How to Form an LLC in Arizona

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.

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

Introduction:

Now, what is an LLC? A Limited Liability Company (LLC) unites the best features of partnerships, sole ownerships, and corporations into one organizational entity.

An LLC provides full protection against business liabilities, tax incentives, flexible tax structure, and requires lesser formalities unlike S corp or C corp, etc.

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!

Outlining the LLC Formation Process
(7 Steps)

  1. Pick a Name for Your Arizona LLC
  2. Find a Registered Agent for your LLC
  3. Submit the Articles of Organization
  4. Fulfil Arizona LLC publication requirement
  5. Establish an LLC Operating Agreement
  6. Get Federal Tax Identification Number (also called EIN)
  7. 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.
  • For detailed LLC naming guidelines, visit Arizona Corporation Commission website.

Checking LLC Name Availability in Arizona

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.

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.

Click on the following link to know more about “why do you need a registered agent?”.

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 Arizona LLC through ZenBusiness, they charge you only $49 plus the state filing fee and offer a free first year of their registered agent services.

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:

  1. Name and type of LLC
  2. Registered agent and registered office
  3. Governing authority (member managed vs manager managed)
  4. Purpose of LLC formation
  5. Initial mailing address
  6. Organizer of LLC (the person who is forming an LLC)
  7. Signature of an authorized person of an LLC

Read more instructions to file Arizona Articles of Organization.

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.

Mail Form L010 along with the following forms to the Arizona Corporation Commission at the address given below:

Mailing Address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St., Phoenix, AZ 85007

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:

What Must be INcluded in Arizona LLC publication?

The following information will be needed to publish Arizoma LLC formation notice:

  • LLC’s name
  • The Statutory Agent’s information ( name and street address)
  • The address of the LLC’s principal place of business (if not the same as of the Statutory Agent’s address)
  • LLC management structure (member-managed LLC or manager-managed LLC)
  • 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.

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.

Although not necessary, creating an operating agreement will be a good practice. It will help you in the future if you decide to dissolve your Arizona LLC or want to move your LLC out of Arizona.

This legal agreement guarantees all entrepreneurs to remain on the same boat, which ultimately lessens further business clashes.

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:

Fax: (855) 641-6935

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.

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

Get Specific License or Permit in Arizona

To learn about the specific license or permit, visit the Arizona Department of Revenue’s (AZDOR) website. The License Fees, Cancellation and Other Changes section helps you learn the state’s license requirements. Also visit Licensing and Taxes section and Transaction Privilege Tax for additional information.

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.
  • Visit the US Small Business Administration (SBA) guide for federal license and permit information.
  • Visit your local county clerk’s office and seek information about local licenses and permits.

Things To Do After LLC Formation (Stay compliant With the Law)

Finally, you’ve formed an LLC by yourself or through online services. However, to stay compliant and save your LLC from administrative or judicial LLC dissolution, you must fulfill the following requirements:

#1. Responsibly Submit Annual Reports

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.

Important

See A Guide to Taxes for Arizona Businesses to have a detailed insight into Arizona Business Taxes.

Visit Arizona Department of Revenue website and see Corporate Income Tax Forms section and Corporate Income Tax Highlights page for specific information.

#3. Submit Arizona Resident Personal Income Tax

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.

Visit Arizona Department of Revenue website and see Individual Income Tax Forms section and Individual Income Tax Highlights page for specific information.

Due date: April 15th if you’re a calendar year filer.

#4. Arizona Partnership Income Tax Return

If your LLC is taxed as partnership, you are required to pay this tax using form 165. Visit Arizona Department of Revenue website and see Partnership Forms section and Partnership Highlights page for specific information.

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:

Fax: (602)-542-4100

Mailing Address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St., Phoenix, AZ 85007

Hiring Employees in Arizona

To run your business in a compliant manner, you have to follow the guidelines of the Arizona Department of Economic Security and Industrial Commission of Arizona and while hiring employees to your existing business or new LLC. Some of the major points are stated below;

  • 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.

Arizona Certificate of Good Standing Fee

Certificate of Good Standing Fee in Arizona is $45 which is non-refundable and payable to the Arizona Corporation Commission.

You will need a certificate of status for;

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.

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