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For many new companies, forming as an LLC is the best option as it is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Additionally, LLCs often enjoy a lower tax rate than corporations. However, forming an LLC can be a little complicated, and each U.S. state has its own checklist for starting an LLC with minor procedural variations.
Forming an LLC in Arizona follows a fairly standard process of filing Articles of Organization with the Arizona Corporations Commission. The main difference from other states is that Arizona uses the term “statutory agent” rather than the commonly-used “registered agent” when referring to the individual or business entity that handles service of process on the LLC’s behalf.
In order to avoid a misstep in the filing process, follow these steps to start an LLC in Arizona, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Arizona step-by-step
1. Select a name for your Arizona LLC
Follow naming requirements
There are two major guidelines to follow when naming your LLC in the state of Arizona:
- The LLC’s name must be unique compared to those of existing business entities on file with the Arizona Corporations Commission.
- The LLC’s name is required to contain the words, “Limited Liability Company” or the abbreviations, “LLC”, “L.C.”, “LC”, or “L.L.C.”.
- The names of professional LLCs in Arizona must include the phrase, “professional limited liability company”, or the abbreviations, “PLC”, “P.L.C.”, “PLLC”, or P.L.L.C.”
Reserve your LLC name with the Arizona Corporations Commission
After selecting a name for your LLC, check its availability online using the Arizona Corporations Commission business name database. If the name is available, you may reserve it with the Arizona Corporations Commission for up to 120 days through the filing of an Application to Reserve Limited Liability Company Name. Filing the application can be done online or via postal mail. The online filing fee is $45, while the mail filing fee is $10.
Doing business under a trade name
Arizona LLCs have the option of doing business under an assumed trade name or “DBA” (doing business as) name rather than using its official name included in the LLC Articles of Organization.
There is no legal filing requirement to do business using a trade name in Arizona, however, the Arizona Secretary of State provides the option of registering a trade name online for a $10 filing fee.
2. Designate a statutory agent
As in every U.S. state, forming an LLC in Arizona requires the appointment of a statutory agent service (typically known as a registered agent) to handle state and federal legal documents and service of process on the business’s behalf.
The statutory agent must either be a state resident with a physical address in Arizona OR if the individual or business entity is based out-of-state, they must have a business office in Arizona.
Arizona requires an LLC’s appointed statutory agent to submit a completed Statutory Agent Acceptance form which can accompany the Articles of Organization when they are filed with the Arizona Corporations Commission.
3. File Articles of Organization
To legally form your LLC in Arizona, you must file Articles of Organization with the Arizona Corporations Commission. The articles can be filed online at the Arizona Corporations Commission website (you must first register an account), or completed and submitted through the mail. The filing fee for both online and postal mail filing is $50 (with an optional $35 for expedited service).
An Arizona LLC’s Articles of Organization must provide the following details:
- LLC name
- Whether the LLC is a standard LLC or professional LLC (professional LLCs must also include a description of provided services)
- Statutory agent name and address
- LLC principal office address
- Whether the LLC is managed by its members or managed by a specially-appointed manager
- Signature(s) of LLC organizer(s)
LLCs formed outside of Arizona that intend to do business in the state are required to register with the Arizona Corporations Commission. Registration of a foreign LLC can be done by completing the following steps:
- Comply with Arizona LLC naming requirements and determine that the LLC’s name is available for use in the state
- Appoint a statutory agent that is based in Arizona
- Complete and file an Application for Registration of a Foreign Limited Liability Company by postal mail, along with a certificate of existence from the LLC’s state of origin, and a $150 filing fee payment.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Arizona, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies. This document should describe the LLC’s business structure, establish the individual responsibilities and obligations of LLC members, and detail how the LLC will be run.
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of a single-member LLC). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and to perform a number of other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Publish a notice of LLC Formation in a local newspaper
Unless your LLC was formed in Pima or Maricopa counties, newly-formed Arizona LLCs must publish a Notice of LLC Formation in a local newspaper with general circulation in the county in which it operates within 60 days of the approval of its Articles of Organization. This is an important step as neglecting to publish a Notice of LLC Formation may result in the legal dissolution of the LLC.
Maricopa County and Pima County-based LLCs are not required to publish a Notice of LLC Formation because the Corporations Commissions in those counties publishes recently formed LLCs on their websites, thereby fulfilling the obligation.
7. Fulfill your Arizona LLC’s additional legal obligations
Once an LLC is registered, it is important that its members devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
Registering for state taxes
Certain Arizona LLCs–such as those that have employees or collect sales tax from selling products–are obligated to register with the Arizona Department of Revenue. Registration can be done online or through the mail.
Your LLC may be required to obtain one or more state or locally-issued business licenses, permits, or certifications depending on the nature of the business.
Take a look at the Arizona Department of Commerce Licensing Guide for information on how to obtain state licenses, and consult with a city clerk for more details on municipal or county licenses and permits.
Arizona LLC checklist
An Arizona LLC’s name must comply with the following guidelines:
- Must include the words “Limited Liability Company” or the abbreviations, “LLC”, “L.C.”, “LC”, or “L.L.C.” (professional LLCs must include one of the following in their name: “professional limited liability company”, “PLC”, “P.L.C.”, “PLLC”, or “P.L.L.C.”)
- Must be distinguishable from the names of existing business entities on file with the Arizona Corporations Commission.
Required formation documents and filing fees:
- Application to Reserve Limited Liability Company Name – Online fee: $45, Postal mail fee: $10.
- Articles of Organization – $50 filing fee (plus an optional $35 fee for expedited processing)
- An LLC is created in Arizona through the filing of Articles of Organization with the Arizona Corporations Commission.
Additional legal obligations:
- Publish a Notice of LLC Formation: Must be done within 60 days of the approval of an LLC’s Articles of Organization (LLCs formed in Pima County and Maricopa County are not required to complete this step).
- State tax registration: Register online through the Arizona Department of Revenue
- State and local business licenses: The Arizona Department of Commerce Licensing Guide includes information on state business licenses and certifications. For local requirements, check with the city clerk.