Arizona Franchise Forms - Arizona Franchise Law

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Arizona Franchise Forms FAQ Arizona Franchises

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that a business needs to file with the state in order to officially become a corporation. They outline important information about the company, such as its name, purpose, and registered agent. In Arizona, the Articles of Incorporation need to be submitted to the Arizona Corporation Commission. This process ensures that the company is recognized as a separate legal entity with certain rights and responsibilities. By filing the Articles, the business establishes its existence and receives protection and benefits that come with being a corporation in Arizona.


What to Include in Articles of Incorporation

When creating the Articles of Incorporation in Arizona, it's essential to include certain information. Firstly, you should clearly state the new corporation's name, which needs to include a legal ending such as "Incorporated" or "Limited." You will also need to provide a principal office address, which doesn't necessarily have to be in Arizona. Additionally, it's important to outline the purpose of the corporation in simple terms, specifying the nature of business activities it plans to engage in. Furthermore, the Articles should mention the initial authorized number of shares and their par value (if any). It is also important to include the names and addresses of the initial directors of the corporation. These are the key details that are typically required when drafting Articles of Incorporation in Arizona.


1. Full Name of Corporation

The full name of the corporation in Arizona is the official legal title of a business entity operating in the state of Arizona. It is the complete name that the corporation has registered with the appropriate government authorities in Arizona. This full name is important for legal and administrative purposes, as it helps to identify and distinguish the corporation from other entities operating in the state. It is a formal way of referencing the corporation and is used in various official documents and communications related to its operations and compliance within Arizona.


2. Principal Place of Business

The Principal Place of Business is the main location where a business operates and performs its day-to-day activities. In Arizona, this refers to the primary physical address where the business is situated and conducts its operations. It can be a store, office, factory, or any other place where business transactions take place. Having a clear and specified Principal Place of Business is important for legal and administrative purposes, as it helps determine which laws and regulations the business is subject to and establishes its jurisdiction within the state of Arizona.


12. Limitation of Director’s Liability

In Arizona, there are certain limitations placed on the liability of directors. This means that directors of companies are not held personally responsible for all the actions and decisions made on behalf of the company. However, it's important to note that these limitations are not absolute and there are still situations where directors can be held liable. It's crucial for directors to act in the best interest of the company and follow their fiduciary duties to avoid any potential liability.