Starting a Limited Liability Company (LLC) in Arizona offers entrepreneurs a range of benefits, including liability protection, tax advantages, and flexible management options. It is essential to understand the state’s specific requirements and procedures for how to start an LLC in Arizona to ensure a smooth and efficient process.
This comprehensive guide will walk you through the steps of creating your Arizona LLC, from choosing a unique name to completing the necessary paperwork and compliance. Whether you are looking to start this LLC to develop a family office the Familoff way, or if you are just looking to start a business, let this guide lead the way.
How to Start an LLC in Arizona: Step-by-Step Guide
Forming an LLC in Arizona requires following several crucial steps to ensure your business remains compliant with state regulations. In this guide, you’ll find a detailed overview of the process for creating an Arizona LLC.
We will discuss choosing a name, appointing a statutory agent, submitting the Articles of Organization, creating an operating agreement, obtaining an EIN, adhering to tax and regulatory requirements, maintaining your LLC, and outsourcing LLC creation.
Choose a Name for Your Arizona LLC
The first step in establishing your Arizona LLC is selecting a unique and fitting name for your business. A proper name should be memorable, reflect your business’s nature, and comply with Arizona’s naming requirements:
- The name must include “Limited Liability Company,” “LLC,” or “L.L.C.”
- Name cannot contain words or abbreviations that could cause confusion with a government agency (e.g., FBI, Treasury, State Department, etc.)
- The name must be distinguishable from other registered businesses in Arizona.
To verify if your desired name is available, use the Arizona Corporation Commission’s eCorp Business Name Search. If your chosen name is available, you can reserve it for up to 120 days by filing a Name Reservation Request form and paying a $45 reservation fee.
In addition to checking name availability, consider searching for your desired domain name to secure your preferred online identity early on if you plan to develop a web presence for your business.
Appoint a Registered Agent in Arizona
Every Arizona LLC must appoint a statutory agent (also known as a registered agent in other states), who is a person or business entity that agrees to receive legal and official documents on behalf of your LLC. The agent must meet the following requirements:
- An Arizona resident or a business authorized to conduct business in the state.
- Physically located at a street address within the state (P.O. boxes are not accepted).
You can act as your own statutory agent or hire a professional statutory agent service. When selecting a statutory agent, consider their reliability, availability, and ability to maintain your business’s privacy. Many professional services offer additional benefits, such as compliance reminders and document management, which can help you stay organized and in compliance with state requirements.
File Arizona LLC Articles of Organization
To officially form your Arizona LLC, you must file the Articles of Organization with the Arizona Corporation Commission. This document contains basic information about your LLC, such as its name, statutory agent, and business address. In Arizona, you can file the Articles of Organization online or by mail.
The online filing process is more efficient and can be completed through the Arizona Corporation Commission’s eCorp portal. To file by mail, download the Articles of Organization form, complete it, and send it to the Arizona Corporation Commission, along with the filing fee.
The filing fee for Arizona LLCs is $50 for standard processing or $85 for expedited processing. Once your Articles of Organization are approved, your LLC will be officially registered in Arizona. It’s essential to keep a copy of the approved Articles of Organization for your records, as you may need to reference them in the future.
Create an Operating Agreement for Your Arizona LLC
An operating agreement is a legal document that outlines the ownership structure and operating procedures of your LLC. While Arizona does not require an operating agreement, it’s a good idea to have one to ensure all members are on the same page and to prevent potential disputes.
An operating agreement should include information about:
- Ownership percentages
- Management structure (member-managed or manager-managed)
- Member roles and responsibilities
- Voting rights and decision-making processes
- Profit distribution and capital contributions
- Procedures for adding or removing members
- Dissolution process
An operating agreement can be customized to fit your LLC’s specific needs and preferences. While you can create an operating agreement yourself, it’s advisable to consult with an attorney or use an online template to ensure all necessary information is included and that it complies with Arizona laws.
Obtain an EIN for Your Arizona LLC
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for tax purposes. Your Arizona LLC will need an EIN for filing taxes, opening a bank account, and hiring employees.
Obtaining an EIN is a simple and free process. You can apply for an EIN online through the IRS website. The online application is available Monday through Friday, from 7 a.m. to 10 p.m. Eastern Time. Alternatively, you can apply for an EIN by mail or fax using Form SS-4, but the processing time will be longer.
Once you receive your EIN, it’s essential to keep this number secure, as it’s used to identify your business for various financial and legal purposes.
Comply with Arizona LLC Tax and Regulatory Requirements
As an Arizona LLC, your business will be subject to various tax and regulatory requirements. It’s crucial to understand and comply with these requirements to maintain your LLC’s good standing.
- Federal income tax: By default, LLCs are treated as pass-through entities for tax purposes. This means that profits and losses are passed through to the LLC members, who report them on their personal income tax returns. However, you can choose to have your LLC taxed as a corporation by filing Form 8832 with the IRS.
- State income tax: Arizona imposes a state income tax on LLC members. You will need to file an annual state income tax return and pay any taxes due.
- Business licenses and permits: Depending on your LLC’s industry and location, you may need to obtain additional licenses and permits to operate legally. Check with your local city or county government offices to determine which licenses and permits are required for your LLC.
Maintain Your Arizona LLC
To keep your Arizona LLC in good standing, it’s essential to meet ongoing state requirements. Arizona LLCs must file an annual report with the Arizona Corporation Commission, along with a $45 filing fee. The report is due on the anniversary of your LLC’s formation and can be filed online or by mail. Failure to file the annual report and pay the required fee can result in penalties and the administrative dissolution of your LLC.
Additionally, ensure that your statutory agent’s information remains current, and promptly update the Arizona Corporation Commission if there are any changes.
Outsourcing Arizona LLC Creation
While forming an Arizona LLC on your own is doable, many entrepreneurs choose to outsource the process to professional services such as LegalZoom, Incfile, or ZenBusiness. These services can simplify the LLC formation process and save you time, allowing you to focus on growing your business.
Outsourcing your LLC creation offers several benefits:
- Expertise: Professional services are well-versed in state requirements and can help you avoid common pitfalls and errors.
- Convenience: They will handle the paperwork, filings, and interactions with the state on your behalf, ensuring all necessary steps are completed.
- Statutory agent services: Many LLC formation services also offer statutory agent services, providing you with a reliable and professional statutory agent for your LLC.
- Ongoing support: Most services offer ongoing support and assistance with maintaining your LLC, including compliance reminders and annual report filing.
When choosing an LLC formation service, compare pricing, features, and customer reviews to find the best fit for your needs. Keep in mind that the cost of using a professional service will be in addition to the state filing fees.
Final Thoughts on How to Start an LLC in Arizona
Starting an LLC in Arizona involves several steps, from choosing a unique name to complying with ongoing tax and regulatory requirements. By following this comprehensive guide, you’ll be well on your way to forming a successful Arizona LLC.
While the process can be managed independently, outsourcing LLC creation to professional services can save you time and ensure compliance with state requirements. Regardless of the path you choose, starting an LLC in Arizona can provide valuable benefits for your business and set you up for future success.
