How to Form an LLC in Arizona in 8 Steps
The steps for forming a limited liability company (LLC) in Arizona include naming the LLC, appointing a registered agent, filing articles of organization, obtaining an EIN for tax purposes and publishing a notice of LLC formation.
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A limited liability company (LLC) is a type of legal structure popular among small businesses. LLCs provide several advantages. These include limited liability protection, pass-through taxation, and a flexible structure. To start your LLC in Arizona, follow the step-by-step guide below.
8 Steps to Form an LLC in Arizona
Name Your LLC
It would help to choose a unique and memorable name for your LLC to make it stand out from the competition. According to the Arizona Limited Liability Company Act, your name must:
- Be available: Your LLC name cannot be the same as any other business name registered in Arizona under A.R.S. §29-3112(B).
- Designate your business as an LLC: Under A.R.S. §29-3112(A), your name must contain language that illustrates that it’s an LLC. You can use “limited liability company” or “limited company” in your name. Or, if you prefer, you can use the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.”
Research Name Availability. To find out whether your name is available, you should do a name search of the Arizona Corporation Commission’s business entity database. If there are any matches, you should choose a new business name.
Research Domain Name. It’s a good idea to check for domain name availability. Conduct an internet search to see if your business name is available as a domain name. Type the company name into an internet search engine to see if another business uses your name. If your domain name is unavailable, it may be necessary to rethink your LLC name.
Research for Trademark Infringement. If there are still no matches, you should perform a trademark search. You can run this search quickly and easily on the United States Patent and Trademark Office (USPTO) trademark database. This is a crucial step to help you avoid legal trouble for trademark infringement.
Reserve Your Business Name. If you want to reserve your LLC name before starting your LLC, you can file a name reservation application per A.R.S. §29-3113. This application goes to the Arizona Corporation Commission. If you file by mail, the fee is $10. Online filings are $45 and receive expedited service. By filing this application, you reserve your LLC name for 120 days.
Get a Statutory Agent
All Arizona LLCs must name a statutory agent under A.R.S. §29-3115. Other states refer to a statutory agent as a registered agent. A statutory agent accepts legal papers for the LLC. This includes service of process if someone sues the LLC.
In Arizona, your statutory agent must be:
- An individual who has a residential address in Arizona
- A business entity with a physical address in Arizona
Your statutory agent must have a physical street address, not a P.O. Box. They must also sign a Statutory Agent Acceptance form. This form certifies that they accept the appointment. After they sign it, you should mail or fax it back using the contact details listed on the form. There is no associated fee.
File Your Articles of Organization
Arizona LLC formation takes place when you file a legal document called articles of organization with the Arizona Corporations Commission. The articles of organization are like a charter that formally establishes your LLC as a legal entity. This is not a complex document to draft. The state of Arizona even provides a fill-in-the-blank form for this purpose. To complete your articles of organization under A.R.S. §29-3201, you will need to provide the following information:
- Your LLC’s name and principal address
- Your statutory agent’s name and address
- A statement on management structure (whether the LLC is member-managed or manager-managed)
- A $50 filing fee
You can file your articles of organization by fax or mail by filling out a hard copy of the form. You will then mail or fax it back to the Arizona Corporation Commission. If you prefer, you can file this form online at the Arizona Corporation Commission’s website. Before proceeding, you will need to log in or create a new account on the website.
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Note: The Arizona Corporation Commission now requires two forms of ID for a person to file on behalf of a business.
Draft an Operating Agreement
Although you are not legally required to have an LLC operating agreement, it’s wise to create one. The operating agreement is a crucial legal document. It forms a contract among your LLC members. In it, you will agree on issues like:
- LLC management
- Ownership percentages
- Member rights and responsibilities
- Voting procedures
- Procedures for adding or removing members
- Anything else that’s important to your business
An operating agreement promotes more organized operations within your business. Clear LLC rules can help to prevent future disputes among members too. Even single-member LLCs should have an operating agreement. This document helps to show that you treat your LLC as a legal entity separate from yourself. Financial institutions and professionals may also ask to see your operating agreement. You might need to show it to them to open a business bank account or provide you with services.
Get an EIN
You must file for an Employer Identification Number (EIN) if you have a multi-member LLC or plan to hire employees. An EIN is a tax identification number that the Internal Revenue Service (IRS) issues to businesses. They use this number to identify companies for tax purposes. In this sense, it’s like a Social Security number for your LLC. You will need an EIN to open a business bank account, apply for a company credit card, and hire employees. Applying for an EIN with the IRS is easy and free by fax, mail, or online.
Set Up Business and Tax Accounts
Your tax obligations and licensing needs will depend on the location and nature of your business. It’s vital to follow licensing and tax laws to keep your business in good standing and avoid legal hassles down the line.
The Arizona Department of Revenue provides consolidated information about business taxes and licensing. Some businesses will not need licenses, but others could need several. You should check the Small Business Administration (SBA) website to see if you need federal licenses. You can find out which types of business activities are federally licensed. Visit the IRS website to learn more about your LLC’s federal tax obligations.
Publish a Notice of LLC Formation
Although it may seem old-fashioned, Arizona requires LLCs to alert the public of their existence with a newspaper notification. You will receive an LLC approval letter from the Corporation Commission when they approve your articles of organization. Within 60 days of this approval, you must publish a notice of LLC formation in an Arizona newspaper.
According to Arizona law, your notice must appear in a newspaper generally circulated in the Arizona county where your statutory agent resides. The notice must appear for three consecutive issues. If you have any trouble publishing your notice, you should review your approval letter. The approval letter will contain instructions to help you with the publication requirement.
The exception to the publication requirement will be if your statutory agent is in Maricopa or Pima county. The Corporation Commission automatically publishes a notice on its website for those counties. In doing so, it fulfills your requirement.
Check for Additional Federal or State Requirements
Check state and federal websites to determine if there are any specific rules for your business. For example, some LLCs may have to file a Beneficial Ownership Information Report (BOIR) with FinCEN. Under current law, LLCs created in the United States are “domestic reporting companies” and are exempt from the BOIR requirement.
However, laws may change, so stay up to date with state and federal requirements.
Business and Tax Requirements in Arizona
When business owners start an LLC in Arizona, they must register for LLC tax and business accounts in the state. Arizona has a Joint Tax Application (Form JT-1) to apply for a transaction privilege tax (TPT), use tax, employer withholding, and unemployment insurance.
State Business Tax
If the LLC elects for pass-through taxation, the LLC profits go on the member’s personal tax returns. Only if the LLC elects corporate status does the LLC have to pay Arizona corporate taxes on the LLC income.
State Employer Tax
You must set up employer withholding accounts and unemployment insurance if you have employees. You can set up these accounts when registering your new business with the Arizona Department of Revenue. Additionally, you must:
- Report new hires within 20 days of their hire date with the Arizona Department of Economic Opportunity
- Provide worker’s compensation to employees
Transaction Privilege Tax
If you are a vendor, you may need to apply for the transaction privilege tax (TPT) with the Arizona Department of Revenue. The TPT is not exactly a sales tax but a tax for the privilege of selling in Arizona. You can register for a TPT account when you set up your new business with the Arizona Department of Revenue.
Business Licenses and Permits
Your business operations and location determine the licenses and permits your business needs. Arizona does not have a state business license. However, your LLC may need to register for a business license or permit in the city and county in which it operates. The Arizona Commerce Authority has more information about the licenses and permits for your business.
Registration in Other States
If you want to do business in another state, contact that secretary of state’s office to register as a foreign LLC. They may request a certificate of good standing to prove your LLC is compliant with Arizona’s corporate laws. The fee for a certificate of good standing is $10.
Annual Requirements in Arizona
The Arizona Corporation Commission does not require your LLC to file annual reports or pay annual fees to keep your LLC in good standing.
Arizona LLC FAQs
The filing fee for the articles of organization is $50.
- Single-member LLC. If you create an Arizona LLC alone as a solo entrepreneur, it is called a single-member LLC.
- Multi-member LLC. If two or more people create an LLC, it is called a multi-member LLC.
- Professional LLC. A professional limited liability company (PLLC) is an LLC formed by certain types of specified professionals, including physicians, dentists, accountants, lawyers, and more. The same Articles of Organization form is used to create this type of LLC.
The articles of organization is the initial document you file to establish your LLC in Arizona. In other states, it is called "articles of formation" or "certificate of organization." It is proof your LLC exists and that the Arizona Corporations Commission approved it. You may need your articles of organization to open business bank accounts, credit card merchant accounts, apply for business licenses, etc. You can request a copy of the certificate of formation from the Corporations Commission. The fee is $5 plus 50 cents per page. If you want a certified copy, the fee is $15 plus 50 cents per page.
A certificate of good standing confirms your LLC is in Arizona and compliant with state law. Arizona does not require a certificate of good standing, but your business may need it to apply for government projects, register as a foreign LLC, or apply for a loan. You can obtain one through the eCorp portal or by mail using a records request form. The state fee is $10 or $15 for a certified copy.
To form an LLC in Arizona, you must file your Articles of Organization with the Arizona Corporations Commission. You will need to choose a statutory agent and have them sign the Statutory Agent Form.
The main advantage of LLCs is the limited liability protection they offer. With limited liability protection, LLC owners’ personal assets are not at risk for company liabilities. In other words, if anybody sues your LLC or collects on its debts, they cannot come after your personal accounts, cars, or home to satisfy this liability. You will only be liable for your LLC’s obligations up to the amount you invested into the company.
Not all business structures offer this advantage. For instance, if you have a sole proprietorship, your business’s creditors could come after your personal property to cover the company’s debts. The same is true of a general partnership.
Tax treatment is another benefit of the LLC structure. LLCs have the option of pass-through taxation. This means that LLC members pay taxes on their share of the business’s profits through their personal income taxes. On the other hand, corporations can be subject to so-called double taxation. This occurs when a corporation pays taxes on its profits at the corporate level, and stockholders pay taxes on their dividends.
Arizona LLCs do not have to file annual reports with the Arizona Corporations Commission. However, you must comply with state tax and business laws to keep your Arizona LLC in good standing.
No, articles of organization form a legal document you submit to the state of Arizona to create your LLC. This document establishes the basic identifying information about your LLC.
An operating agreement is an internal company document. It forms a contract and establishes rules among your LLC members. Having an LLC operating agreement helps verify your LLC’s legitimacy as a legal entity separate from the individuals who run it. You may need to show this document to receive professional services from accountants, lawyers, and financial institutions.
Yes. To register a DBA, fictitious, or trade name, you should file a trade name application with the Arizona Secretary of State. The application fee is $10. By using the business entity database, you should first check to see if the trade name is available for use in Arizona.
There is no general business license required to do business in Arizona. However, certain professions and industries require permits or licenses. The Arizona Commerce Authority provides a checklist you can use to determine if your LLC needs a license or permit.
Yes. You can file your articles of organization online through the eCorp site.
You can complete the Arizona articles of organization and mail them to:
Arizona Corporation Commission
Examination Section
1300 W. Washington St.
Phoenix, Arizona 85007
Yes. You can use a professional registered agent service company to serve as your LLC’s statutory agent. Even though you can be your own agent, sometimes busy entrepreneurs opt for registered agents to set up and maintain their LLC’s good standing. Some advantages of using a registered agent service include:
- Keep your business private. They are the point of contact with the Arizona Corporation Commission’s office. Any lawsuits or service of process goes to them, not your business address.
- Help with your business documents. As you expand your business or register as a foreign LLC, you may need a copy of your articles of organization or certificate of good standing. They can handle this for you.
- Are available during regular business hours. Registered offices must be open during regular business hours to accept service of process. You may not always be available at your registered office.
If you form your LLC in Arizona, it is a domestic LLC. If you form your LLC in another state and then transact business in Arizona, you are a foreign LLC.
If you want to do business in another state, contact the Secretary of State in that jurisdiction to register as a foreign LLC. They may require a certificate of good standing from the Arizona Corporation Commission. Complete an application using your Arizona LLC name in that state (if it is available for use in that state) and pay their registration fee.
If you established your LLC in another state or country, you could still operate it in Arizona. But you will need to register it with the state first. To do so, you should submit a Foreign Registration Statement and a certificate of good standing from the state or country where you started your LLC. Once complete, you can return the foreign registration statement and the $150 filing fee by mail or in person to the Phoenix Corporation Commission office.
Before submitting your Foreign Registration Statement, you should check to ensure that your LLC name is available in Arizona. Run a name search at the Corporation Commission’s business entity database to check availability.
If your LLC name is unavailable, you must operate under another business name (a "trade name") in Arizona. In other states, people may call this a fictitious business name, an assumed name, or a DBA ("doing business as") name.
If you want to close your business in Arizona, there are several steps you must take to avoid penalties and tax liability:
- Follow any dissolution procedures in your LLC’s operating agreement.
- Close your business and tax accounts.
- Contact the Arizona Corporation Commission to file articles of termination.
If you want to dissolve your Arizona LLC, you can file articles of termination and pay a $35 fee.
No. Arizona does not allow anonymous LLCs. An anonymous LLC does not disclose member names on the articles of organization. The only states that allow anonymous LLCs are Delaware, New Mexico, Nevada, and Wyoming.
Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
How to Start an LLC in Other U.S. States
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