Home Services Acquisition Attorney in Arizona

Non-Compete Agreements

Enforceable with blue-pencil modification available

Enforceable if reasonable. Arizona courts use a three-factor test: the restraint must protect a legitimate business interest, be no broader than necessary, and not impose undue hardship on the employee. Arizona follows the "blue pencil" doctrine, allowing courts to modify overbroad covenants.

Tax Considerations

Arizona imposes a corporate income tax (flat 4.9% rate after recent reductions) and a Transaction Privilege Tax (TPT), which is the state's version of sales tax but is imposed on the seller. As a community property state, Arizona lets either spouse act alone on most community property, but joinder of both spouses is required for transfers of an interest in real property and for guaranty, indemnity or suretyship agreements, under Ariz. Rev. Stat. 25-214(C).

Filing Requirements

Mergers and entity conversions require filing with the Arizona Corporation Commission (ACC). Asset purchases of businesses holding professional licenses may require re-application. The ACC also oversees securities registrations.

Bulk Sales / Asset Purchases

Arizona has repealed UCC Article 6. However, Arizona Revised Statutes Section 42-1110 requires buyers of business assets to withhold a portion of the purchase price or obtain a tax clearance letter from the Arizona Department of Revenue. Failure to comply makes the buyer liable for the seller's unpaid taxes.