they’re doing to keep your LLC in good standing.
Statutory Agent Changes and Resignation
You may have a wonderful statutory agent, someone who takes care of everything efficiently and who you trust completely. But you know what they say: all good things must come to an end. At some point in the life of your LLC, you may need to change your Arizona statutory agent.
Arizona Corporation Commission
1300 W. Washington St.
Phoenix, Arizona 85007
Many times, this change is necessary because of a current agent’s resignation. If your agent resigns, don’t worry, you won’t suddenly be agentless. This is because the official resignation won’t go into effect until the 31st day after it’s been filed, so you’ll have a month to bring on a replacement.
But don’t take your time! Appoint a new agent as soon as possible, because your LLC will be administratively dissolved if it spends more than 60 days without an agent.
Have Questions or Concerns?
This guide contains almost everything there is to know about Arizona statutory agents. However, you might have a unique situation that requires additional information. Reaching out to the Arizona Corporation Commission is easy, and they’ll have the answers you need. Here’s how to go about it:
Visit Their Website
Take a look at the Arizona Corporation Commission website, which contains a whole bunch of useful information on statutory agents and the rest of the LLC formation process. You might find the answers you’re after on this FAQ page.
Give Them a Call
If you’d prefer to call, reach out to their Phoenix office at (602) 542-4251 or (800) 222-7000.
Alternatively, you could reach out to Northwest Registered Agent (the best registered agent service in our opinion) via phone or email. They’re quick to respond and very knowledgeable.