- Step 1. Naming Your Arizona LLC
- Step 2. Choosing a Statutory Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- Arizona LLC Resources
- Arizona LLC FAQs
Step 1. Naming Your Arizona LLC
One of the most important steps in creating your Arizona LLC is naming it. The name that you choose needs to be completely distinct from other businesses in the state, in addition to following some of the naming rules below.
Legally Required Designation
In accordance with Arizona LLC regulations, the name of your LLC must contain the phrase “limited liability company” or one of the following abbreviations:
As we mentioned previously, your LLC’s name needs to be completely distinct from any other business’s name in Arizona and shouldn’t risk any type of infringement. To help you find an acceptable name, you can use the database search on the Arizona Corporations Commission website.
You may also want to conduct an available domain name search while you are looking for an LLC name. Even if you aren’t sure that you want a business website immediately, it is a good idea to purchase one ahead of time to reserve it for when you will need it.
If you wish to reserve your LLC’s name ahead of time, you can file an Application to Reserve a Limited Liability Company Name. This application can be filed either online or through the mail and will reserve your name for up to 120 days. To file online, search the available name database and then select the option to reserve a name, filling out the form. To mail the form in, print it out and mail it to the address below. If you need more help, extra instructions can be found here.
There is a $10 filing fee for the form if you file by mail and a $45 fee for filing online, due to an extra $35 expedited online service fee. If you file online, your form will be processed immediately.
Arizona Corporation Commission
1300 W. Washington St.
Phoenix, Arizona 85007
When choosing an LLC name, keep in mind that you are not able to include any words that run the risk of confusing your business with a government entity. This can include words like “FBI,” “IRS,” “Treasury,” or “State Department.”
You should also be aware that using words such as “bank,” “attorney,” or “acupuncturist” may require the presence of a properly licensed individual in your LLC and filing additional paperwork.
Using an Assumed Name
In Arizona, you can use an assumed, or DBA (doing business as), name for your LLC. This means that you will continue using the legally registered LLC name on all official documents, but can use a different registered name when interacting with the public.
You are not required to register your DBA name in Arizona and can simply start using it when conducting business in the state. If you choose, you can register your LLC’s assumed name with the Arizona Secretary of State’s office to let others know that it is in use.
This form can be completed online and has a $10 filing fee. The registration is valid for 5 years before needing to be renewed.
Step 2. Choosing a Statutory Agent
Also referred to as a registered agent in most other states, a statutory agent is required for every LLC established in Arizona. You can appoint any individual, any member of your LLC, a domestic corporation or LLC, or a registered agent service that is authorized to conduct business in Arizona as your statutory agent. As long as your statutory agent has a valid state address and is available during regular business hours, they are eligible to be your statutory agent.
Your statutory agent will be responsible for receiving all legal documents, government communications, and necessary tax documents, acting as a contact point between your LLC and federal agencies or the state of Arizona. They will also be the responsible party that is contacted in the event of a lawsuit against your LLC.
Once you have your statutory agent chosen, they will need to sign a Statutory Agent Acceptance agreement. This document can be mailed separately to the address below, but you should aim to file it along with your Articles of Organization in the next step. There is no filing fee for this form, but there is a $35 expedited service fee if you want it processed faster.
Arizona Corporation Commission
1300 W Washington St
Phoenix, AZ 85007
Step 3. File Your Articles of Organization
Filing your Articles of Organization with the Arizona Corporations Commission is the last step into legally establishing your LLC in the state. Below, you can find some of the information that may be required on this form.
- Whether or not your LLC is regular or professional
- Your LLC’s name
- Your LLC’s description of services (if professional)
- Your LLC’s statutory agent’s name and address
- Your LLC’s business address
- Whether your LLC will be member-managed or manager-managed
- The signature of your LLC’s organizer
This form can be submitted online or through the mail. Remember that you will need to include your Statutory Agent Acceptance form with your Articles of Organization if you did not mail it in ahead of time.
You can file your Articles of Organization online or through the mail, and there is a $50 filing fee associated with the form. You may also want to pay an additional $35 for expediting the processing.
To file your Articles of Organization online, create an account on the Arizona Corporations Commission’s eCorp filing system. From there, you can log in and access the online document, filling it out and submitting it. Keep in mind there may be additional credit or debit card processing fees with this filing method.
If you want to file your Articles of Organization by mail, you will need to print off this form and fill it out. Then, place the completed form, your Statutory Agent Acceptance form, and a check for $50 made out to the Arizona Corporations Commission into an envelope addressed to:
Arizona Corporation Commission
1300 W. Washington St.
Phoenix, Arizona 85007
Step 4. Create an Operating Agreement
Arizona does not require you to create an operating agreement for your LLC, but you may want to consider creating one anyway. This document sets clear guidelines for how exactly your LLC is managed, the rights that members or managers have, and what to do in the case that your LLC dissolves or experiences a lawsuit.
If you choose not to create an LLC operating agreement, Arizona LLC law will dictate how your LLC is to be handled in the event of dissolution, conflict, or lawsuit. This may not be in your best interest, so creating an operating agreement is a good idea to protect yourself and your assets.
Additionally, most business bank accounts, loan applications, and other business services will require you to have an operating agreement on hand to demonstrate your LLC as a separately operating business entity before you can secure funding or business services.
Step 5. Get an EIN/Tax ID Number
Once your LLC is legally established in Arizona, you will need to apply for a Tax ID number, also known as an EIN (Employer Identification Number) from the IRS. Any LLC that has more than one member, any single-member LLC that wants to hire employees, or any entity chooses to be taxed as a corporation is required to apply for an EIN.
It is free to apply for your EIN with the IRS, and you can file the application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you will need to file for your EIN through the mail.
Your EIN will be used to identify your business to the IRS on all tax documents and necessary government filings; the number acts much like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts, or apply for business funding, you will need an EIN.
The quickest and easiest way to apply for your EIN is online, as you will receive your number once your application is completed. Visit the IRS website to apply for your EIN for free.
You will need to fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
After you have filed your Articles of Organization and legally established your LLC, there are some additional requirements that you may need to meet in order to keep your business running.
Meet the Arizona Publication Requirement
Different from most other states, Arizona has a publication requirement that newly-formed LLCs need to meet. Your LLC must publish a Notice of LLC Formation in one of Arizona’s approved newspapers. The newspaper that you choose must be circulating in the same county as your Statutory Agent’s address and the notice must appear in 3 consecutive publications, starting within 60 days of receiving approval notice for your Articles of Organization.
Your LLC publication notice must include the information below:
- Your LLC’s name and address
- The name and address of your LLC’s statutory agent
- Whether your LLC is member-managed or manager-managed
- Names and addresses of managers or members, depending on the management structure
After the 3 publications have concluded, you will receive an Affidavit of Publication from the Arizona Corporations Commission. If you don’t meet this publication requirement, your LLC may be subject to dissolution by the state.
An exception to this rule happens when your LLC is formed in either Maricopa County or Pima County, or your statutory agent’s address is in either of these counties. When this is the case the Arizona Corporations Commission will post notice of your LLC’s formation on the Public Notice Database, meaning that LLCs in these two counties will not need to contact a newspaper to meet the publication requirements themselves.
Keep in mind that it will cost between $60 and $120 to pay for your notice to be published in each circulation of the newspaper, so be sure to budget for this when you are establishing your LLC. You can access a list of approved Arizona newspapers here.
Separate Your Business Finances
A business credit or debit account can help keep your LLC’s finances separate from any personal ones, establishing the LLC as an independently operating business. It is not required by Arizona to open a business bank account, but it may be a good idea to establish one anyway.
You will most likely need to show your Articles of Organization, Operating Agreement, EIN, or possible other LLC documents to open a bank account for your LLC. Compare all of your options before making a choice on which bank account to open, as different banks will have varying minimum required balances or credit spending limits.
Keep up With Federal and State Taxes
Your LLC will likely be liable for both federal and state taxes while it is in operation. Make sure you understand your financial obligations in order to avoid any major penalties or fines.
Federal Tax Requirements
There are several different tax structures you can choose from to use in your LLC that may meet different company needs, since each tax structure comes with its own benefits and drawbacks. This article can help you gain an in-depth understanding of the differences between each type and help you decide which is best for you.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means that you will be expected to file Schedule C along with your individual income tax return to declare any income that you receive through your LLC. When using this tax structure, you should keep in mind that you will most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid any IRS fines.
If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You will need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
Arizona Business Taxes
Most LLCs that are operating in Arizona will need to pay the Transaction Privilege Tax (TPT) through the Arizona Department of Revenue. This tax functions similar to a sales tax, and all businesses in the state are required to pay it for the privilege of doing business in Arizona; depending on your LLC’s business, you may also need to pay Use Tax through the Department.
If you do need to pay the TPT, you will also need to register for a TPT license. This license will come from the Arizona Department of Revenue, and you may be required to register for a similar license in the county or city where your LLC is operating.
You can find more information on how to register for these taxes and licenses, including how to calculate your payments and determining who is liable for TPT taxes on the Department’s website here.
State Employer Taxes
If your LLC will have employees, you may be required to pay withholding tax and unemployment insurance tax. You can register for and pay withholding tax through the Arizona Department of Revenue website.
Unemployment insurance taxes can be registered for and paid through the Arizona Department of Economic Security. This website also has more information about calculating your owed taxes and determining which employers are liable for paying unemployment insurance taxes.
Acquire Necessary Permits and Licenses
While Arizona doesn’t have a state-wide business license, you may be required to obtain a local city or county level business license for your LLC. You can check this directory of licensing information and contact the appropriate source to figure out what type of permit, if any, your business needs. You may also be subject to professional licensing requirements depending on the nature of your LLC.
Additionally, you may be required to obtain certain permits and licenses for your LLC on a federal level. Whether this is needed depends mostly on the type of business you are running and the services you are offering. For help determining if you need to meet additional federal licensure requirements, you can use the directory on the US Small Business Administration’s website.
Arizona LLC Resources
The following resources may help you as you work through the step-by-step process of setting up your LLC in Arizona.
- Available LLC name search
- Available domain name search
- Reserve an LLC name
- Apply for a DBA name
- Statutory Agent Acceptance form
- Articles of Organization form
- Arizona Corporations Commission eCorp filing system
- IRS EIN free file
- Approved Arizona newspapers
- Arizona Department of Revenue
- Arizona Corporations Commission
- Arizona Department of Economic Security
- Directory of Arizona licensing contacts
- S. Small Business Administration
Arizona LLC FAQs
Checking out these frequently asked questions can help you get a better idea of the LLC setup process and answer any lingering worries.
In Arizona, it costs $50 to file your Articles of Organization to establish your LLC, plus an extra $35 optional expedited servicing fee. You may end up paying more to reserve a name – $10 plus an extra $35 fee for online filing – or a $10 fee to register a DBA name for your business.
Additionally, you will need to give a Notice of LLC Formation after your Articles of Organization have been approved (if you are outside of Maricopa County or Pima County), which can cost $60 to $120 per publication. 3 consecutive publications are required.
The cheapest way to start an LLC in Arizona is to file your Articles of Organization at standard processing without reserving an LLC name ahead of time or registering a DBA name. This will only cost you $50, plus any applicable fees for giving your Notice of LLC Formation.
How much your Arizona LLC pays in taxes depends on the individual tax structure you have set up. Keep in mind that you may be required to pay the Arizona Transaction Privilege Tax in addition to any federal and state income taxes or employer taxes.
If you are confused about your tax obligations, it is a good idea to consult with an account or professional financial advisor to ensure that you meet all the tax requirements for your LLC and avoid major penalties.
In Arizona, your LLC is not required to file any state annual reports or pay any type of annual registration fee.
If you are done conducting business under your LLC in Arizona, you will need to file the Articles of Termination with the Arizona Corporations Commission. There is a $35 filing fee associated with this form.
You may also need to consult your operating agreement to understand and complete the agreed-upon steps for closing down and stopping your LLC’s operation in the state.