LLC in AZ: Initiating and maintaining an LLC in a state like Arizona is no doubt a complicated task. But worry not! We are here to guide you along the whole process of Arizona LLC formation and maintenance. So buckle up and follow these 7 simple steps to form your LLC in AZ.
An LLC in Arizona basically links an organization’s limited liability (as offered in a corporation or LLP) with the pliability and shortage of formalities of any sole proprietorship.
We recommend setting up an LLC in AZ for any entrepreneur whose objective is to protect personal assets from professional liabilities such as lawsuits and debts.
Not from Arizona? Learn to form an LLC in any other State.
Tip of the Day: Arizona LLC formation by yourself can be hectic and time taking. Hiring a reliable LLC formation service is an intellegent choice as it saves you from overspending and wasting your time. Therefore we recommend you
Now, what is an LLC? A Limited Liability Company (LLC) unites the best features of partnerships, sole ownerships, and corporations into one organizational entity.
It only costs almost 50 USD to initiate an LLC in Arizona.
All you’ve to do is to submit a certificate of your new business with the State Minister. An entrepreneur can either apply online, drop a mail, or visit the office in person to build a new LLC.
In this article, we will explain the LLC formation method in Arizona. So let’s get started!
Get Federal Tax Identification Number (also called EIN)
Obtain Necessary Licenses, Certification, or Permits
In the subsequent sections, we are going to discuss one by one each step in detail to make it clear for new business owners and entrepreneurs.
Step One
#1: Pick an LLC Name
The first and foremost part of building an LLC in AZ is to pick up the right company name. Try to select a name that corresponds to Arizona standards and is conveniently accessed by prospective customers.
Instructions to Follow While Naming an LLC
Every business owner should include “Limited Liability Company” to his new company or the abbreviation of it, LLC or L.L.C.
Avoid using the words that can confuses your LLC name with the government agencies, such as State Department, Treasury, FBI, etc.
Make sure to choose a unique name thas has not been taken by any other corporations, limited partnership (LP), Arizona LLCs, limited liability partnership (LLP), or trade name (DBA).
If you want to fit in the restricted words for example attorney, bank, university, etc., it might demand having a licensed lawyer or doctor to be a part of your company and needs additional documentation.
After deciding on a suitable name for your Arizona LLC, the next step is to verify that your chosen name in Arizona is available for your use. Make sure if the name is still available or utilized by another entity.
To check the LLC name availability in Arizona, click on the following link to the Arizona eCorp website:
Furthermore, you can also generate a name through an LLC Name Generator online.
Do I need to get a Trade Name or DBA for my business?
Generally, LLCs do not need a DBA or Assumed Business Name. However, if you want to rebrand your business or move your business to another state and your LLC name is not available in that state, your LLC will need a DBA.
The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. Click here to file a Arizona DBA.
Arizona Trade Names are not filed with the Arizona Corporation Commission (AZCC) but are filed with Arizona’s Secretary of State (SOS).
If you still have questions relating to Trade Name registration in Arizona, you can contact the Secretary of State on 602-542-4285. Moreover, you can also ask your question through the state website or check their Contact page to get your queries answered.
Step Two
#2: Find a Registered Agent
Another vital step is to find a reliable Registered Agent to form an LLC in AZ.
A registered agent is a person or entity appointed by your business such as an LLP, LLC, or corporation to receive service of process notices, official mails, government correspondence, and other compliance-related documents on behalf of your business.
There are some limitations when choosing a registered agent in Arizona. The person should be an Arizona inhabitant and available during business hours. Click here to know more about the requirements of a registered agent.
Important
You must submit the Statutory Agent Acceptance form along with the Arizona Articles of Organization while registering your Arizona LLC.
How to Get an Arizona Registered Agent?
You may nominate yourself for the government correspondence, and also hire affordable services to keep your personal information private. (The registered agent’s name, address, and contact are made public on the government website).
We recommend ZenBusiness due to their registered agent services available in all 50 states at an affordable price and satisfactory customer care. Moreover, if you incorporate your ArizonaLLC through ZenBusiness, they charge you only $49 plus the state filing fee and offer a free first year of their registered agent services.
What is a registered agent?
A registered agent is a person or entity designated by your business for government correspondence. You appoint a registered agent to receive official mails, service of process notices, and other compliance-related documents on behalf of your LLC.
Who can be my Arizona Registered Agent?
You or anyone else can be your registered agent if they fulfill the following requirement: – A registered agent must be 18 years of age or older – A registered agent must be a resident of the state where you wish to register your business – A registered agent must be available during regular business hours – A registered agent must have a physical address (street address usually) to which documents can be delivered. In most states, P.O. mailbox can’t be used.
Can I be my own Arizona registered agent?
Yes, you or any of your LLC members can act as your own registered agent. However, you must be prepared for your personal information such as your name as address go public.
Is a registered agent service legit or worth it?
Well, for many business owners, a professional registered agent service is a convenient and affordable way for government correspondence for Arizona LLC. The advantages of using a registered agent company significantly outweigh the annual costs.
Moreover, in the worst-case scenario, if you are not satisfied with the registered agent service, you can change the statuary agent in Arizona at any time.
Step Three
#3: File an Articles of Organization
During the formation of an LLC in AZ, it’s crucial to submit your articles of organization with the Arizona Corporation Commission. A general article should cover up the following:
DIY Cost of Forming an LLC in Arizona ($50 + Publication Fee)
The main LLC formation cost through the DIY route is the state filing fee of your Article of Organization. Currently, the state of Arizona charges you $50 for filing your LLC and it may be subjected to revision by the state.
The filing fee of articles of organization is the same, regardless you submit online or through the mail. The LLC publication costs range from $30-$300 depending on the county and the newspaper.
You can file your Arizona article of organization online at the Arizona Corporation Commission’s website (Arizona eCorp). You can also download the article of organization form.
Mailing Address: Arizona Corporation Commission Corporate Filings Section 1300 W. Washington St., Phoenix, AZ 85007
How long does it take to form an LLC in Arizona?
The Arizona Corporation Commission usually takes up to 30 business days to process Arizona Articles of Organization. However, you can take the expedited option for an additional fee.
How much does it cost to form an Arizona LLC?
To start an Arizona LLC, you need to pay $50 to Arizona Corporation Commission s to process Arizona Articles of Organization. You also have to pay LLC publication fee that ranges from $30-$300. Moreover, if you take registered agent service, you may have to pay a fee starting from $99.
Additionally, to maintain your LLC in Arizona, you have to pay an LLC annual fee and taxes. See our article on the cost to form an LLC in any state.
Is Arizona domestic LLC is the same as Arizona Foreign LLC?
No, Arizona foreign LLC is different from Arizona domestic LLC. If you form and operate your LLC in Arizona, it is called Arizona domestic LLC. Usually, domestic LLCs are referred to as LLC.
Whereas if you register your LLC in any other state and partially operate your business in Arizona, the business you moved to Arizona will be called an Arizona foreign LLC. To know more about Foreign entities, read our guide on What is a Foreign LLC.
Step Four
#4: Fulfill Arizona LLC Publication Requirement
The newly formed LLCs in Arizona must publish an LLC Formation Notice for three consecutive weeks. The publication must be made in an approved newspaper in the county where LLC’s principal office is located.
The Arizona LLC publication must be done within 60 days of Arizona LLC formation.
Exceptions for Arizona LLC Publication Notice
Businesses formed in Maricopa or Pima counties are exempted from publishing a Notice of LLC Formation.
Download the list of approved newspapers organized by county for Arizona LLC publication:
The name(s) and address(es) of each member of your LLC or LLC’s manager
Arizona LLC Publication Fee
Arizona LLC publication fees vary by county and by the newspaper. The LLC publication costs range from $30-$300 and this fee is nonrefundable.
What is Arizona’s LLC publication requirement?
The state of Arizona made it obligatory to publish a notice in the authorized newspapers regarding LLC formation in Arizona for 3 consecutive weeks. The notice must be published within the sixty days of Arizona LLC formation. Otherwise, your LLC will not be formed in Arizona.
Which states require LLC publication?
Historically, many states require LLCs to publish a notice in their local newspaper(s) to notifying the public that a new business entity has been formed. But due to digitalization, only three states, Arizona, Nebraska, and New York, require LLCs publications.
Step Five
#5: Establish an LLC Operating Agreement
An LLC operating agreement is constitutional paperwork that sketches the rules and regulations for a new company and also outlines the entrepreneur’s operating procedures to form a new LLC in AZ.
This legal agreement guarantees all entrepreneurs to remain on the same boat, which ultimately lessens further business clashes.
Do I need to file my operating agreement with the State of Arizona?
No. The operating agreement is an internal document that guides how the day-to-day operations of an LLC will be conducted. Unlike articles of organization that must be submitted to state authorities, an operating agreement is not needed to be filed but kept in record for reference.
Does Arizona require an LLC to legally adopt LLC operating agreement?
No. the state of Arizona does not require LLC owners to officially adopt an operating agreement. However, many states made it compulsory for LLCs to formally adopt an operating agreement.
Regardless of that, there is no obligation to adopt LLC operating agreement in Arizona, having one will save you any trouble, disputes, or disagreements in the future.
Step Six
#6: Get Federal Tax Identification Number
Federal Tax Identification Number also known as Employer Identification Number (EIN) like your Social Security Number and used for paying federal taxes owed to your LLC.
Getting an EIN depends on whether your LLC is a single-membered LLC or multi-membered LLC. If you are operating as single-member LLC and do not have employees, you do not need an EIN.
However, if your LLC has multiple members or if you have employees (regardless of the number of LLC members), your company needs an EIN. To get an EIN from the Internal Revenue Service click the following links:
Mailing Address: Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999
If you still don’t feel confident and want 100% accuracy in filing, or want to save time while focusing completely on your business, you can get this done through LLC formation services such as ZenBusiness. They charge you $99 for filing your EIN. However, if you take their Pro and Premium LLC creation packages, they will get you an EIN for free.
You can use this nine-digit code to pay taxes, hire employees, and create a new bank account. So, an EIN is not only used to keep track of a business’s tax reporting but also to help identify a business entity.
Why do I need an EIN?
You need an EIN for several purposes such as: – To Pay Federal and State Tax – To open a Business Bank Account – For Your Business Identity – To Hire Employees
Where do I get an EINfrom?
You can get an EIN from the Internal Revenue Service by filing Form SS-4 online or through the mail. However, several LLC registration services can get an EIN for you for a fraction of the cost.
Can I get an EIN without a Social Security number?
Yes, you can file EIN without social security number. To do this, leave section 7b blank while completing the information on IRS form SS-4. After filing this form, call the IRS at 267-941-1099 to complete your EIN application.
Does LLC tax structure has anything to do with EIN?
Though there are different tax classifications for an LLC, the IRS did not create a new tax classification for the LLC. You have to check one of the options on section 9a of IRD form SS-4 while applying for an EIN.
Most LLCs elect the default tax status as pass-through entities like sole proprietorships. However, many LLCs reduce their federal tax obligation by choosing S corporation status.
Is there any Filing Fee for EIN?
No, the IRS provides you with an EIN for free. There is no EIN filing fee if you apply directly to IRS. However, many entrepreneurs hire LLC creation services to file an EIN for them.
In that case, you will pay them their fee which varies from company to company. For instance, as a stand-alone feature, ZenBusiness charge $99 for filing your EIN. However, if you take their Pro and Premium LLC creation packages, they will get you an EIN for free.
Step Seven
#7: Obtain Necessary Licenses, Certification, or Permits
Though the state of Arizona does not require a general business license from LLC owners, you still need registrations or authorizations for specific business activities in Arizona.
To successfully operate your LLC in Arizona, you must acquire specific certification, permits, and licenses to comply with federal, state, and local government regulations.
For instance, if you are a doctor, CPA, attorney, or belong to similar profession, you need to apply for Arizona Professional Licensure at the state of Arizona website
The requirements and fees for business licenses and permits vary from state to state. Work thoroughly on prerequisites and compliance-related information for your business before officially filing your LLC with the state. However, the following resources may help;
Hire a reliable, professional service like ZenBusiness to do a license and permit search for you. Many LLC formation services do this as a part of their LLC formation packages.
Limited liability companies in Arizona are not obliged to submit their annual (or biennial) reports. For more details on how to file an annual report or state-specific fee, read our article on LLC annual (or biennial) report.
#2. Submit Arizona State Income Tax
In Arizona, you do not need to submit an annual report and generally, LLCs do not have to pay annual state franchise tax. Moreover, if your LLC has decided to pay taxes in its default status, the state of Arizona does not doesn’t impose a state-level income tax on your LLC .
However, if you elect to pay your taxes as C corp, the state income tax rate for 2022 is 4.9% of taxable income.
Regardless of the tax status, all Arizona LLCs having members who are Arizona residents must pay Arizona Resident Personal Income Tax . Form 140 will be used to pay this tax.
Due date: March15th if you’re a calendar year filer.
Additional Information on Forming an LLC in Arizona
Business operations never stay static. Anytime in the future, you may need to make changes to your LLC whether they are related to expanding your business to different states, hiring new employees, or termination of your Arizona LLC.
Below are explained some of the important LLC related changes:
Register a Foreign LLC in Arizona
Entrepreneurs often form an LLC in a state other than the state of their residence to have some tax benefits and reduce LLC formation cost. Moreover, some business owners have their LLC franchises in multiple states.
In such cases, they register their LLCs or franchises as foreign LLC in all states where they operate their business.
Filing Fee of Arizona Foreign LLC
To file a Foreign LLC in Arizona you need to submit $150 which is non-refundable and payable to the Arizona Corporation Commission.
If you have set up an LLC in any other state and wish to open a franchise in Arizona or want to form an LLC in Arizona while you are a non-Arizona resident, can download a foreign LLC application:
Verify the employment status of individuals such as whether the potential employee is a US resident if not then are they permitted to work in the US, are they of a certain age to work for that particular job, etc
Report new hiring to the state
File quarterly reports on wages and taxes
Report job refusal
Obtaining a Certificate of Good Standing in Arizona
A Certificate of Good Standing, aka Certificate of Compliance in Arizona, verifies that your LLC has been legally formed and is being operated and maintained in a compliant fashion.
You can request the certificate of good standing from Arizona Corporation Commission’s website using the following link.
Seeking fundings and investments from banks or other people
Acquiring or renewing relevant business licenses or permits
Dissolve Your LLC in Arizona
In case you no longer wish to continue your LLC in Arizona at any point in the future you must officially dissolve it otherwise you may face tax liabilities and penalties, and legal troubles.
Arizona LLC Dissolution Fee
To dissolve an LLC in Arizona, you need to pay $35 (non-refundable) to Arizona Corporation Commission along with Arizona Articles of Dissolution.
In Arizona, you can dissolve your LLC by following 3 basic steps:
Comply with your Arizona LLC operating agreement
Close all business tax accounts
You can hire the LLC services such as LegalZoom to make the LLC dissolution process seamless and easy for you. If you want to file yourself, follow the Arizona LLC Dissolution guide.
Final Verdict
We hope this article has helped you in every aspect of forming an LLC in Arizona. If you still have any questions or confusion, please ask in the comment section.
Aisha Noreen is an owner of a small business with more than 9 years of experience in the marketing industry. With the wisdom of an old soul, she always seeks innovation and mind-blowing ROI techniques. Her unique approach helped many small businesses thrive and she can surprise you in many ways as well. Believe it or not, her energy, passion, and creativity are contagious enough to transform your business and take it to another level.
