Certificate Of Disclosure

A certificate of disclosure must be filed with the Articles of Incorporation.  The AZ Corporation Commission (ACC) has created the form that must be used as the certificate of disclosure.  The certificate of disclosure requests certain information about the past conduct of the officers,  directors, trustees, incorporators and persons holding or controlling more than 10%  or 20%  of the issued and outstanding common shares or of any other proprietary, beneficial or membership interest in the corporation.  The certificate of disclosure must be prepared and signed by all incorporators, initial directors, and the known initial officers of the corporation. 

The certificate of disclosure must be amended to be brought up to date if new directors, officers, holders of more than 10% of the shares or beneficial interests, or trustees are added within the first 60 days after the initial filing.   The amended certificate of disclosure can be filed by the incorporator or if the organizational meeting of the board of directors has taken place, then the corporation can prepare and file the amended certificate through the action of the officers.

If the certificate of disclosure is not amended as required, the ACC can administratively revoke the corporation.  If an amended certificate should have been filed and was not filed, the Corporation Commission can begin administrative dissolution proceedings at any time it becomes aware of the lack of filing.

The purpose of the certificate of disclosure is to provide background information of the key individuals responsible for running the company – the officers and directors.  The certificate of disclosure addresses information such as if any if the identified individuals has been convicted of  a felony involving a securities transaction, consumer fraud or antitrust in any state or federal jurisdiction within a 7 year period immediately preceding the signing of the certificate of disclosure.  In addition, it identifies if the individuals have been convicted of a felony which consisted of fraud, misrepresentation, theft by false pretenses or restraint of trade or monopoly in any state or federal jurisdiction within a 7 year period immediately preceding the signing of the certificate of disclosure.  It also addresses if the individuals have been or are subject to an injunction, judgment, decree or permanent order of any state or federal court entered within the 7-year period immediately preceding the execution of the certificate of disclosure when the injunction, judgment, decree or permanent order involved the violation of fraud or registration provisions of the securities laws of that jurisdiction or involved the violation of the consumer fraud laws of that jurisdiction, or involved the violation of the antitrust or restraint of trade laws of that jurisdiction.

Additionally, the certificate requests if any of the identified people have serviced in such a capacity in any other corporation in any jurisdiction and if that corporation was involved in a bankruptcy or receivership.  If the answer to any of these questions is yes, then the individual must provide their full name and aliases, full birth name, present and prior addresses, date and location of birth and the nature and description of each conviction or judicial action, date and location, the court and public agency involved and the file or cause number of the case.  For the bankruptcy, the individual must provide the states in which the corporation was incorporated and has transacted business, dates of the corporate operation and date and case number of bankruptcy or receivership.

Any person who executes or contributes information for a certificate of disclosure and who intentionally makes any untrue statement of material fact or withholds any material fact with regard to the information required in the certificate of disclosure is guilty of a class 6 felony. If false information is provided to an incorporator and the incorporator executes a certificate with the wrong information, it is the person who withheld information from the incorporator, not the incorporator, who has committed the felony.