To: Editors, News Directors

Date: February 17, 2004

For: Immediate Release

E-Filing is Here!
For-Profit Corporations Can File Annual Reports On-Line

PHOENIX – All corporations doing business in or from Arizona must file an Annual Report with the Arizona Corporation Commission. In its ongoing effort to make the filing and updating process easier for corporations, the Commission is launching an on-line E-File feature. For-profit corporations will be the first group to be able to submit Annual Reports through the Commission’s website, beginning today.

Why should I E-File?

Avoid penalties for late filings – Procrastination is a leading reason for late annual reports and penalties can add up quickly. By making the process quick and easy – most reports can be filed in less time than it takes to brew a pot of coffee – you will save time and postage expense.

It’s easy and it’s accurate – The E-File system does not allow you to advance to the next screen without completing the required information. This will reduce your chance of having your report rejected. The current rejection rate is about 30 percent. About 95 percent of the rejected annual reports are returned because information required by state laws has been omitted.

Enhanced data entry accuracy – You, the person who can best verify the spelling of unusual street or family names, are doing the data entry as opposed to staff members who often struggle to decipher unfamiliar names or unclear handwriting. E-Filing allows you to enter more officers and directors. This will lead to better quality data, both for the companies that register in Arizona and members of the public who rely on the data for important decisions. Once all the required fields are completed, you can proofread and verify your data entry prior to paying any fees.

Pay by Visa or MasterCard – You can pay the annual report filing fee through a secure credit card transaction. The Commission cannot accept credit card payments for mailed annual reports or reports that customers bring to our Phoenix or Tucson offices.

Easier to file in subsequent years – If your addresses, officer and director data doesn’t change all that much from year to year, subsequent annual report filings should be simpler.

When can’t I E-File?

Non-profits can’t E-File…yet – In the first phase of this transition, only for-profit companies can E-File. E-Filing for non-profit corporations is under review and could be implemented in the near future. Non-profit corporations are required to submit a Statement of Financial Condition to comply with Arizona’s corporations laws. This adds a layer of complexity to the E-Filing process and programmers need more time to make the software user-friendly.

Changing your Statutory Agent – If you need to change your Statutory Agent, you cannot use the E-File option. The law requires a verifiable signature for Statutory Agent changes so a hard copy signed by the appropriate parties must be mailed to the Commission.

Answering "yes" on the disclosure form – If your corporation or an officer or director answers "yes" on the disclosure form to the questions dealing with fraud, felonies, bankruptcy or charter revocation, you must submit the annual report by mail.

What are the Commissioners saying about E-File?

On budgets and efficiency: "The number of corporation and Limited Liability Company (LLC) filings continues to increase, year after year. Given the current budget scenario, all agencies have to find ways to make the state government more efficient, more effective and more consumer-friendly," Chairman Marc Spitzer explained. "I am proud of our staff’s hard work. By doing the programming in-house, we are able to roll out this innovation without outside contractors or additional expenditures."

On innovation: "Since I have been on the Commission, we have launched three important technology initiatives designed to improve public access to corporate data," Commissioner Bill Mundell said. "The first was in September 2000 when we launched real-time access to corporation and LLC records through our website. The second major innovation came in January 2003 when corporations could download their company’s Annual Report forms. The launch of the E-File system is the next logical step in our efforts to improve our operations."

On the role of technology: "Arizona was one of the first states to allow free, real-time access to corporate records. Fewer than a dozen states offer this new E-File feature and more enhancements are coming soon," Commissioner Jeff Hatch-Miller explained. "Throughout my career, I have advocated the use of technology where it makes sense and where it makes our lives easier. E-Filing is one such example. Companies can log on and complete the forms and save time and money in the process."

On reducing frustration: "I was surprised to learn that we have to reject nearly a third of the Annual Reports that come in because someone has omitted information required under state law," Commissioner Mike Gleason explained. "We realized that this causes frustration for our customers so the program was built to take the user step-by-step through the filing process. It’s exciting to have an opportunity to streamline government while also reducing frustration."

On good government: "Good government works when it facilitates access to important information, when consumers can interact easily with their government and when governing is effective and efficient," Commissioner Kristin K. Mayes said. "Every corporation doing business in or from Arizona must file an Annual Report. I am pleased to be a part of making that process easy, effective and efficient."