How to Form an LLC in Arizona

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Arizona LLC Quick Facts

Arizona LLC Costs

Arizona Initial Filing Fee:

  • $50 standard filing
  • $85 expedited filing

 

Publishing Costs – Varies by newspaper, but averages between $60 – $130

 

Recurring Fees – $0 (Annual Report must still be filed)

LLC Processing Time

It normally takes 3 weeks for the LLC paperwork to be approved in Arizona. Expedited processing is also available for an additional fee and reduces the filing time to 7 – 10 business days.

Don’t want to form an LLC by yourself?

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Quick Reference

The Limited Liability Company (LLC) is a popular business structure for many businesses starting in Arizona. The LLC provides asset protection, protection from business debts, and can save money on taxes. With a little research, you can learn how to form an LLC in Arizona without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

To form a Limited Liability Company in Arizona, the Articles of Organization are filed with the Arizona Corporation Commission.  The LLC filing fee for both online and by mail is $50 for standard filing, which takes around three weeks.  For faster filing and the expedited fee of $35 reduces the filing time to 7 – 10 business days.

If you have questions, contact the Arizona Corporation Commission.

Phone Number: 602-542-3026
Email: filings.corp@azcc.gov

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

Guide to Forming an LLC in Arizona

The steps for filing online or by mail are mostly the same.  Below, we have step-by-step instructions on how to form an Arizona LLC.

To get started, either download the Arizona LLC Articles of Organization Form L010 or create an eCorp account from Arizona Corporation Commission website.  After logging in, Go to “Online Services” and then click on “Start a New Business.”

How to form an LLC in Arizona

On the next screen, select form an LLC or PLLC.

Related: What is a PLLC?

Arizona Corporation Commission - Form an LLC

The Limited Liability Company is the most common choice, but there is an option for a Professional Limited Liability Company.  A Professional Limited Liability Company is for state-licensed professionals such as doctors, lawyers, accountants, veterinarians, and more.

The Arizona Commerce Authority has more information on obtaining a Regulatory (Professional/Special) License.

Arizona LLC vs PLLC

Step 1: Entity Name

This section asks whether the LLC name has been reserved for the LLC.  Assuming the name hasn’t been registered yet, select No and then enter the business name you want to use in the Entity Name field.

The legal name of the LLC must include the following words or abbreviations:

  • Limited Liability Company
  • Limited Company
  • LLC
  • L.L.C.
  • LC
  • L.C.

There can’t be another LLC with the same name as the one you want.  If you pick a name that already exists, a message will pop up, saying, “The entity name is not available.” If there is a conflicting Trade Name, you must choose another entity name; otherwise, the system won’t let you move forward.

The name may not contain the words or abbreviations; “association,” “corporation,” or “incorporated” or use words such as “bank,” “deposit,” “credit union,” “trust,” or “trust company” unless the LLC is registered to operate as such. See the full list of Arizona LLC name requirements before finalizing your name.   If you aren’t ready to file for the LLC, you can file a name reservation up to 120 days before filing the LLC.  To do so, fill out the Application to Reserve Limited Liability Company Name with the Arizona Corporation Commission. The cost to reserve the name is $10.

Before selecting a business name, you may also want to see if a domain name is also available.

Reserve LLC Name Arizona

If you want to check available names before starting the formation process, read more about searching the Arizona business entity database.

Step 2: Entity Information

Entity Email Address – This is an optional field, or you can add your personal email address.

Effective Date – By default, the LLC is effective on the date submitted.  If you prefer to have the LLC officially start at a later date (up to 90 days), enter that date in the field

Character of Business – Here, you can select the activities the business will be engaged in.  If you can’t find one that is relevant or want to keep options open, choose “Any legal purpose.”

Duration – Most businesses intend to exist forever and would suggest “perpetual.”  If you have a specific end date in mind (typically used for investment-related businesses), choose the close date.

Arizona Entity Information LLC Formation

Step 3: Arizona Statutory Agent Information

A Statutory Agent (referred to as a Registered Agent or Resident Agent is some states)  is an individual or company with a physical presence in the state of Arizona and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc. on behalf of the LLC. This person or company is referred to as a Statutory Agent, more commonly known as a Registered Agent.  If using this company, they must be registered with the Arizona Corporation Commission.

If using a company that offers Registered Agent services, click on “yes.”  Otherwise, click “no.”

Any individual can be the Arizona LLC Statutory Agent. This can be the owner, family member, accountant, employee, etc.,  provided they have a physical street address in Arizona. They are available to receive service of process during normal business hours.  The agent ensures that the company receives all important documents such as tax forms, summons, summons, and other legal documents in a reasonable time frame should the LLC need to prepare for and respond to a lawsuit.

You are not required to pay for a registered agent. Any individual meeting the above requirements can be the agent, however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home or still employed.  Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce the number of unwanted phone calls and mailings.

The Arizona Statutory Agent must accept the confirmation email or accept the appointment in writing. This will be completed by submitting the Statutory Agent Acceptance form from the Arizona Corporate Commission within seven days of receipt.  Not confirming will delay the filing of the LLC until accepted.

Related: Do I Need a Registered Agent in Arizona?

Arizona LLC Register Statutory Agent

Step 4: Known Place of Business

Include the physical address for the LLC.  This has to be a physical street address in Arizona and not a PO Box or personal mailbox service.  The known place of business can also be the same as the Statutory Agent’s street address.

Arizona LLC Known Place of Business

Step 5: Manager/Member Information

Member Structure

The Manager/Member Information section asks if the LLC is Member-Managed or Manager-Managed.

Member-Managed LLCs have an active involvement in the day-to-day operations of the business.

Manager-Managed LLCs are managers of the LLC hired by the members to run the business, similar to a CEO of a corporation.

Most LLCs elect a member-managed management structure.

Principal Information

Enter the name, date the member started their term in office, address, and email for each LLC member (owners).  When all the information has been filled out, click on “Add Principal” to save that member’s information.  Add information for each of the members of the LLC.

Arizona LLC Member Managed

Step 6: Organizer Information

An LLC Organizer is involved with the formation of the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney, or accountant, but the initial members will all be listed as organizers.  The Organizer does not have to live in Arizona.

Only one organizer is required to sign the Articles of Organization.

Arizona LLC Organizer Information

Step 7: Upload Attachment

Unless a physical Articles of Organization has already been prepared, use the current information you have filled out.  This information will become the LLC’s official Articles.

It isn’t common to upload, so most filers will use Click “No” and then “Next.”

Filing an LLC in Arizona - Articles of Organization

Step 8: Signature

Here, the LLC organizer from Step 6 will agree that the submitted information is true, complete, and accurate and sign.

Step 9: Pay and File

Standard processing is about three weeks, and the expedited filing reduces it to 7-10 days.

All faxed and mailed Articles of Organization will need to be sent with a cover sheet. A PDF of the required cover sheet can be found on the Arizona Corporation Commission website in the “Miscellaneous Forms” section.

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Tasks after forming your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Publication Requirements

After the LLC is approved, it is typically necessary to publish an ad in a newspaper (Notice of Publication) to complete the registration process. There is no publishing requirement for businesses whose principal address is in either Maricopa County or Pima County.  LLCs in other counties are required to publish an ad in the legal section of a newspaper with general circulation in their county within 60 days of filing the Articles of Organization.  The newspaper has to be located in the same county as the LLC’s Known Place of Business, and an ad has to run in 3 consecutive weeks.

After the ad has run, an Affidavit of Publication will be sent, which should be kept with your business records. Although it’s optional, it’s generally recommended to record the Affidavit of Publication with the Arizona Corporations Commission.

The Arizona Secretary of State has a list of approved newspapers.

Prepare an Arizona LLC Operating Agreement

The operating agreement is an internal document that governs the framework of an LLC.  This document covers ownership percentage, ownership rights, member responsibilities, how profits and losses are distributed, and more.

There is no state law requiring an Arizona LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Learn more about an operating agreement and download an  Arizona LLC operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, register for business licenses and permits, file tax returns, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can register by phone, fax, or mailing IRS Form SS-4.

Related: How to Register for an Arizona EIN

Elect the LLC’s Form of Federal Income Taxation

One of the major benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, LLCs are pass-through entities. Instead of the LLC paying taxes on profits, the profits or losses flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can elect to be taxed as a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can elect to be taxed as a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, be sure to talk with an accountant to assess which one will be best for you.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Depending on the LLC age, an Arizona Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits to register for before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Transaction Privilege Tax License (TPT) – Sometimes referred to as a sales tax, the Transaction Privilege Tax is a tax on businesses from the Arizona Department of Revenue for the privilege of doing business in Arizona.

Related: What Business Licenses are Needed in Arizona?

File Annual Reports

An annual filing requirement for Arizona LLCs to file an annual report with the Arizona Corporation Commission.  The annual report updates ownership information and other details.

Related: How to File an LLC Annual Report