Section 15.1 What is an Arizona Statutory Agent?
Arizona law requires that every company (limited liability companies, corporations and limited partnerships) formed in Arizona have a “statutory agent” at all times. Some other states refer to the statutory agent as the “resident agent.” The purpose of the statutory agent is to designate a person or entity in Arizona that the public can serve with legal documents on behalf of the company. An Arizona statutory agent must be one of the following:
- An adult individual who resides in Arizona.
- A domestic company formed under Arizona corporate law.
- A foreign company authorized to transact business in Arizona.
- A limited liability company formed under Arizona law.
- A limited liability company authorized to transact business in Arizona.
- The statutory agent must have an Arizona street address rather a post office box.
The Arizona statutory agent may have a post office box, but the statutory agent must also have a physical address in Arizona.
The person or entity named as the statutory agent for a company is agent of the company for the purpose of receiving and being served with legal documents intended for the company. All fifty states have this requirement, but some states refer to this type of agent as a “resident agent.”
Section 15.2 Why the Statutory Agent is Important
The importance of the company’s statutory agent is illustrated by an example that illustrates the most common scenario involving a statutory agent.
Example: A plaintiff files a lawsuit that names an Arizona limited liability company as a defendant. To initiate a lawsuit in an Arizona superior court, the plaintiff must have a process server serve the company with a summons and complaint. The easiest way for a process server to find and serve the company is for the process server to go to the ACC’s website and look at the ACC’s online record for the company, which shows the name and address of the company’s statutory agent. The process server can then go to the address of the statutory agent and serve the summons and complaint on the statutory agent, which is deemed to be service on the company. Once served, the company will have twenty days from the date of service of process to file a written answer to the complaint with the appropriate court. If the company fails to file a written answer to the complaint with the court within the twenty day period or fails to get an extension of the time to file a written answer, the plaintiff may obtain a default judgment against the company. A default judgment is the equivalent to a total victory for the plaintiff without having an actual trial.
Section 15.3 Who Should Be the Company’s Statutory Agent
Your company’s statutory agent must be a person or entity that you can trust to deliver to the manager any documents that are served on the company. If your statutory agent is served with legal documents and those documents are not forwarded timely to the manager, the company could suffer disastrous consequences such as losing a lawsuit without knowing that it was sued.
Many of KEYTLaw’s clients want us to be their company’s statutory agent because they do not want to risk having a process server serve them with a summons and complaint in connection with a lawsuit at their place of business when they might be with a customer or at home in the evenings or on weekends. Some people do not want to be listed as their company’s statutory agent because the name and address of the statutory agent is part of the company’s public record displayed on the Arizona Corporation Commission’s website. If privacy is a concern, you may want to retain KEYTLaw as the company’s statutory agent.
Section 15.4 KEYTLaw Statutory Agent Service
KEYTLaw, LLC, has a statutory agent service. We charge $99/year payable in advance to be the statutory agent of an Arizona LLC or corporation. To hire KEYTLaw, LLC, to be the statutory agent for your company you must complete our Statutory Agent Questionnaire, pay the $99 fee with your credit card using our secure web order form and follow the five steps listed in the next section.
As long as the Firm is the statutory agent for the company, the members, managers and the company agree to notify Richard Keyt and the Firm of the company’s current mailing address at all times by sending written change of address information to Richard Keyt, 7373 E. Doubletree Ranch Road, Suite 165, Scottsdale, AZ 85258. If the company changes its address and the members or the manager(s) of the company do not notify the Firm in writing of the change, the Firm is not responsible for any adverse consequences suffered by the company or any of its members or managers resulting from the company not receiving legal documents served on the Firm (including a default judgment from failing to answer a lawsuit complaint) or receiving the legal documents after a delay.
Section 15.5 How to Change the Statutory Agent of an Arizona LLC
The company may replace its statutory agent and appoint a new statutory agent at any time. Changing the statutory agent is an easy five step process:
- Step 1: Complete the LLC Statement of Change of Known Place of Business Address or Statutory Agent form. See the Instructions for this form. This form must be signed by a manager of a manager managed LLC or a member of a member managed LLC.
- Step 2: Complete the Statutory Agent Acceptance form. This form must signed by the person or entity that will be the new statutory agent.
- Step 3: Complete a Cover Sheet.
- Step 4: Pay the filing fee of $5 for regular filing (review in approximately one week) or $40 for expedited filing (review in approximately one month).
- Step 5: Submit the signed LLC Statement of Change of Known Place of Business Address or Statutory Agent form, the signed Statutory Agent Acceptance form, the Cover Sheet and the filing fee to the Arizona Corporation Commission, 300 W. Washington St., Phoenix, Arizona 85007
If you change the company’s statutory agent, please send us a copy of your change form so we will know not to bill the company for the annual statutory agent fee.
It is critically important that the company always maintain a statutory agent and that the statutory agent’s address be correct. IF THE COMPANY CEASES TO HAVE A STATUTORY AGENT OR IF THE STATUTORY AGENT’S ADDRESS IS NOT CORRECT, THE COMPANY WILL BE IN GRAVE DANGER. If the company does not have a statutory agent or if the statutory agent’s address is incorrect, any person or entity that serves legal documents may serve the legal documents on the ACC in place of the statutory agent. The ACC will then mail the legal documents served on it on behalf of the company to the company at its known place of business on file with the ACC. Having incorrect statutory agent information or no statutory agent could: (i) prevent the company from receiving important documents and notices, and (ii) allow a plaintiff in a lawsuit filed against the company to obtain a default judgment against the company without the company’s knowledge, which would be a disaster and have severe adverse economic harm.
Section 15.6 $100 Fee to Reinstate the Company if the Arizona Corporation Commission Terminates the Company
If the Company does not have a statutory agent or if correspondence sent to the statutory agent’s address on file with the Arizona Corporation Commission is not delivered because the address is incorrect, the Arizona Corporation Commission will terminate the Company’s existence thirty days after it becomes aware of the lack of a statutory agent or bad address for the statutory agent. If the Arizona Corporation Commission terminates the Company’s existence, the Company can correct the problem and reinstate the Company to good standing with the Arizona Corporation Commission, but it must pay a reinstatement fee of $100 plus any additional penalties or fees required by the Arizona Corporation Commission. If KEYTLaw, LLC, is the statutory agent and it resigns as the Company’s statutory agent and the Arizona Corporation Commission terminates the Company because it lacks a statutory agent, the Company will be liable for the $100 reinstatement fee.
Section 15.7 How to Review the ACC’s Records About the Company
I recommend that the members and managers of the company check the ACC’s website from time to time (at least once each calendar year) to make sure that the name and address of the company’s statutory agent is correct and that the domestic address of the company is correct. To check the company’s statutory agent and domestic address (its known place of business) on file with the ACC, go to the the ACC’s LLC search database. Enter the LLC’s name in the Name field then click on the “Search” icon. Click on the name of your company to go the page that displays the ACC’s information about your company. Check your company’s information to make sure everything is correct.
In the upper right make sure the Entity Status is Active. If your LLC’s status is not Active something is seriously wrong and you need to correct it immediately to prevent the ACC from dissolving the LLC.