How to Start an LLC in Arizona | 2024 Guide

Start a LLC in Arizona

How to Start an LLC in Arizona: If you’re looking to launch a business in Arizona, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Arizona. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Arizona, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in Arizona

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Statutory Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Arizona

After you have decided on the idea to form an LLC in Arizona, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Arizona, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in Arizona Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Arizona DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in several methods. Check Arizona Trade Name Handbook for more details. However, before filing a DBA, you should know that you need to renew your DBA from up to five years, which costs around $10 for filing and $3 for each duplicate copy.

Step 2: Hire a Statutory Agent in Arizona

Hiring a Statutory Agent in Arizona is a must since a Statutory Agent is a person or business entity responsible for receiving important legal documents on behalf of your Arizona LLC. Most states require you to designate a Statutory Agent when forming your LLC.

The qualifications of a Statutory Agent vary depending on the jurisdiction. Still, generally, a Statutory Agent must meet the following criteria:

  • Availability: A Statutory Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Statutory Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Statutory Agent, they must be residents of the Arizona where the LLC was formed. A business entity acting as a Statutory Agent must be authorized to do business within that state.
  • Age: A Statutory Agent must be at least 18 years old.
  • Good standing: A Statutory Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Statutory Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Statutory Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Arizona Statutory Agent Services.

Step 3: File your Articles of Organization in Arizona

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Arizona Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Arizona.

1. Obtain the Necessary Forms: Visit the Arizona’s business filing office website, usually the Arizona Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Arizona Corporation Commission, Corporate Filings Section, 1300 W. Washington St., Phoenix, AZ 85007.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $50. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Arizona, typically a stamped and approved copy of the document or a Articles of Organization.

Recommended: Filing formation papers is easy and hassle-free if you hire a professional service. We recommend using –

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Once you have successfully filed your Articles of Organization and it has been approved, your Arizona LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Arizona Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Arizona.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Arizona. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Arizona can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Arizona might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Arizona LLC.

Opening a bank account is necessary for Arizona business. If you are still wondering where to open an account in your Arizona, you should check the Best Bank for Small Business in Arizona.

Step 7: Get a Business and License Permit

You must get a business license in Arizona before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Arizona ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Arizona Secretary of State.

Cost to Form an LLC in Arizona

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Arizona. Articles of Organization costs around $50. The initial filing fee is $50, and the annual fee is $0.

If you forget to pay the annual fee for your Arizona LLC, you will have a penalty of $0 (not required). However, you can check the Arizona LLC Cost for additional information.

Advantages of Creating Arizona LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Arizona. Important benefits will help you set up an LLC in Arizona.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Arizona apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Arizona with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Arizona can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Arizona will protect its assets.

FAQs

What is an LLC?
An LLC stands for a limited liability company, which is a type of business structure that protects business owners’ personal assets from being used to pay off business debts and obligations.
How do I start an LLC in Arizona?
To start an LLC in Arizona, you need to file Articles of Organization with the Arizona Corporation Commission and pay a filing fee.
What is the filing fee for an LLC in Arizona?
The filing fee for an LLC in Arizona is currently $50.
How long does it take to form an LLC in Arizona?
It usually takes 5-10 business days to form an LLC in Arizona.
Do I need an attorney to start an LLC in Arizona?
No, you do not need an attorney to start an LLC in Arizona. However, you may want to consult with an attorney if you have specific legal questions.
Do I need to be an Arizona resident to start an LLC in Arizona?
No, you do not need to be an Arizona resident to start an LLC in Arizona.
Can I operate my LLC from another state if I form it in Arizona?
Yes, you can operate your LLC from another state if you form it in Arizona.
Do I need to file a state tax return for my LLC in Arizona?
Yes, you will need to file a state tax return for your LLC in Arizona.
How do I get an Employer Identification Number (EIN) for my LLC in Arizona?
You can get an EIN for your LLC in Arizona by applying online with the IRS or by submitting an SS-4 Form by mail or fax.
How much does it cost to get an EIN for my LLC in Arizona?
Getting an EIN for your LLC in Arizona is free.
How many members can an LLC have in Arizona?
An LLC in Arizona can have one or more members.
Do members of an LLC in Arizona have personal liability for the company’s debts and obligations?
No, members of an LLC in Arizona have limited liability for the company’s debts and obligations.
Can I have a single-member LLC in Arizona?
Yes, you can have a single-member LLC in Arizona.
Are there any annual reporting requirements for LLCs in Arizona?
Yes, Arizona LLCs must file an Annual Report with the Arizona Corporation Commission each year.
When is the Annual Report due for an LLC in Arizona?
The Annual Report for an LLC in Arizona is due by April 15th of each year.
Does an Arizona LLC require a business license?
Most businesses in Arizona require a transaction privilege tax license (TPT), which serves as the state’s business license.
How do I register for a TPT for my LLC in Arizona?
To register for a TPT for your LLC in Arizona, you will need to apply online with the Arizona Department of Revenue.
Are there any other licenses or permits I need to run my LLC in Arizona?
Depending on the nature of your business, you may need additional licenses or permits at the local or state level.
What is the Arizona Corporation Commission?
The Arizona Corporation Commission is the official state agency that regulates and oversees Arizona’s business entities.
Can I use a registered agent service for my LLC in Arizona?
Yes, you can use a registered agent service for your LLC in Arizona.
What is a registered agent?
A registered agent is a person or service that is appointed to receive official legal and tax correspondence on behalf of a business entity.
Do I need to have a business address in Arizona to start an LLC in Arizona?
Yes, you will need to provide a physical address in Arizona to start an LLC in Arizona.
Can I use a PO Box as my business address for my LLC in Arizona?
No, you cannot use a PO Box as your business address for your LLC in Arizona.
What are the benefits of forming an LLC in Arizona?
Some benefits of forming an LLC in Arizona include limited liability protection, pass-through taxation, and less formalities compared to other business structures.
Can I change the name of my LLC in Arizona after it has been formed?
Yes, you can change the name of your LLC in Arizona by filing an Amendment with the Arizona Corporation Commission.
Can I dissolve my LLC in Arizona if I no longer want to operate it?
Yes, you can dissolve your LLC in Arizona by filing Articles of Dissolution with the Arizona Corporation Commission.
What happens if I don’t file my LLC’s Annual Report on time in Arizona?
If you don’t file your LLC’s Annual Report on time in Arizona, you may be subject to late fees and penalties.
Is my LLC’s personal information publicly available in Arizona?
Most LLC personal information is public record in Arizona, including the LLC’s name, address, and registered agent information.
What does LLC stand for?
LLC stands for Limited Liability Company.
Are there any residency requirements to start an LLC in Arizona?
There are no residency requirements to start an LLC in Arizona.
Do I need a registered agent to start an LLC in Arizona?
Yes, every Arizona LLC needs a registered agent.
What is a registered agent in Arizona?
A registered agent in Arizona is a person or entity that is designated to receive legal and other important documents on behalf of a business.
Can I use a PO Box as my address for my Arizona LLC?
No, you cannot use a PO Box as your Arizona LLC’s business or mailing address.
Is a business license required to start an LLC in Arizona?
Most Arizona cities require a business license to operate, but a state-level business license is not required to start an LLC in Arizona.
How long does it take to start an LLC in Arizona?
After submitting the Articles of Organization, it can take anywhere from a few hours to a week to register a new LLC in Arizona.
How much does it cost to start an LLC in Arizona?
The total cost of starting an LLC in Arizona is currently $60.
What is the minimum number of members required to start an LLC in Arizona?
Arizona LLCs can have one or more members.
Can a minor be a member of an Arizona LLC?
No, minors cannot be members of an Arizona LLC.
Can a non-US citizen start an LLC in Arizona?
Yes, a non-US citizen can start an LLC in Arizona.
How often do I need to file an Annual Report for my Arizona LLC?
Arizona LLCs need to file an annual report every year.
How much does it cost to file an Arizona LLC’s Annual Report?
The current fee for an Arizona LLC’s Annual Report is $45.
What is the tax rate for Arizona LLCs?
The tax rate for Arizona LLCs is based on the personal income tax rate of the LLC members.
Can I change my Arizona LLC’s name after it is formed?
Yes, you can change the name of your Arizona LLC by filing Articles of Amendment.
What is a publication requirement for Arizona LLCs?
Arizona LLCs are required to publish a notice of formation in a newspaper of general circulation in the county of the LLC’s principal place of business.
Are there any industry-specific regulations for starting an LLC in Arizona?
Yes, Arizona has industry-specific licensing and regulatory requirements for certain professions.
What is a Single-Member LLC?
A Single-Member LLC is an LLC that has only one member.
How is a Single-Member LLC taxed?
Single-Member LLCs are taxed similarly to sole proprietorships.
Can an Arizona LLC be taxed as an S corporation?
Yes, Arizona LLCs can elect to be taxed as an S corporation.
How is a manager-managed LLC different from a member-managed LLC in Arizona?
In a manager-managed LLC, one or more non-member managers are responsible for the management of the LLC, while in a member-managed LLC, all members share responsibility for the management.
Can an Arizona LLC change its organizational structure from member-managed to manager-managed?
Yes, Arizona LLCs can change their organizational structure from member-managed to manager-managed by amending the Operating Agreement.
Can an Arizona LLC be owned by another LLC?
Yes, an Arizona LLC can be owned by another LLC.
What is a Foreign LLC?
A Foreign LLC is an LLC that was formed outside of Arizona and has registered to do business in Arizona.
Is a Foreign LLC required to obtain an EIN to do business in Arizona?
Yes, a Foreign LLC is required to obtain an EIN to do business in Arizona.
What is an Operating Agreement?
An Operating Agreement is a written agreement that outlines the ownership, management, and operating procedures of an LLC.
Can an LLC have multiple Operating Agreements?
No, an LLC can only have one Operating Agreement at a time.
Is an Operating Agreement legally required for every Arizona LLC?
Although not required by law, it is highly recommended to have an Operating Agreement for an Arizona LLC.

Also Read

How Fast Can I Form an LLC in Arizona

One of the first steps in forming an LLC in Arizona is selecting a business name. The name you choose must be unique and distinguishable from other businesses operating within the state. Conducting a name search through the Arizona Corporation Commission’s website can help verify the availability of your desired business name.

Once you have secured a business name, the next step is filing Articles of Organization with the Arizona Corporation Commission. This document formally establishes your LLC and includes important information such as the name of the LLC, the address of the LLC’s principal place of business, and the name and address of the LLC’s registered agent.

After submitting the Articles of Organization, Arizona typically processes the paperwork within a few business days. However, processing times may vary depending on the volume of filings received at any given time. It is important to check the current processing times on the Arizona Corporation Commission’s website to get an accurate estimate of how long it will take for your LLC to be officially formed.

Once your Articles of Organization have been approved, you will receive a Certificate of Organization from the Arizona Corporation Commission. This document serves as proof of your LLC’s existence and should be kept in a safe place for future reference.

While forming an LLC in Arizona can be a relatively quick process, it is important to take the necessary steps to ensure that your LLC is compliant with all state regulations. This includes obtaining any necessary licenses or permits, creating an operating agreement, and obtaining a federal Employer Identification Number (EIN) from the IRS.

Overall, forming an LLC in Arizona can typically be done within a matter of days if all necessary steps are completed accurately and in a timely manner. By understanding the process and taking the right steps, you can have your Arizona LLC up and running quickly and efficiently.

In conclusion, understanding the process of forming an LLC in Arizona can help expedite the timeline for establishing your business. By following the necessary steps and complying with all state regulations, you can form your LLC in a timely manner and begin operating your business with confidence.

Conclusion

In conclusion, starting an LLC in Arizona is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Statutory Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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