Starting a business in Arizona can be a great way to get your feet wet in the world of entrepreneurship. There are several steps that you need to take to start your own business, and this guide will provide a guide on how to do just that. This guide will cover everything from choosing the right business structure to obtaining the proper licenses and permits. So if you’re ready to take the plunge into self-employment, keep reading for our step-by-step guide on how to start an LLC in Arizona.
Benefits of starting an LLC in Arizona
There are several benefits to starting an LLC in Arizona, particularly if you’re just getting started.
Limited Liability Protection
There are many benefits to starting an LLC in Arizona. The most significant benefit is the limited liabilities that come with this structure. For example, when you form an LLC in Arizona, your LLC will only be responsible for its own debts and not any of yours, so if someone decides to sue you personally due to some kind of mishap, your individual assets will not be at risk.
Another advantage of an LLC is that it can be taxed as a sole proprietorship, partnership, or corporation. This gives you a choice to decide how your LLC wants to be treated for tax purposes.
Thanks to LLCs in Arizona being very flexible, setting up your LLC will be relatively simple. Once you have decided on the proper business structure, forming your LLC will be a straightforward process.
Many business structures in Arizona are taxed as a pass-through entity, which means that the LLC itself does not pay taxes. Instead, all of the profits and losses from your company will be passed onto you personally and then put on your annual tax return. This means that you will only be taxed once at both the business and individual levels.
Arizona LLC Rules & Requirements
As you may have guessed, some specific rules and requirements need to be followed when forming an LLC here in Arizona. Each state has its own rules for LLCs, which are generally similar. We’ve covered the main ones below and hope that after reading this guide, you’ll be ready to get started and start your LLC today.
Best Arizona LLC Formation Services
An alternative to starting your Arizona LLC by yourself would be to use the services of an LLC company. These companies can handle all aspects of creating your LLC for you, including filing all the necessary paperwork and understanding all the rules and regulations that come along with starting an LLC in Arizona. You can check out our list of best LLC formation services here.
The following is a step-by-step guide of what you can expect when forming an LLC in Arizona:
6 Steps to Starting an LLC in Arizona
- Step 1: Name Your Arizona LLC
- Step 2: Choose a Statutory Agent in Arizona
- Step 3: File the Articles of Organization
- Step 4: Create an Operating Agreement
- Step 5: Get an EIN for your Arizona LLC
- Step 6: Arizona LLC Publication Requirements
Step 1: Name Your Arizona LLC
The first step in starting your own LLC is to choose a name for your business. In Arizona, an LLC needs to have “Limited Liability Company” or “Limited Co.” at the end of its name, so keep this in mind when searching for a company name. You can also use abbreviations of these such as “LLC,” “LLC,” “LC,” or “LC.”
Avoid using the words “Corporation,” “Incorporated,” or “Inc.” in your LLC name because these typically indicate a corporation, which is a different type of business structure. When choosing an LLC name, the most crucial factor is that it should not imply something different about the business.
Once you’ve decided on your business name, run a search at your state’s Secretary of State website. You should make sure that it is available and has not already been taken by someone else who started an LLC in AZ.
You can also consider reserving your domain name online before filing for your LLC. This will prevent other businesses from using your desired name’s domain. It only costs about $10 or less, depending on where you register.
Namecheap is a popular option for reserving your LLC name, and they have some of the best deals. Check your domain availability using their tool here. Even if you don’t want a website for your business yet, you should still consider reserving the name because it’s an excellent investment and one of the cheapest ways to prevent anyone from using it.
Step 2: Choose a Statutory Agent in Arizona
You will also need to select a statutory agent, which is the person or business that will be responsible for receiving all official legal documents on behalf of your LLC. This will be similar to a registered agent in other states.
The agent has to be someone who lives in Arizona and must have a physical address within AZ to receive legal documents during regular business hours.
You can also choose to be your own statutory agent for your LLC or choose another member of your LLC to act as the agent instead.
Alternatively, you can use a service such as ZenBusiness to handle all the paperwork for you. They give you a year of service for free with one of their LLC packages, so it’s a great deal.
Step 3: File the Articles of Organization
The next step in starting your LLC in Arizona is to file your Articles of Organization with the AZ Corporation Commission. This service costs $50 and can be done through their website or mail.
Form L010 – Articles of Organization – is the form you will need to fill out for your LLC’s initial filing.
Statutory Agent Acceptance – is the form that the statutory agent must sign.
Member or Manager Structure Attachment – is an optional form that lets you specify your LLC’s member or manager structure.
AZCC Cover Sheet – this is the cover sheet that will need to be attached with your Articles of Organization.
If you submit them by mail, send them to the following address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Step 4: Create an Operating Agreement
Once you have filed the Articles of Organization, you should think about creating an operating agreement for your LLC.
An operating agreement is simply a document that outlines how your LLC works internally. It doesn’t need to be filed anywhere, and AZ LLCs don’t need to have one. Still, it can help prevent disagreements among members or managers by having everything in writing.
The operating agreement needs to include specific information to be valid. Still, most small LLCs won’t need anything more than what you’d find in standard templates online.
Step 5: Get an EIN for your Arizona LLC
You will also need to obtain an EIN for your LLC. The EIN is like a social security number for businesses, and it’s required to open bank accounts or hire people.
You can get started by visiting the IRS’s website here. You will need to submit your business information online or mail in the appropriate forms.
If submitting by mail, send the completed application and required documents to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6: Arizona LLC Publication Requirements
One last thing you will need to do within 60 days is published your LLC Formation intent for the public to notice in a newspaper if you live outside the county of Maricopa or Pima.
Here is a list of approved newspapers from the Arizona Corporate Commission.
This information should be included when you publish your LLC formation intent:
- The name of your LLC
- Statutory Agent address and LLC address (if different)
- Declaration of Member-manager or manager-managed LLC
- The name and address of your LLC’s manager or each member
Arizona LLC Processing Time
If you file your LLC formation paperwork with the Secretary of State’s office by mail, it will take approximately 2-3 weeks for your LLC to be approved. However, if you file your LLC formation paperwork online, it will take around 3-5 business days for your LLC to be approved.
Arizona LLC Frequently Asked Questions
Do I have to renew my LLC every year in Arizona?
No, Arizona does not require LLCs to file annual reports. This is unlike most other states, which typically require LLCs to file annual reports with the state to keep the company’s status active. However, it is still a good idea for Arizona LLCs to stay up-to-date on any state or local taxes that may apply to them. Additionally, if an Arizona LLC dissolves or ceases business operations, it must file a termination statement with the state.
How long does it take to form an LLC in Arizona?
It takes 2-3 weeks for your LLC to be approved if you file through the mail and 3-5 business days if you file online.
How much does it cost to start an LLC in AZ?
It costs $50 to start an LLC in Arizona when you file a regular LLC formation. If you need your LLC formed quickly, you can file an expedited LLC formation for an additional $85.
How do I set up an LLC in Arizona?
1. Name – The name of the LLC must include the words “limited liability company” or one of its abbreviations, “LLC” or “LLC.”
2. Statutory Agent – The LLC must have a statutory agent in Arizona. The statutory agent can be an individual or a business entity authorized to do business in Arizona.
3. Articles of Organization – The Articles of Organization must be filed with the Arizona Corporation Commission.
4. Operating Agreement – The Operating Agreement is not filed with the Corporation Commission. Still, it should be kept on file by the LLC.
5. Publication Requirements – After filing your articles of organization, you’ll need to publish them in a local newspaper for four consecutive weeks.
6. EIN (Employer Identification Number) – An EIN is required for all businesses, including LLCs.
Do LLC pay taxes in Arizona?
Members of an LLC are generally classified as self-employed for tax purposes. This means they are responsible for paying self-employment tax on their share of the LLC’s income. In addition, state and federal income taxes must be paid on LLC income. Finally, some members may be required to pay sales tax on products.
Do I have to publish my LLC AZ?
Yes, within 60 days of forming your LLC. The state of Arizona requires all LLCs to publish a notice of their existence in a local newspaper for 3 consecutive weeks. There are a few exceptions – if your LLC is based in Maricopa or Pima County, you don’t have to publish as those counties have their own publication requirements.
How do I get an EIN in Arizona?
You can get an EIN online through the IRS website. You can also get a Form SS-4, Application for Employer Identification Number, from the IRS website or by mail. If you choose to apply by mail, send the completed form to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Is Arizona Good for LLC?
Yes, Arizona is a good state to start an LLC. WalletHub ranks it as the ninth-best state in the country, and Thumbtack.com has given it an A- grade. Some of the reasons Arizona is a good place to do business include its low cost of living, moderate taxes, and favorable business climate.
How long is an LLC good for in Arizona?
An LLC is good for an indefinite period in Arizona. There is no legislated time limit on the duration of an LLC. An LLC may be dissolved voluntarily by the members or involuntarily by a court of competent jurisdiction.
Does Arizona require a business license?
No, there is no state-level business license required in Arizona. However, most city and town offices issue their own business licenses, so it’s best to check with your local government office to see any specific requirements. Generally speaking, most businesses will need to obtain a zoning permit from the local government and a health permit (depending on the type of business).