The Arizona Entity Restructuring Act has streamlined the process of restructuring a business entity. You can take advantage of the new business-friendly process under five different circumstances.
Lotzar Law Firm, PC can provide you with assistance if you wish to restructure your business under the Arizona Entity Restructuring Act. Our Scottsdale, AZ attorneys can provide guidance on whether restructuring makes sense for your organization and can assist you throughout the new streamlined and cost-effective process of entity restructuring that became effective on January 1, 2015.
How to Restructure Your Business under the Arizona Entity Restructuring Act
You are eligible to restructure your business under the Arizona Entity Restructuring Act if:
- A merger is occurring. Your organization is combining with one or more additional organizations to form one business.
- An interest exchange is occurring: Your organization is acquiring a 100 percent ownership interest in another company or your organization is being fully acquired by another entity.
- A conversion is occurring: Your organization is currently structured as a particular type of entity, such as a corporation, partnership, LLC, individual trust, or government entity, and you wish to convert the organization to another entity type.
- The organization’s domicile is changing: Your organization is currently domiciled in another state and you wish to change your company’s state of domicile to Arizona.
- A division is occurring: You wish to split your existing business entity into two or more separate entities.
Prior to the passage of the Arizona Entity Restructuring Act, completing any of these types of restructuring was much more complicated and expensive. For example, changing a domicile would require first forming an Arizona organization, then merging into the newly formed organization. Division of any entity was also not permissible prior to the change in the law.
Now, the Arizona Entity Restructuring Act has made things much simpler. The Arizona Entity Restructuring Act not only established a streamlined process for each of these different types of restructuring, but it also made it possible to combine them. For example, a company could both convert its type of business structure and assume an interest in another organization, or could convert its structure and domesticate by changing its domicile to an Arizona entity.
In order to complete the necessary restructuring, your organization will need to follow the initial governing documents that were created by your company. This typically means obtaining a majority vote of shareholders affirming that the restructuring is appropriate. If there are dissenters who do not vote in favor of the restructuring, it will also be necessary to comply with any statutes related to dissenter’s rights. If you are relocating from another jurisdiction, you will also be required to follow the laws of the state where your business was formed.
Lotzar Law Firm, PC can make the process of restructuring easier because our Scottsdale, AZ business lawyers have an in-depth understanding of how the Arizona Entity Restructuring Act applies to your organization. Call today to schedule a consultation and learn more about how to restructure your business by taking advantage of Arizona Entity Restructuring Act provisions.
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