Having an Arizona LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Arizona.
On this page, you’ll learn about the following:
- How to Start an LLC in Arizona
- After Starting your Arizona LLC
- Arizona Foreign LLC
- Why an LLC in Arizona
- Arizona LLC Formation Review
How to Start an LLC in Arizona
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Arizona.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Arizona, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Arizona business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face many issues by avoiding focus on choosing a business name for their LLC business formation filings.
Here are some of the major benefits of choosing the best LLC names.
- Helps establish a company’s presence in the market;
- Creates a new identity that will resemble your LLC;
- Allows ease in finishing your LLC registration process;
- You can get the EIN once you have your name registration certificate
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Arizona. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Arizona. The cost of a name reservation is $45 (online) and $10 (by mail).
Important Quick Links:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007
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Step 2: Assign a Registered Agent in Arizona
A registered agent for service is your authorized person or business entity that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Arizona. Choosing an Arizona registered agent for your LLC is required.
Make sure your registered agents are residents of Arizona. It could also be a business. Here are the recommended agents :
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$49 + State Fees
$299 + State Fees
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Arizona. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Arizona
A Certificate of Name Reservation is needed to file your Arizona formation certificate or what is also called a Certificate of Organization, as other states call it. You need to make reports of this certificate with the Arizona Corporate Commission. You may file them online. It’ll cost you some $50, which makes up the majority of the LLC cost in Arizona. That is topped with other expenses, of course.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Arizona, like if it is a member-managed or managers-managed.
Before you start processing the government filings, you must already have your LLC name and registered statutory agent and employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Arizona LLC will offer.
How to File Online
Go to the eCorp Online Service. If you have no account yet with the eCopr, create one so that you can access all the features that would allow you to file forms. Once you’re in, complete the Articles of Organization form and submit it. To know more about online filing, visit the Arizona Article of Organization.
How to File by Mail
If you prefer filing real-life forms for your Arizona LLC registration, then you can download the Arizona Limited Company Certificate of Formation. You may also file in person by visiting the office on business days. There are other forms to be submitted along with the Arizona Article of Organization.
Mail To: Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Step 4: Meet Arizona LLC Publication Requirements
Any newly formed LLC must meet the newspaper publication requirement of Arizona: The LLC must publish a Notice of LLC Formation. This should be done in three consecutive weeks in any approved newspaper in Arizona. Do this within 60 days upon formation.
Step 5: Create Your Arizona LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship or partnership and operating procedures of your LLC. This internal document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
You are not required to have a comprehensive LLC operating agreement in Arizona when starting an LLC, but it is ideal to have one that contains all the details of your business operation. This document would be useful if you decide to dissolve Arizona LLC later.
Step 6: Filing an Arizona LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Arizona LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Arizona LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Arizona business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Arizona LLC annual report or biennial report
- Already existing LLCs that wish to operate in Arizona must register as Arizona foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Arizona Foreign LLC
To register an Arizona foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Arizona. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Arizona Foreign LLC to know more about having a foreign LLC.
Why an LLC in Arizona
Arizona is located in the western part of the nation. Industries such as copper mining, cotton trading, fruits, tourism, and ranching, Arizona has become one of the diverse economies in America. Starting an LLC in Arizona is easy and hassle-free. Mostly, there are many incentives and tax credits that encourage people to start their businesses in Arizona.
- Angel Investment Tax Credit – An individual can enjoy up to 35% of the total investment as an incentive under this program. An investment made to the ‘Bioscience Enterprises’ will qualify for this program and enjoy tax benefits.
- Innovative Programs – To encourage innovative challenges, the Arizona state offers an Innovative Challenge Grant. Up to $1.5 million can be received under this program to encourage tech innovations in the initial stage.
- Various Other Incentive Programs – Foreign Trade Zone, Small Business Innovative Research, Healthy Forest Enterprise, Arizona Job Training program, and other programs are available in the state. Under these programs, entrepreneurs can enjoy tax incentives while starting an LLC.
Enterprise Zone Programs
Like Alabama, there are some Enterprise zones in Arizona. If your LLC is operating or located in those specific areas, you may qualify for financial support. The local government provides various incentive programs to entrepreneurs to encourage more business and economic improvement of the under-developed areas.
Best Business Opportunities in Arizona
If you want to form an LLC in Arizona, then what to do must be the first question you need the answer to. Many businesses are successfully established in Arizona and are contributing to the GDP of the state, but there are some new rising businesses. The list of such businesses is mentioned below.
Interior Designing Business
If you have some good combination-making skills and love to decorate homes and places, you can choose the interior designing business. It is one of Arizona’s best and flourished businesses as the prices people are ready for pay per hour are very high. All you need to have is some skills and convincing powers, and you are all set to go.
AC Installation And Repairs Business
If you look at Arizona’s weather condition, it is one of the hottest states in the United States of America. That is why the requirement for air conditioning is very high in this state. If you are thinking of starting a new LLC in Arizona, you can pick up the option of AC installation. Also, it is advised that you create a repair service as it is a recurring service that will make you more money.
Beverage business is also the best choice for an LLC startup in Arizona. These businesses are deficient in maintenance and high demand in the state. Due to high-temperature people almost consume a soft and hard drink with their food, due to which this business is also in high demand.
Bike Rental Businesses
Many tourist attraction places in Arizona bring people to the state to spend their holidays. Now every person can’t get their vehicle, and everyone knows that vacation with their vehicle is the best. That is why the bike renting business is also becoming an excellent choice among people.
Some other small business ideas are:-
- Lawn maintenance Business
- Delivery Business
- Tech Repair Business
Arizona LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Arizona. Click on the steps in this list to read the full detail.
- Name your Arizona LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered statutory agent
In Arizona, it is mandatory to select a registered statutory agent for service to your corporation. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Meet newspaper publication requirements
You are required to publish the formation of your LLC in several publications.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number for taxation of a corporation.
If you are a resident of Arizona, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $150 (foreign LLC), LLC costs in Arizona include $30-$300 for the Publication fee. LLCs are liable to pay sales tax of 5.6% every year
It takes 30 business days to get an Arizona LLC if you file it online or via mail. With an additional fee, it can be done sooner.
Every year all the LLC have to submit an Annual Report to the Arizona Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.