When a decedent holds a corporate interest in Arizona, the personal representative or inheritor may need to obtain and review the company’s formation documents and bylaws. These materials reveal incorporation details, governance rules and restrictions on share transfers. Below is a step-by-step guide under Arizona law.
Detailed Answer
1. Identify the Business Entity
Confirm whether the decedent’s interest is in a corporation or an LLC. For a corporation, you will need the Articles of Incorporation and bylaws. For an LLC, you will seek the Articles of Organization and operating agreement. This article focuses on corporations under Title 10 of the Arizona Revised Statutes (A.R.S.).
2. Secure Appointment as Personal Representative
You must be appointed by the probate court to act on behalf of the decedent’s estate. Obtain “Letters Testamentary” or “Letters of Administration.” Without these letters, the corporation may refuse to allow inspection of corporate records.
3. Obtain Formation Documents from the Arizona Corporation Commission (ACC)
- Visit the ACC’s eCorp portal: https://ecorp.azcc.gov/EntitySearch/Index.
- Search by entity name or file number.
- Purchase certified copies of the Articles of Incorporation and any amendments. Note: Bylaws are not filed with the ACC but may be adopted on incorporation.
4. Request Corporate Books and Records from the Corporation
Under A.R.S. § 10-1602, a corporation must allow any shareholder to inspect and copy certain records at a reasonable time, for a proper purpose. As personal representative, you stand in the shoes of the shareholder.
- Submit a written demand stating your proper purpose, such as reviewing transfer restrictions or determining share ownership.
- Include a copy of your Letters from probate court.
- Allow the corporation five business days to respond.
5. Enforce Inspection Rights if Needed
If the corporation refuses or unreasonably delays, you may petition the superior court in the county of the corporation’s principal office. The court can order inspection and award costs. See A.R.S. § 10-1603.
6. Review Bylaws and Transfer Provisions
Once you have the bylaws, look for:
- Shareholder meeting requirements (quorum, notice periods).
- Restrictions on transfer or assignment of shares.
- Preemptive rights, buy-sell agreements or right of first refusal.
- Provisions for amending bylaws (usually a vote of the board or shareholders).
Relevant Arizona Statutes
- A.R.S. § 10-1602 – Inspection of Records by Shareholders
- A.R.S. § 10-1603 – Enforcement of Inspection Rights
- A.R.S. § 10-1001 – Definitions for Corporate Code
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney to address your specific situation.
Helpful Hints
- Keep copies of all correspondence, proof of service and court documents.
- Be clear and concise when stating your proper purpose for inspection.
- Review the corporation’s annual report on the ACC portal for updates.
- Note all deadlines: statute gives five business days to respond to inspection requests.
- If bylaws aren’t dated, check the earliest board resolutions for adoption history.
- Consider hiring a forensic accountant if records appear incomplete or inconsistent.