How to Start an LLC in Arizona (Step-by-Step Guide)
Did you know that Arizona is home to around 550,000 small businesses? With its warm climate and favorable cost of living, Arizona is not just a beautiful place to live; it’s also an intelligent choice for business.
Starting an LLC in Arizona is a straightforward process that protects your assets while allowing your business to thrive in a strong economy.
To start an LLC in Arizona, you must select a unique name, select a statutory agent, file Articles of Organization, and fulfill Arizona Publishing Requirements.
Filing Arizona LLC Articles of Organization costs $50, and obtaining an LLC in Arizona takes 14-16 days.
This guide will walk you through forming an LLC in Arizona, from choosing a name to filing your Articles of Organization.
What Are the Steps to Start an LLC in Arizona?
To start an LLC in Arizona, you need to:
- Step 1. Choose and search for a unique name
- Step 2. Designate an Arizona Statutory Agent or Registered Agent
- Step 3. File Arizona LLC Articles of Organization and Statutory Agent Acceptance Form
- Step 4. Fulfill Arizona Publication Requirements
- Step 5. Create an Operating Agreement
- Step 6. Get an EIN from the IRS
Let us dive more in-depth into these steps so I can show you how to get them:
Step 1: Choose a Unique Name for Your Arizona LLC
Choosing a name for your Arizona LLC is the first and crucial step. Your name must be unique to prevent confusion with other businesses.
Your name must include “Limited Liability Company,” “Limited Company,” or abbreviations like “LLC,” “L.C.,” or “LC.” You cannot use terms like “association,” “corporation,” “bank,” or any words that imply government affiliations.
Once you have a name in mind, perform an LLC lookup using the Arizona Corporation Commission’s database. This helps ensure no one else is using the same name.
To keep your chosen name safe, check for federal trademarks as well. If you’re serious about your brand, consider trademarking it for extra protection.
Choosing Your LLC Type
Arizona offers two LLC types: Standard LLCs and Professional LLCs (PLLCs). One or more members form a Standard LLC to conduct non-professional business activities.
In contrast, a PLLC comprises licensed professionals who provide services requiring state certification.
If your LLC plans to offer professional services, such as legal, dental, medical, architectural, engineering, or veterinary work, you must establish a PLLC.
These specialized LLCs must include the PLLC designation or its abbreviation in their business name and meet additional requirements. This includes detailing the specific services the PLLC will provide in its Articles of Organization.
Reserving LLC Name
If you’ve found a name that meets the state’s criteria but you aren’t ready to register your LLC, it’s wise to reserve it immediately to secure your choice.
Remember, reserving a name doesn’t create the LLC; it simply holds the name for you until you’re ready to proceed with the official registration.
The reservation is valid for up to 120 days and cannot be renewed under the same name. However, it can be transferred to another person within that period by submitting a Transfer of Name Reservation to the A.C.C.
Reserving your name can be accomplished by:
- Filing an “Application to Reserve Limited Liability Company Name” online on the “Name Reservation” page of the A.C.C. website and paying a $10 filing fee. You can spend an extra $35 to expedite the process.
- Completing and submitting a paper application with a $10 filing fee in person or via mail to Arizona Corporations Commission, Corporations Division, 1300 W. Washington Street, Phoenix, AZ 85007-2996.
Using a Trade Name or DBA
Some companies operate under a name different from their official name, known in Arizona as a trade name. This is often called a “Doing Business As” (DBA) name, fictitious or assumed name.
When selecting your LLC name, you must ensure it meets state requirements (refer to the state’s Trade Name Handbook for distinguishable standards) and confirm its availability.
Unlike name reservations, which the ACC manages, the Secretary of State handles trade name registration in Arizona.
The process is entirely online and requires a $15 filing fee. An expedited service option is available for an additional $25. Once registered, the trade name is valid for five years.
Step 2: Choose an Arizona Statutory Agent or Registered Agent
Choosing a statutory agent is crucial when starting your LLC in Arizona. This agent will accept legal documents and important notices on your behalf.
In Arizona, this individual is called a “statutory agent.” In most other states, this individual is known as a “registered agent” or “registered office.”
Who Can Be a Statutory Agent or Registered Agent?
You have three options for deciding on the best statutory agent in Arizona:
- You: You can act as your statutory agent, but remember you must be available during business hours to receive documents.
- A Family Member: A trusted family member can be your registered agent.
- An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
- A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.
Requirements for a Statutory Agent
Arizona law requires registered agents to be residents with a physical street address or have a business office in Arizona (if a company).
PO Boxes are not allowed for this role. Ensure your agent is always available to receive important documents; missing them can lead to legal issues.
Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.
Arizona Law also requires agents to complete and file a Statutory Agent Acceptance form with the Arizona Corporation Commission (ACC). Registering a statutory agent is free unless you opt for expedited processing, which incurs a $35 fee.
Your registered agent’s name and address will be listed on public records for everyone to see. If you don’t have an address in Arizona or want more privacy, I recommend hiring a Registered Agent Service for your LLC.
What registered agents do I recommend for Arizona?
I highly recommend Northwest registered agent services for obvious reasons.
They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.
You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.
Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.
Step 3: File Arizona LLC Articles of Organization and Statutory Agent Acceptance Form
To start your LLC in Arizona, you must file the Articles of Organization and the Statutory Agent Acceptance Form.
The Articles of Organization is the most crucial document that officially registers your LLC with the state of Arizona. This form includes essential details such as your LLC’s name, address, registered agent, and members’ or managers’ names.
To file your Articles of Organization in Arizona, follow these steps:
Step #1. Complete the Form: Obtain and complete the Articles of Organization form and the Statutory Agent Acceptance form from the Arizona Corporation Commission.
The Articles of Organization must include:
- Name of your LLC
- Type of LLC: Standard LLC or Professional LLC (PLLC)
- Name and address of your statutory agent
- Address of your principal office
- Management structure: Member-managed or manager-managed
- Signature(s) of the organizer(s)
To form a foreign LLC in Arizona, complete the Arizona Foreign Registration Statement and the Application for Foreign Limited Liability Company Registration. This costs $150 and $185 for expedited processing. Remember to obtain a Certificate of Existence from the initial filing state.
Step #2: File Online or by Mail: You can file your Articles of Organization and Statutory Agent Acceptance form online through the Arizona Corporate Commission website or by mailing the completed form to:
Arizona Corporation Commission
Examination Section
1300 W. Washington St.
Phoenix, Arizona 85007
Step #3: Pay the Filing Fee: The filing fee is $50. If you want it expedited, you can pay an extra $35. Statutory agent registration is free unless you need expedited processing, which includes a $35 fee.
Once your articles are filed, the state will review and approve them. Once received, mailed or in-person documents typically take 14 to 16 business days to process. Opting for expedited service reduces this time to 7 to 9 days.
Online filings generally take around 14 business days, but with the expedited fee, your documents could be processed in as little as one day.
Step 4: Fulfill Arizona Publication Requirements
In Arizona, you must publish a notice in a local newspaper after forming your LLC. This is a unique requirement, as Arizona is one of three states with this rule.
The newspaper must be in the same county as your LLC’s Statutory Agent address. It must also have general circulation. The notice must be published in one newspaper for three runs (which usually take one to two weeks).
Expect to pay between $60 and $120 for the ads. Some counties might charge even more, ranging from $30 to $300.
You don’t have to run an ad if your LLC is in Maricopa or Pima County. The Arizona Corporation Commission publishes your LLC information online.
You have 60 days to complete this step when the state approves your Articles of Organization. If you fail to publish, your LLC could be dissolved.
Completing this requirement ensures compliance with state law and keeps your business in good standing. Make sure to retain proof of your publication for your records.
Step 5: Prepare the Arizona LLC Operating Agreement
An LLC Operating Agreement is an essential internal document for your Arizona LLC. While it’s not legally required in Arizona, having one is highly recommended.
This agreement outlines the rights, duties, and financial interests of all members of your LLC. Consider it a contract that sets the rules and policies for your LLC’s operation. It can help provide clarity and prevent misunderstandings.
Here are some key components to include in your operating agreement if you choose to prepare one:
- Ownership Structure: Listing all members and their ownership percentages.
- Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
- Voting Rights: Define how decisions will be made. Will all members have equal votes?
- Profit Distribution: Explain how profits and losses will be shared among members.
- Meeting Procedures: Outline how often meetings will occur and how members will be notified.
- Amendment Process: Describe how changes can be made to the agreement in the future.
Creating an operating agreement may feel complex, but it’s essential for clarity.
It serves as your LLC’s rulebook, guiding operations and avoiding conflicts down the line. Keeping everyone on the same page is even more vital if you have partners.
Step 6: Obtain EIN for Your LLC
The next step for your Arizona LLC is to get an Employer Identification Number (EIN) from the IRS. An EIN is also known as a Federal Tax Identification Number. It is essential for various business activities.
You will need an EIN to open a bank account, hire employees, file taxes, and apply for business licenses and permits.
How to Apply for an EIN:
- Online: Visit the IRS website. This is the fastest way to get your EIN.
- By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
- By Fax: You can also fax the completed Form SS-4.
- Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.
How Much Does It Cost To Get EIN?
Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.
How Does it Take to Obtain my EIN?
- Online: Get it immediately.
- By Mail: Expect 4 to 6 weeks.
- By Fax: Usually within 1-2 weeks.
What are the Different Methods To Start an Arizona LLC?
There are several ways to start an LLC in Arizona. You can do it yourself, use professional services, or hire an attorney. Each method has its benefits and challenges, allowing you to select the best fit for your needs.
DIY LLC Formation in Arizona
Forming an LLC by yourself is a straightforward option. You will fill out and submit the Arizona Articles of Organization and pay the required filing fee.
All by yourself, no third party!
Pros:
- Cost-Effective: You save money by not hiring anyone.
- Control: You have complete oversight of each step.
- Learning Opportunity: You gain knowledge about the process.
Cons:
- Time-Consuming: It may take longer if you are unfamiliar with the process.
- Complexity: You must ensure all forms are correctly filled out.
- Privacy issue: If you serve as your registered agent, you risk having your address out there.
- Lack of Guidance: You might miss the necessary steps.
Using a Professional/Online LLC Formation Services
Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.
Pros:
- Convenient: They manage the filing, saving you time.
- User-Friendly: Most platforms have easy-to-understand instructions.
- Support Available: Many offer customer service for questions.
- Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised
Cons:
- Costs: You’ll pay a service fee.
- Variable Quality: Some services may not be as reliable as others.
Hiring an Attorney
Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.
Pros:
- Expertise: An attorney knows the legal requirements and can avoid pitfalls.
- Customization: Your LLC can be tailored to your specific business needs.
- Support with Complex Situations: Ideal for businesses with unique circumstances.
Cons:
- Higher Costs: Legal fees can be expensive.
- Dependence on Others: You may rely heavily on the attorney’s schedule.
- Potential Delays: The process may take longer due to attorney workloads.
What is The Cheapest Alternative Way to Form an LLC in Arizona?
When starting an LLC in Arizona, you have several options. These include hiring a professional service or forming it yourself (DIY), the most cost-effective choice.
Filing online through the Arizona Corporation Commission is quick and easy. You can complete this in about 10-15 minutes for a filing fee of $50. This process saves you on additional service fees that companies typically charge.
However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.
Consider using a registered agent if you prefer not to handle everything yourself.
They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.
Who Provides the Best LLC Services in Arizona?
There are a myriad of Arizona LLC services from which to choose. Choosing the wrong one can affect your Arizona LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.
Here are some top-rated options you should consider:
Best Arizona LLC Service | Google Rating | LLC Formation Cost | Registered Agent Fee |
---|---|---|---|
Northwest Registered Agent | 4.7/5 | $39 | Free for 1 year |
Doola | 4.6/5 | $0 (plus state fees) | $297/year |
Tailor Brands | 4.4/5 | $0 (plus state fees) | $199/year |
ZenBusiness | N/A | $0 (plus state fees) | $199/year |
Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.
Northwest Registered Agent stands out in Arizona LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.
How Much Does It Cost To Form an LLC in Arizona?
When you decide to form an LLC in Arizona, you need to consider a few essential costs.
The primary fee is $50, which is charged for filing the Articles of Organization with the Arizona Corporation Commission.
Here’s a breakdown of the costs associated with forming and maintaining your LLC in Arizona:
Requirement | Cost |
---|---|
Articles of Organization Filing Fee | $50 |
Name Reservation Fee | $10 |
Trade Name Filing Fee | $15 |
Notice Publication | $30 – $300 |
LLC Formation Fee | $39 (via Northwest) |
Registered Agent Fee | $0 (via Northwest) |
Total Initial Cost Estimate | $150 – $400 |
When forming a new company in AZ, it is ideal to budget about $150-$400 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.
That said, the most significant (and important) expense for every Arizona business owner is filing the Articles of Organization, which costs $50.
Pros and Cons of Forming an LLC in Arizona
Arizona LLC Pros
Arizona LLC Cons
5 Important Things To Do After Forming Your Arizona LLC
After registering your LLC in Arizona, several essential tasks must be completed. These actions will help protect your business and ensure it operates smoothly in compliance with state laws.
1. Research the Best Licenses and Permits for Your Business
While Arizona doesn’t require a general state business license for LLCs, local permits may be necessary. You should check with your city and county officials to identify specific licenses required for your business type.
Contractors, for example, must register with the Arizona Registrar of Contractors. In addition, individual cities or towns may require you to be licensed if you plan to do business within the city/town limits.
Restaurants may need health permits, while retail shops might require sales tax licenses.
You can use the Arizona Department of Commerce Licensing Guide to learn about any certifications that may apply to your LLC. Ensuring you have the correct licenses will keep you compliant and avoid potential fines.
2. Create Business Accounts for Your AZ LLC
It’s crucial to separate your business and personal finances to protect your assets. Open a dedicated business bank account for your LLC.
This separation prevents co-mingling of funds, which is essential in maintaining the limited liability protection your LLC provides. If you face legal issues, personal assets may be at risk if you do not follow this step.
When choosing a bank, compare fees and services to find a deal that best suits your needs.
3. Understanding Arizona Tax Requirements and Managing Your Taxes
LLCs in Arizona are generally treated as pass-through entities, meaning profits are taxed through members’ tax returns. You must pay federal income taxes based on your share of the profits.
If your business earns significant income, consider electing S-corp or C-corp status for potential tax savings.
Additionally, don’t forget about transaction privilege taxes (TPT) on sales, which apply to certain activities. Staying informed about local taxes is crucial to avoid unexpected liabilities.
Consider consulting with an accountant for tailored advice and to optimize your tax strategy. They can help ensure you meet all requirements and take advantage of available tax benefits.
4. Get Business Insurance for Your LLC
Having business insurance is crucial, regardless of your industry. It protects your LLC from potential claims and lawsuits. Standard policies include general liability, property insurance, and professional liability.
Depending on your business type, special coverage like product liability or workers’ compensation may be necessary.
Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions.
Assessing your business needs helps you choose the appropriate coverage to protect your LLC.
Consult with an insurance agent to tailor your coverage. This investment can save you from significant out-of-pocket expenses in case of a claim.
5. Setup Your Business Online Presence (optional)
Establishing an online presence can help attract customers and grow your business. Start by creating a professional website. A website can serve as your business hub even if you don’t have a physical storefront.
Register a domain name that reflects your business and create profiles on social media platforms.
This enhances your brand visibility and helps you connect with your audience. Consider investing in online advertising to reach a broader market.
Arizona LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations
When starting a business in Arizona, you can choose from several structures. Each has its features and benefits.
Sole Proprietorship
An Arizona sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.
However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk.
It’s easy to set up and manage, but it does leave you personally responsible for any business debts.
Partnership
An Arizona partnership involves teaming up with one or more people to run a business together.
Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.
However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too.
Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.
LLC (Limited Liability Company)
An LLC offers a blend of flexibility and protection.
Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.
It’s more formal than a sole proprietorship or partnership but offers flexibility in management and tax treatment. LLCs are ideal for small to medium-sized businesses that want liability protection without the complexity of a corporation.
S-Corporation
An S Corporation is a more structured business form.
Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.
This means you report the income and losses on your personal tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.
Corporation
An Arizona corporation is the most complex structure, suitable for larger businesses aiming for significant growth.
Imagine a big company with many shareholders. A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your personal assets are protected.
Corporations can raise capital more efficiently by issuing stock and can offer employee benefits.
However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.
My Final Thoughts: Forming an LLC in Arizona
Starting an LLC in Arizona is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.
To start an LLC in Arizona, follow these steps:
- Choose an LLC Name: Ensure it includes “limited liability company” or “LLC.”
- Select a Registered Agent: This person will receive legal documents for your LLC.
- File Articles of Organization: Submit these legal documents to the Arizona Corporation Commission (ACC).
- Complete the Publication Requirement: Publish an announcement of your LLC formation in a local newspaper.
- Create an Operating Agreement: Outline the management of your LLC.
- Get an EIN: Obtain an Employer Identification Number from the IRS.
The Filing fee for Articles of Organization is $50. Arizona does not require annual reports, but staying compliant with other regulations is essential.
Forming an LLC in Arizona involves careful planning and a few essential steps. The process is straightforward, making it accessible for new business owners. These steps will help you establish a solid legal foundation for your business.
Learn More About Starting an LLC in Arizona
If you need additional help to start an LLC in Arizona, check out these useful resources:
Frequently Asked Questions
How long does it take to get an Arizona LLC, and can it be expedited?
The typical processing time for an Arizona LLC is about 14 to 16 business days. If you need to expedite the process, Arizona offers expedited services for an additional fee, which can significantly reduce the processing time.
What if I already have an LLC in a different state from Arizona?
If you have an LLC in another state, you can either register your existing LLC as a foreign LLC in Arizona or create a new LLC. You can also dissolve the LLC in your original state if you plan to operate solely in Arizona.
Can You Form an LLC For Free in Arizona?
Unfortunately, you cannot form an LLC for free in Arizona. You must pay various fees, including filing for the Articles of Organization and publication requirements.
Can I form an LLC in Arizona without a lawyer?
Yes, you can form an LLC in Arizona without hiring a lawyer. Many people choose to do this because legal fees can be expensive. All you need is a registered agent with an address in Arizona.
What is the process for registering an LLC in Arizona online?
You can visit the Northwest Registered Agent website to register your LLC online. Follow their LLC filing procedure, complete the necessary forms, and pay the required fees.
Can I change my registered agent in Arizona?
Yes, you can change your registered agent in Arizona. You will need to update the information by submitting a form to the Arizona Corporation Commission (ACC) and paying any applicable fees.
How do I change my Arizona LLC’s name?
To change the name of your Arizona LLC, you must file an amendment with the Arizona Corporation Commission. This involves completing the form, paying a fee, and ensuring the new name is available.
How do I renew my Arizona LLC?
Arizona LLCs do not need to file annual reports, but they must pay the yearly fees. Keep track of your due dates to ensure compliance and avoid penalties.
How do I dissolve an LLC in Arizona?
To dissolve your LLC in Arizona, file the appropriate paperwork with the Arizona Corporation Commission. You must complete the Articles of Termination and pay the required fee.
How do I add a member to an Arizona LLC?
To add a member to your Arizona LLC, update your operating agreement to reflect the new member’s details. No forms are required for this, but it’s vital for your records.
How do I add a DBA to an LLC in Arizona?
You must file a trade name application with the ACC to add a DBA (Doing Business As) to your Arizona LLC. It costs $15 and must be renewed periodically.
Can a minor own an LLC in Arizona?
Yes, a minor can own an LLC in Arizona. However, an adult may need to act on the minor’s behalf in legal matters.
What is the Cost of the Arizona Annual Report?
Arizona does not require LLCs to file annual reports.
Does LLC expire in Arizona?
An LLC does not expire in Arizona as long as the annual fees are paid. If you fail to pay for several years, the LLC may be administratively dissolved.
Can a non-resident open an LLC in Arizona?
Yes, a non-resident can open an LLC in Arizona. There are no residency requirements for forming an LLC in the state.
Can I buy a house or car with my LLC in Arizona?
You can buy a house or car with your LLC in Arizona. The LLC must go through the proper purchasing processes and obtain financing if needed.
Can you have multiple businesses under one LLC in Arizona?
Yes, you can operate multiple businesses under one LLC in Arizona. However, it’s usually advisable to have separate DBAs for clarity and legal purposes.
Is Arizona an excellent state in which to form an LLC? Is it worth it?
Many entrepreneurs find Arizona a favorable state for establishing an LLC due to its low fees and business-friendly environment. Whether it’s worth it depends on your specific business goals.
Can one person form an LLC in Arizona?
Yes, one person can form an LLC in Arizona. This is called a single-member LLC, typical for many small business owners.
Disclosure: We may earn commissions if you buy via links on our website. Commissions don’t affect our opinions or evaluations. We’re also an independent affiliate of many platforms, including ClickFunnels, Kartra, GoHighLevel, Podia, Northwest Registered Agent, and others. We’re not employees of these services. We receive referral payments from them, and the opinions expressed here are our own and are not official statements of these companies.