How the Arizona Corporation Commission Affects Small Businesses

Arizona is one of only seven states with a Commission formed by state constitution. There are only 13 states with elected commissioners — the rest are appointed by the state legislature or governor.

Established by Article 15 of the Arizona Constitution, the Arizona Corporation Commission has a broad mandate. Under the direction of five elected commissioners, the Commission has jurisdiction over four major areas: corporations, safety, securities, and utilities.

The Corporations Division

The Corporations Division of the Commission handles a variety of responsibilities related to corporations and limited liability companies in Arizona. Generally speaking, the Corporations Division is charged with the following tasks:

  • Approving articles of incorporation for Arizona businesses
  • Approving articles of organization for limited liability companies
  • Granting authority to foreign corporations to do business in Arizona
  • Ensuring companies doing business in Arizona operate lawfully
  • Revoking corporate charters of corporations that fail to comply with Arizona law
  • Collecting annual reports from Arizona corporations reflecting current status, business, and financial conditions
  • Maintaining a public record of annual reports from Arizona corporations
  • Responding to public questions concerning Arizona businesses and corporation law
  • Disseminating important information to Arizona businesses
  • Handling amendments, consolidations, mergers, dissolutions, and withdrawals related to articles of incorporation or articles of organization for Arizona corporations and LLCs

The Safety Division

The Safety Division of the Arizona Corporation Commission is divided into two sections: Pipeline Safety and Railroad Safety.

The Pipeline Safety Section of the Arizona Corporation Commission enforces pipeline safety standards and operating practices for transporting gas and hazardous liquids by pipeline. They also enforce safety standards and operating practices for liquefied natural gas facilities, and inspect all interstate gas transmission and hazardous liquid pipeline facilities.

The Railroad Safety Section of the Arizona Corporation Commission enforces federal safety standards for railroad operating practices, signals, tracks, motive power and equipment, and the shipment of hazardous materials by railway. This section is also responsible for inspecting and reviewing industrial tracks and rail-highway crossing construction projects.

The Securities Division

The ultimate mission of the Securities Division is to protect Arizonans against securities fraud. That may sound like a simple mandate, but it’s far from easy. To foster a fair and honest securities market in Arizona, the Securities Division handles the following tasks:

  • Reviewing prospective securities offerings to ensure full and fair disclosure 
  • Screening prospective securities offerings for fraud
  • Registering securities salespersons, dealers, investment advisors, and investment advisor representatives
  • Monitoring the conduct of securities salespersons, dealers, and investment advisors
  • Investigating securities violations
  • Initiating administrative actions, civil lawsuits, and referring cases for criminal prosecution

The Utilities Division

The Utilities Division of the Arizona Corporation Commission has jurisdiction over the quality of service and rates charged by public service utilities in Arizona. Given the fact that public service utilities are regulated monopolies with no local competitors, balancing the interests of local citizens, businesses, and utility companies is an ongoing challenge. The goal is to keep rates fair for citizens and businesses, while allowing utility companies to earn a fair profit.

To accomplish this task, the Utilities Division assumes the following responsibilities:

  • Researching and developing utility issues
  • Providing information and evidence in Commission proceedings regarding utility applications
  • Monitoring the quality of utility service
  • Monitoring utility rates approved by the Commissioners
  • Inspecting gas pipelines and railroad safety programs in conjunction with the Safety Division

In Arizona, utility rate changes require Commission approval in an open meeting. The process often takes 4 – 6 months before the hearing takes place, during which time the Utilities Division will audit the utility company’s books and records, hold discussions with interested parties, formulate a staff recommendation, analyze the impacts of the recommendation, and prepare written testimony and schedules. 

Which Utility is Regulated by Arizona’s Corporation Commission?

The Utility Division of the Arizona Corporation Commission has jurisdiction over four classes of public utilities: electric, gas, telephone, and water/sewage. The Division’s Consumer Services Staff is able to assist consumers with inquiries or disputes relating to these utilities, including:

  • Rates and charges
  • Installations and disconnections
  • Responsibility for utility bills
  • Deposit requests
  • Refusal of service
  • The type and quality of utility service
  • A utility company’s procedures and policies

Unfortunately, the Utilities Division does not have jurisdiction over inquiries and disputes regarding public utility merchandise, complaints against landlords or property owners, bottled propane or oil companies, municipally-owned utilities, cable television services, satellite TV service, or internet providers.

Arizona certificate of good standing

A certificate of good standing is an official document issued by the state that verifies a business entity is legally registered with the state and authorized to do business. In other states, the same document may be referred to as a certificate of status or certificate of existence.

To obtain a certificate of good standing from the Arizona Corporation Commission, search for your business entity name online through the Commission’s eCorp database. On the business entity’s information page, click on the button that says “Check Corporate Status.” As long as the business is in good standing, you may pay $45 to print a certificate of good standing from this page.

Arizona Corporation Commission Processing Times

In most cases, the Corporations Division is able to process paperwork related to LLCs and corporations in 3-4 weeks. However, actual processing times are always subject to change based on the division’s current workload.

If you’re in a hurry and can’t wait 3-4 weeks for the Corporations Division to process your paperwork, consider paying for expedited processing. Expedited processing cuts your wait time in half, and in some cases it can process in less than a week.

What is a Corporate Commissioner?

While the Arizona Constitution initially provided for three commissioners, Arizona voters approved a ballot measure in November 2000 expand the Commission to five Commissioners. These elected officials are charged with approving and denying utility rate adjustments, approving securities matters, and enforcing safety and public service requirements.

Commissioners are elected to an initial four-year term, with the possibility of being reelected to an additional consecutive four-year term. When a vacancy arises between elections, the governor can appoint a commissioner to fill the office until the next general election. While all five commissioners are elected by the public, it’s up to the commissioners to choose a Chairman of the Arizona Corporation Commission.

Arizona Corporation Commission Annual Reports

The Arizona Corporation Commission publishes an annual report every year. The purpose of this report is to keep the public apprised of the Commission’s organization, important accomplishments, ongoing priorities, and upcoming initiatives.

You can view the Commission’s most recent annual report online. The Commission maintains an online archive of past annual reports, too.

Receive Help With Your Small Business Needs in Arizona

Whatever your needs are as a small business or corporation in Arizona, working with a small business attorney is the best way to ensure that your company is in compliance with Arizona laws. When it comes to running a business you want to make sure that you are doing everything legitimately, and the benefits of being in compliance with all Arizona business laws will make your company more attractive to customers and investors alike. Consider speaking with the JacksonWhite small business law team and we can discuss your business law needs and how to set your company on track for success.

Call JacksonWhite’s Small Business Law Team at (480) 464-1111 to discuss your case today.

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