Arizona Revised Statutes

Ariz. Rev. Stat. § 44-1871 (2026)

Securities that may be registered by description

✓ current as of May 2026

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A. Securities, except real property investment contracts, may be registered by description in the manner provided in sections 44-1872 through 44-1875 if either of the following applies:

1. If such securities are commodity investment contracts or commodity option contracts and the financial condition of the party filing the registration statement meets the requirements specified by any rule of the commission.

2. If securities are of an issuer that both:

(a) Has been in continuous operation for not less than three years.

(b) Has shown, for a period of not less than three years during the five years prior to the date of registration, average annual net income adjusted by adding back interest expenses net of applicable income tax benefits arising therefrom of securities to be retired out of the proceeds of sale, as follows:

(i) In the case of interest-bearing securities, not less than one and one-half times the annual interest charges on the securities and on all other outstanding interest-bearing securities of equal rank.

(ii) In the case of securities having a specified dividend rate, not less than one and one-half times the annual dividend requirements on the securities and on all outstanding securities of equal rank.

(iii) In the case of securities wherein no dividend rate is specified, not less than five per cent calculated by dividing the adjusted average annual net income by the product of the number of all outstanding securities of equal rank at the completion of the offering and the maximum price at which any of the securities are to be offered for sale.

B. An issuer who owns more than fifty per cent of the outstanding voting stock of a corporation is permitted to include the earnings of the corporation applicable to the payment of dividends on the stock so owned in the earnings of the issuer of the securities being registered by description.

Notes of Decisions

Cited in 5 cases, 1975–2016 · leading case: Arizona Corp. Comm'n v. Media Prods., Inc., 763 P.2d 527 (Ariz. Ct. App. 1988).

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Arizona Corp. Comm'n v. Media Prods., Inc., 763 P.2d 527 (Ariz. Ct. App. 1988). · cites it 2× “offers to purchase were made and accepted out-of-state, and (iii) no sale or offer of sale was made to any resident of Arizona? Arizona Revised Statutes § 44-1841(A) reads: Sale of unregistered securities prohibited; classification It is unlawful to sell or offer for sale within…”

State v. Tober, 841 P.2d 206 (Ariz. 1992). · cites it 2× “Black did not register the notes with the Arizona Corporation Commission under A.R.S. §§ 44-1871 to -1875 or under A.R.S.”

Geiler v. Arizona Bank, 537 P.2d 994 (Ariz. Ct. App. 1975). “…for sale within or from this state any securities unless such securities have been registered by description under §§ 44-1871 through 4A-1875 or registered by qualification under §§ 44-1891 through 44-1900, except securities exempt under § 44-1843 or securities sold in…”

Butler v. Am. Asphalt & Contracting Co., 540 P.2d 757 (Ariz. Ct. App. 1975). “Section 44-1871 through 44-1875 or registered by qualification under A.”

Shudak v. Azcc (Ariz. Ct. App. 2016). · cites it 2× “) section 44-1941 (2016),2 and the membership units transferred were unregistered, see A.R.S. §§ 44-1871, -1891. Promotional materials Shudak provided stated the funds invested would be used to purchase and develop real property.”

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