The Mid-Year Legal Checkup: 7 Things Arizona Business Owners Should Review Before Q3
By Nadine Deeb, Esq. · Published July 14, 2026
Most business owners only call a lawyer when something breaks — a partner dispute, a contract blowup, a demand letter. By then, the options are narrower and the costs are higher. The middle of the year is a natural moment to do the opposite: look at the legal side of your business while nothing is on fire. Here are seven items worth reviewing before Q3 kicks into gear.
1. Confirm Your Entity Is in Good Standing
Start with the basics. Is your LLC or corporation current with the Arizona Corporation Commission?
Arizona corporations must file annual reports with the Arizona Corporation Commission. Arizona LLCs generally do not file annual reports, but they should still keep statutory agent and address information current. Arizona corporations must maintain a known place of business and statutory agent, and Arizona LLCs must designate and maintain a statutory agent. See A.R.S. § 10-1622, A.R.S. § 10-3501, A.R.S. § 29-3115, and the Arizona Corporation Commission’s Business Services FAQs.
If you operate in more than one state — as many of our clients do across Arizona, California, and Texas — each state has its own maintenance requirements, and they do not sync up. California corporations and LLCs generally file an initial Statement of Information within 90 days and then during their filing window, and California tax obligations may apply annually. Texas taxable entities generally face annual franchise tax reporting, with reports due May 15; for 2024 and later report years, the Texas Comptroller has discontinued the No Tax Due Report, but required entities still file a Public Information Report or Ownership Information Report when applicable. See the California Secretary of State’s Statements of Information guidance, Cal. Corp. Code § 17702.09, and the Texas Comptroller’s Franchise Tax guidance.
Missed filings and stale entity records can lead to administrative dissolution or other status problems. In Arizona, an administratively dissolved corporation or LLC continues to exist, but generally may not carry on ordinary business except to wind up, liquidate, notify claimants, or seek reinstatement. That can also create practical problems with financing, contracts, and transactions. See A.R.S. § 10-1421 and A.R.S. § 29-3708.
2. Reread Your Operating Agreement — Especially If Anything Changed
Your operating agreement was written for the business you had when you signed it. If any of the following happened in the last twelve months, it may no longer fit:
- A member joined, left, or changed roles
- Profit distributions changed from what the document describes
- You took on debt or a major asset
- A member’s personal circumstances changed, such as marriage, divorce, or relocation
Under Arizona’s LLC Act, the operating agreement generally governs the LLC’s internal affairs and the relationships among the company, its members, and managers. If the agreement is silent, the Act’s default rules can fill the gap — subject to statutory provisions that cannot be varied by agreement. See A.R.S. § 29-3105.
Not sure your operating agreement still fits your business? We review governing documents against how the company actually operates today — ownership, distributions, management, and exit rights.
Book a Free Consultation →3. Pull Your Five Most-Used Contracts and Stress Test Them
You do not need to review every contract in the filing cabinet. Pull the handful you actually use — your customer agreement, vendor terms, proposal template, NDA — and ask three questions:
- Does it reflect how you actually do business today? If your payment terms, deliverables, or scope have drifted from what the document says, the document loses value exactly when you need it.
- Do the risk-shifting provisions still make sense? Indemnification, limitation of liability, and warranty language should match the size of deals you are doing now, not the deals you were doing when the template was drafted. We covered how indemnification actually works in a sale context in our recent post on indemnification in business sales.
- Is the dispute resolution clause intentional? Venue, arbitration, and attorneys’ fees provisions are often copied forward without anyone deciding they are still right.
A contract review does not have to mean rewriting every form from scratch. Often, the most useful work is identifying the two or three terms that are out of sync with the way the business now operates.
4. Check Your Employment Documents Against Your Actual Headcount
Businesses tend to cross compliance thresholds quietly. A company that added a few employees this year may have picked up new obligations without noticing.
Federal and state requirements often key off headcount. Title VII and ADA Title I generally apply to employers with 15 or more employees, while the FMLA generally applies to private employers with 50 or more employees, and employee eligibility includes a 50-employees-within-75-miles worksite requirement. Arizona’s earned paid sick time law applies broadly and uses employer size to determine accrual and use caps rather than whether the law applies at all. See the EEOC’s coverage guidance, DOL FMLA Fact Sheet #28N, and A.R.S. § 23-372.
Mid-year is also the time to confirm:
- Offer letters and handbooks match current policy, including remote work, PTO, and device use
- Independent contractors are properly classified
- Restrictive covenants, non-solicits, and confidentiality obligations are in place for anyone with client relationships or sensitive access
Independent contractor classification deserves particular attention. At the federal level, the U.S. Department of Labor continues to treat worker misclassification as an enforcement issue, and Arizona law incorporates FLSA standards into its wage-law definitions. See the DOL’s 2025 misclassification enforcement guidance and A.R.S. § 23-362. For a deeper look, see our post on employee classification compliance.
5. Look at What You Are Personally Guaranteeing
Leases, credit lines, vendor accounts, and equipment financing often include personal guarantees signed years ago. Owners frequently forget what they have guaranteed and for how much.
Make a simple list. If the business has grown stronger since you signed, some guarantees can be renegotiated or released at renewal — but only if you ask.
Want a second set of eyes on your contracts or guarantees before Q3? We work with owners across Arizona, California, and Texas to catch problems while they are still cheap to fix.
Book a Free Consultation →6. Review Your Registered Intellectual Property and Brand Assets
If your business name, logo, or product names matter to your revenue, confirm the basics.
Are trademark registrations current? Do domain names auto-renew to a card that still works? Is any licensing of your brand — or your use of someone else’s brand — actually documented?
A surprising number of brand disputes trace back to a renewal that lapsed or a handshake license that was never written down. A short mid-year review can catch those issues before they become expensive.
7. Update Your Records for What Is Coming, Not Just What Happened
Finally, look forward. If the second half of your year includes any of the following, the legal work should start now, not the week before:
- Bringing in a partner or investor
- Buying or selling a business or significant assets
- Signing a lease or a major customer contract
- Expanding into a new state
Deals move faster and cost less when the entity records, contracts, and disclosures are clean before negotiations start.
The Bottom Line
A mid-year legal checkup is not a major project. For most businesses, it is a focused review of entity status, core contracts, employment documents, and personal exposure — a few hours that can prevent the kind of problems that consume months. If it has been more than a year since anyone looked at these items, July is a good time.
Accord & Shield Legal works with business owners across Arizona, California, and Texas on formation, contracts, and ongoing general counsel support. Book a free consultation to put a checkup on the calendar.
Frequently Asked Questions
A mid-year legal checkup is a focused review of your entity’s good standing, core contracts, employment documents, personal guarantees, and intellectual property. The goal is to address legal issues proactively rather than in response to a problem. For most small businesses, it takes a few hours, not weeks.
Arizona LLCs generally do not file annual reports with the Arizona Corporation Commission, but they must keep statutory agent and address information current. Arizona corporations do have annual report requirements. See A.R.S. § 10-1622 and A.R.S. § 29-3115.
Review your operating agreement whenever ownership, management, or profit distribution changes, and at least once a year even if nothing obvious changed. Under A.R.S. § 29-3105, if the agreement is silent on an issue, Arizona’s statutory default rules can fill the gap, and those defaults may not match your intent.
Prioritize the documents you use most: your customer or client agreement, vendor terms, proposal or engagement template, and NDA. Confirm they reflect current pricing, scope, payment terms, and risk allocation.
Several federal obligations apply once a business reaches certain employee counts. Title VII and ADA Title I generally apply to employers with 15 or more employees, and the FMLA generally applies to private employers with 50 or more employees. Arizona’s earned paid sick time law applies broadly, with employer size affecting accrual and use caps.
Often, yes — particularly at renewal, or after the business has built a stronger financial track record. Lenders and landlords rarely offer to release a guarantee on their own, but many will discuss limits, burn-offs, or removal when asked.
Consequences vary by state. In Arizona, an administratively dissolved corporation or LLC continues to exist but generally may not carry on ordinary business except to wind up, liquidate, notify claimants, or seek reinstatement. See A.R.S. § 10-1421 and A.R.S. § 29-3708.
Before negotiations begin. Cleaning up entity records, contracts, and disclosures ahead of a deal — whether you are buying, selling, bringing in a partner, or expanding into a new state — typically lowers total legal cost and prevents delays.
This article is provided for general informational purposes only and is not legal, tax, or financial advice. Reading it does not create an attorney-client relationship with Accord & Shield Legal, PLLC. Filing requirements, employment thresholds, and entity-status rules change and are fact-specific, and the items above are a general framework rather than a complete list for any particular business. You should consult qualified counsel about your specific situation, and tax aspects should be reviewed with a qualified CPA or tax advisor. Representation is established only through a written engagement agreement; do not send confidential information unless and until an attorney-client relationship has been formally established. Prior results do not guarantee a similar outcome.