If you plan to open a standard or Professional LLC in Arizona but are unsure where to begin, this introductory guide might be a good starting point.
Forming an Arizona LLC is not too complex but it does require some very specific knowledge. This article touches on the key steps, forms, and fees involved in the process of launching an Arizona limited liability company as well as requirements for ongoing compliance and retaining your good standing with the state.
And if it’s your first LLC, Arizona-based or not, you might want to look into LLC formation services, the hiring of which is examined in more detail below.
How to Start an LLC in Arizona: What To Do?
- How to Start an LLC in Arizona: What To Do?
- Maintain Your Arizona LLC
- Get Help Registering an LLC in Arizona
Name an Arizona LLC
If you’ve made a decision to create an LLC in Arizona, the first step towards realizing your business plan is to come up with a good name. Make sure to devise something memorable and inventive since your final choice will end up on all your promotional material. It’s also vital to keep the business name for Arizona LLC compliant.
According to the state’s Corporation and LLC Name Requirements, a name should:
- Include the company’s designation, in this case:
- “limited liability company”;
- “limited company”;
- Avoid other business structure indicators like “corporation,” “association,” “incorporated”;
- Avoid words like “bank”, “credit union,” or “trust company” that require additional permits;
- Be available, i.e. not already taken by another company. To check your LLC name availability, feel free to use the Arizona Corporation Commission Business Search. If the name is already in use, you will have to either significantly amend it or find another one.
There are a few sure ways to make your business name more unique:
- Rearranging keywords;
- Changing, adding or removing a keyword;
- Using the singular, plural, or possessive form of a keyword;
- Adding, removing, or changing conjunctions or prepositions;
- Using unique spellings;
- Using the abbreviated or unabbreviated form of a keyword;
- Using certain symbols instead of words, like $;
- Adding or removing the word “Arizona”.
If you already have a valid and fully compliant name but don’t plan to launch any time soon, the state allows you to reserve your option.
Name reservation in Arizona is valid for 120 days, ensuring that no other company registers under your name. The rates for this service vary with the application method.
Online reservation is naturally the easiest way to apply, though its fast turnaround times will cost you $35 per filing.
You can also submit your Application to Reserve LLC Name by mail. After downloading the form, send the filled printout along with your $10 check to:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Appoint a Statutory Agent For an LLC
A statutory agent, also known as the LLC registered agent, is an intermediary between the company and the state. Through their lines of connection, the company will be able to receive lawsuit papers or legal documents without any mishaps.
According to the Arizona State Legislature Section 29-3115, all owners are required to choose a statutory agent for Arizona LLC before registering the business itself. The Statutory Agent Acceptance form should be filed along with the actual Articles of Organization.
On the Arizona Corporation Commission FAQ page, you will also find regulations regarding the Arizona statutory agent, specifically that almost any individual or legal entity can perform these duties. For an individual statutory agent, the requirements are as follows:
- Be an AZ resident;
- Have physical Arizona address;
- Be 18 years of age;
- Have the ability to be present at the registered office during standard business hours to receive official correspondence.
If you’d rather work with a professional statutory agent service, there are plenty of affordable options like Northwest Registered Agent or ZenBusiness. Either of them can not only set up LLC in Arizona but also provide 1 year of a free statutory agent.
File the AZ Articles of Organization
One of the establishing pieces of paperwork behind an LLC is its Articles of Organization. Only after filing this document can a company commence legal operations.
A typical Arizona LLC Articles of Organization includes:
- LLC’s name;
- Business address;
- Organizer’s name, address, and signature;
- Statutory agent’s name, address, and completed acceptance form (M002);
- Type of management, such as manager-managed or member-managed, etc.
The Arizona LLC formation process starts as soon as you file this form which you can do online, by post, or in person.
To do your filing online, simply register or log into your account on the eCorp homepage and provide your information for the application. When you file LLC online, all documents are processed immediately, but the filing fee goes up to $85.
Download the paper application form, fill and print it out then send it to:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Along with the form, you must also send your $50 LLC filing fee check and the cover sheet which you can find on the eCorp website. Paper applications are reviewed within 6-9 business days.
Phoenix residents and visitors can file in person at the same address. The fee for this method is also $50. Average processing time is also 6-9 business days but there is a way of getting an LLC within 3-5 business days for an extra fee.
Prepare an Operating Agreement for an Arizona LLC
Having a concrete set of guidelines makes doing business in Arizona not only easier but also more stable. Though this is one of the main reasons for drafting an operating agreement, this document comes with a whole range of benefits, including:
- Separating the owners’ personal and Arizona LLC’s assets to reinforce the “corporate veil” liability protections;
- Allocating membership rights and responsibilities to provide internal structure and avoid disputes;
- Raising your legitimacy in the eyes of your customers, partners, banks, courts, etc.
- Bypassing the state’s default laws that are often too general in nature to take the specifics of your business into consideration.
To sum up, although the operating agreement is not necessary to launch an LLC in Arizona, creating one will help your business along the way. You can go two ways about drafting one:
- Doing it yourself, which is a more affordable method, and you can even use one of the dozens of free templates available online; still, a better option would be using one of the operating agreement templates offered by formation companies like ZenBusiness;
- Hiring an attorney to draft your Arizona LLC operating agreement which is by far the most effective but costly option that yields a detailed and custom-tailored document.
Meet the Arizona LLC Publication Requirement
One of the few unique stages of an Arizona LLC registration is an ad publication. As one of the three states that still have LLC publication requirements, Arizona mandates every LLC owner to do the following:
- File your notice of LLC formation within 60 days of opening an LLC. This should be done with one of the state periodicals from the state-approved list of newspapers. The paper should also circulate in the county of your company’s registered office. The Notice of Formation should include the following information:
- LLC’s name;
- The name and address of Statutory Agent;
- The address of the LLC’s principal place;
- Whether LLC is member-managed or manager-managed;
- The name and address of either LLC manager or each member of an LLC.
- Run your Arizona’s LLC publication for at least 3 consecutive weeks;
- After the newspaper issues your Affidavit of Publication, submit it with the state as proof of publication.
The cost of this service depends on the type of publication and could run between $30 to $300 per ad.
Note that LLC offices in Maricopa or Pima counties are exempt from this requirement.
Get an EIN for an Arizona LLC
After you register an LLC, your next job is to do everything to ensure its effective operation. For this reason, most Arizona LLC businesses require EIN. This unique nine-digit number is designed to be your company’s personal ID assigned by the IRS.
Employer Identification Number in Arizona is legally required for companies that:
- Have more than one member;
- Employ regular staff;
- Pay taxes;
- Plan to open business bank accounts.
For more details, check out available EIN information on the IRS website. You can file for an Arizona LLC EIN by mail, fax, in person, or online. It’s free regardless of the method.
Online applications are the easiest to complete and the fastest to get processed since the EIN will be assigned almost immediately. Note that the IRS accepts online applications only between 7 a.m. and 10 p.m. EST. You will also need a valid Social Security Number to apply.
Download Form SS-4, fill it out, and send the printout to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
The processing period for this method is about 4 weeks.
You can also fax the completed Form SS-4 to:
Fax applications also take about 4 weeks.
Maintain Your Arizona LLC
LLC Business Permits and Licenses in Arizona
As soon as your Articles of Organization get approved, your business can be considered official. However, most LLCs will also need to obtain a license or permit to conduct transactions.
The types and number of Arizona permits and licenses often depend on your location and occupational field. They can be applied on three levels:
- Federal: visit the US Small Business Administration (SBA) website for more information;
- State: check out the local Licensing Guide before launching an Arizona LLC;
- Local: municipal and county governments set their own licensing regulations, so be sure to contact your local county clerk for more details.
Unlike some states, you don’t need to obtain a general business license to conduct LLC in Arizona. But if your company sells goods and services or pays the Transaction Privilege Tax, you will need to apply for the Transaction Privilege Tax license.
You may also require a specific professional or occupational licensure depending on your industry. Visit the Arizona Department of Revenue website to learn more on the subject.
Open a Bank Account for an Arizona LLC
To keep accounts in order as well as separate business finances from your personal ones, your business will need its own bank account.
Opening an LLC bank account is simple. After the registration, LLC documents need to be submitted for an application with any local branch of the bank of your choice. They include:
- A copy of the Articles of Organization;
- The LLC operating agreement;
- Banking resolution;
Tax Filing Requirements for LLCs in Arizona
After you make an LLC and start doing business, be aware of some of your new responsibilities, specifically paying Arizona LLC taxes. Filing them on time is key to maintaining your good standing.
Most LLCs are not classified as independent tax entities and are therefore exempt from federal income taxes. Instead, LLC owners file company profits and losses on their personal 1040 tax returns and/or Schedule C. Any LLC has the right to elect a corporate taxation system by applying with the IRS, though this option is not exactly popular due to double taxation.
Any LLC operating in Arizona is exempt from federal filings as well as business-related Arizona state taxes.
Some municipalities impose their own taxes. Contact your local county clerk or visit the official website of your local government for more information.
Aside from these three levels, some additional taxes may apply depending on your LLC type. Companies that sell goods and services are subject to the Transaction Privilege Tax and Use Tax, whereas businesses with regular employees have to pay the Unemployment Insurance Tax and withholding employee taxes.
Get Help Registering an LLC in Arizona
Although it’s perfectly possible to set up an Arizona business on your own, many entrepreneurs choose to avoid the hassle of it all by outsourcing this step.
If you look for a reliable provider, be sure to check out our Top 7 LLC services list of companies that can help you apply for LLC in Arizona. All of these options have plenty of experience supported by thousands of positive reviews.
Companies like ZenBusiness or Northwest Registered Agent also grant a whole year of free registered agent with any formation package. And with IncFile, you can get a free LLC in Arizona and free registered agent for one year even with their $0 starter package.