The Arizona Legislature recently made changes to our corporate laws that require articles, bylaws, and other documents. Call Troncellito Law TODAY to ensure that your previously established corporate processes and corporate goals can still be met by and through your current corporate documents.
Among the many changes resulting from Arizona’s new corporate laws, and which should be addressed by businesses before there are any issues, are the following:
What to do? What to do?
The changes to Arizona corporate law provide opportunities to modernize organizational documents (or create them where they do not already exist). Contract Troncellito Law and ask to speak to Attorney Mike Troncellito to discuss your current corporate structure and how the same needs to be amended following our legislature’s changes to our corporate laws.
- Persons who acted on behalf of the company prior to incorporation were jointly and severally responsible for debts if they had actual knowledge that the company was not yet incorporated. The law has changed to hold liable those who “know or reasonably should have known”. This exposes many persons (directors, officers, owners, and even employees) to liability that must now be accounted for in the corporate documents.
- Disclosure of directors, officers, and persons owning more than 10% of a security (i.e., a business) must report their criminal convictions and orders involving securities, antitrust, fraud, theft, and misrepresentation for five (5) years rather than the prior law’s seven (7) year look back period.
- Actions without a meeting are now permitted so long as there is shareholder consent signed by the required majority to pass a resolution. Limited Liability companies can also permit action by less than unanimous consent without a meeting. This change permits companies in Arizona to change their bylaws and/or articles to reflect the same.
- Electronic Voting or Consents are now permitted. Prior to the change, a vote by electronic means were impermissible.
- Proxies. Arizona law limited proxy use to a 12 month period. However, the new changes now allow for default of one year for proxies, allows articles and/or bylaws to change that period, and specifically permits proxies my electronic means.
- Director Conduct. The changes to Arizona’s corporate law provides guidance on “how” directors are to consider whether the action is in the best interest of the corporation, including consideration of the long- and short-term interests of the company, its shareholders, employees, customers, community, environment, and other groups.
- Limitation of liability for directors of Benefit Corporations, corporations formed for purposes other than the monetary interests of the shareholders, has been extended to the directors and officers of regular for-profit corporations.
- Corporate Formation requirements no longer mandate specifying the value of par shares when initiating a corporate entity.