Don’t Forget to File Your Annual Report

Almost all of our Arizona association clients are nonprofit corporations.  As such, these associations are subject to the provisions of the Arizona Nonprofit Corporation Act, contained in A.R.S.§§ 10-3101 through 10-11702 (the “Act”).  Pursuant to the Act, each nonprofit corporation is required to file each year an annual report with the Arizona Corporation Commission (the “ACC”).  The association must file the annual report on or before the due date established by the ACC.  The due date of the association’s annual report is the same each year.  In the past, the ACC used to mail reminders to corporations of the due dates of their reports.  Due to budget cuts, the ACC no longer does so.  Therefore, it is important that someone (an officer of the association or its property manager) calendar the due date of the annual report so that it is filed in a timely manner. 

Most associations may file their annual reports online.  The requirements for electronic filing include: (i) the annual report must be due “now” or within the next three months, (ii) the report must be filed by an officer of the corporation who is listed in the report’s officers section, (iii) the filing must be the original filing of the report, not a resubmitted or corrected annual report, (iv) the corporation must have a statutory agent of record with the ACC and (v) payment of filing fees must be made by credit card at the time of the filing.

You can go to the ACC website www.cc.state.az to start the online filing process.  First, click on the STARPAS button.  Then click on the “Business Entity Search” line, enter the name of your association and click “Search”.  This will take you to your association’s ACC site.  The due date of the next annual report will be set forth on that page.  If a report is due and therefore must be filed, click on the line in red at the top of the screen that states “E-file An Annual Report Online – Click Here”.  You will first be asked to answer “yes” or “no” to certain questions regarding the association and the directors and officers of the association.  You will then be asked to select the date of the report you wish to file.  Clicking on that date will direct you to the information from the prior year’s annual report.  You should confirm that there have been no changes to that information.  Please note that you cannot change the name of the statutory agent via the online report.  To make that change, you will need to complete and file a separate Statement of Change of Known Place of Business which is available on the ACC website.  Once the information is updated, one of the named officers must electronically sign the report.  You must then pay the fees associated with filing the report.  The standard fee for nonprofit corporations is $10.00, and you may expedite the processing of the filing by paying an additional $35.00 fee.  You may want to pay to expedite the processing if you are filing the report close to the due date thereof.  The ACC accepts only VISA, American Express and Mastercard credit cards for paying the fees online.  Be sure to print a copy of the report for the association’s records. 

In the event you cannot or do not want to file the association’s annual report online, you may print the report, complete it and mail it to the ACC.  You may also obtain the annual report forms on the http://starpas.azcc.gov website or call the ACC at (602) 542-3285 to request the forms.  However, you must allow time for the mailing of the forms to you and the mailing to the ACC of the completed annual report to ensure the report is filed prior to its due date.  Also, if you mail the report, do not forget to include a check for the filing fee (and the fee for expediting the processing should you be requesting it be expedited) and include the association’s ACC file number on the check.  In any case, whether filing online or by mail, remember that the annual reports are public information accessible by anyone.  Therefore, do not put social security numbers, tax identification numbers, employer identification numbers or any other personal information not required to complete the forms on the annual reports.

If the association fails to file an annual report, it is subject to administrative dissolution by the ACC.  If the association has not filed its annual report within sixty days after the date it is due, the ACC will notify the association that if the report is not filed within sixty days of such notice, the ACC will administratively dissolve the corporation.  However, if such action is taken by the ACC, the association may reinstate its corporate existence by applying for reinstatement, filing the delinquent annual report and paying the prescribed filing and reinstatement fees.  When the reinstatement is approved, it relates back to and takes effect as of the effective date of the dissolution, and the association may carry on its activities as if the dissolution had never occurred.  However, the costs and risks associated with the dissolution and reinstatement process dictate that the association ensures that the association’s annual reports are filed on or before the due dates thereof.  Please note that the ACC may also dissolve the association’s corporate existence if the association fails to maintain a statutory agent or fails to notify the ACC within sixty days that its statutory agent or known place of business has changed or its statutory agent has resigned.  As mentioned above, you need to notify the ACC of any such changes via the filing of a Statement of Change of Known Place of Business with the ACC.

In summary, it is important that each year the association file its annual report – whether online or by mail – on or before the due date thereof, that it follow the ACC instructions carefully when filing the report and that, in the interim, it keep the ACC informed of any changes to the statutory agent or the known place of business of the association.  We will be happy to assist you in ensuring that all of these steps are taken appropriately.  Please feel free to call Jim Atkinson or James Hazlewood at 480-427-2800 if you have any questions regarding the filing of your annual reports.