Introduction
When registering a business in the state of Arizona, you’re required to register a statutory agent (aka registered agent) with the Arizona Corporation Commission. This individual will serve as the legal point-of-contact for official correspondence on behalf of your business, receiving official mail from the state and accepting Service of Process for court documents.
Many new business owners gloss over this seemingly minor appointment, often defaulting to themself or their spouse without much thought. Unfortunately, this can lead to challenges down the road that may jeopardize your business.
As long as you meet Arizona’s simple qualifications, you certainly have the right to be your own statutory agent. However, the better question isn’t “can I” — but “should I be my own registered agent?”
What is a Statutory Agent in Arizona?
Before we dive into who should serve as your statutory agent, it helps to understand what the role entails.
In Arizona, a business’s registered agent is legally referred to as the statutory agent. The terms are generally interchangeable as most other states refer to the position as a registered agent, but you’ll need to use the proper terminology on state documents and applications.
What does a statutory agent do? A statutory agent is generally tasked with receiving important documents, including:
- Official correspondence from the state
- State and federal tax correspondence
- Service of Process
If you’re thinking these duties are as simple as picking up the mail, think again.
When the government mails a time-sensitive letter to the statutory agent, they expect it to be opened and acted upon in a timely manner. If the correspondence includes a deadline, such as a requirement to pay a past-due tax balance by a certain date, you can’t claim the excuse that you didn’t pick up the mail until after the deadline.
Similarly, when someone files a lawsuit against your business and attempts to deliver court documents via Service of Process, you’ll be in trouble if the courier can’t reach the statutory agent during normal business hours.
You can also find yourself in a pickle if your statutory agent neglects to pass the documents to you in a timely manner. There’s often a strict timeline attached to court cases, and your failure to act or respond within the allotted time can lead to serious consequences.
Who Can Be a Statutory Agent in Arizona?
Under Arizona law, a statutory agent must be “an individual resident of this state, a domestic corporation, a limited liability company or a foreign corporation or limited liability company authorized to transact business in this state” (ARS 29-604).
The statutory agent must have a physical address in the state of Arizona (not a PO Box or CMRA), and he or she must be available during normal business hours to receive Service of Process.
Under these restrictions, the following individuals can serve as a statutory agent provided they maintain a permanent residence in Arizona:
- The business owner
- A business member, manager, executive, or employee
- A trusted family member (e.g. your spouse)
- A trusted friend or neighbor
Third-party business entities can serve as a statutory agent, too. It’s actually quite common for business owners to outsource the role of statutory agent to an Arizona Statutory Agent Service, though doing so requires a monthly or annual fee.
Should I Be My Own Statutory Agent?
Now that we understand you can serve as your own statutory agent, let’s talk about the pros and cons of appointing yourself to the position.
The obvious benefit to serving as your own registered agent is that it’s free — you don’t have to pay a third party to handle your business correspondence for you. It also removes the anxiety of worrying about a third party statutory agent failing to receive correspondence and Service of Process and pass important documents along to you.
The primary challenge of serving as your own statutory agent is that you’ll be rooted to your office.
The statutory agent has a legal responsibility to be available at the listed address during normal business hours, meaning you’ll technically be in breach of state law if you are frequently out of the office (lunch breaks and occasional meetings aside). The associated risk of getting caught out of the office is relatively low, but if the Arizona Corporation Commission or a Service of Process courier is repeatedly unable to reach you, the state may administratively shut down your business.
Other than that, the risks of being a registered agent are minimal.
As long as you can fulfill the state’s mandate to be available in the listed location during normal business hours, it’s completely acceptable to be your own registered agent. However, if you’re frequently out of the office for sales appointments or regularly traveling, you should consider designating a third party as the statutory agent.
How to Be Your Own Statutory Agent in Arizona
Once you’ve made the decision to be your own statutory agent, the registration process is easy. As you’re preparing your Articles of Incorporation (Corp) or Articles of Organization (LLC), you’ll simply need to list the statutory agent’s name, address, and email address.
Filing your Articles of Incorporation or Articles of Organization requires much more than your statutory agent designation, though. Depending on the complexity of your business, you may wish to consult with a small business attorney before filing to ensure everything is in order.
How to Designate a Third Party Statutory Agent in Arizona
Whether you choose to designate another business owner (referred to as a member for LLCs), employee, family member, or friend, the registration process is largely the same in Arizona. Simply list the individual’s name, address, and email address on the Articles of Incorporation or Articles of Organization.
When hiring a Statutory Agent Service in Arizona, the agency’s information is often listed in the state business registration database. When you’re e-filing your Articles, you can simply select the agency from the drop-down menu and it will autofill their information.
In any case, designating a third party statutory agent does require one additional step. After submitting your business application to the state, the Arizona Corporation Commission will email the statutory agent to confirm their appointment.
The statutory agent will have 7 days to click on the confirmation link in the email and affirm their acceptance. Be sure to speak with this third party in advance to obtain their permission, and follow up to ensure a timely confirmation.
Call JacksonWhite’s Small Business Law Team at (480) 464-1111 to discuss your case today.