If you’re ready to launch a new business in Arizona, you might feel a bit lost when it comes to the legal process. No one particularly likes cutting through red tape or filing paperwork. However, to ensure your business starts on the right foot, you’ll need to ensure you do everything required by the state.
Thankfully, forming an Arizona limited liability company (LLC) is fairly straightforward and affordable. If you complete each of the required steps in the correct order, you’ll form your new LLC without too much stress.
With a clear understanding of Arizona’s LLC formation requirements, you can launch your new company quickly and confidently. This comprehensive toolkit will show you exactly what you need to do to form a new LLC in Arizona.
Here, we’ll guide you along every step of the LLC formation process. With our help, you’ll complete each requirement successfully before moving to the next stage. We’ll also discuss how the right LLC partner can support you through the business formation process and provide value to your company once it’s up and running.
Once you’ve formed your new Arizona LLC, you’ll be able to focus on what matters: growing your business. This guide simplifies LLC formation so that you can start serving customers as quickly as possible.
The 6 steps to form an LLC in Arizona:
In Arizona, forming an LLC requires registering your new business with the Arizona Corporation Commission. This process enters your new company into the public record and provides the information necessary for the state to communicate with and regulate your new company. Before you file your Articles of Organization, you’ll need to choose a statutory agent to interact with the government.
After you file the required paperwork, you’ll still have some other boxes to check. For example, you’ll likely want to draft an Operating Agreement and register your company with the IRS.
There’s no need to feel overwhelmed by these requirements. Below, we’ll break everything down into six simple steps. By taking care of each component, you’ll have your new LLC in no time.
Step 1: Name Your Arizona LLC
Choosing a name is the first step on your LLC formation journey. Selecting the perfect business name is more than just branding. Without a distinct name, the Arizona Corporation Commission won’t let you register your business. As a result, you’ll need to decide what to call your company before forming your LLC and submitting the necessary paperwork. Otherwise, you might have to start over.
Unfortunately, you can’t just choose the first name that pops into your mind. You’ll have to consider two official requirements when picking your LLC’s name:
- Your LLC’s official name must be unique in the state of Arizona. If a business is already using the name you prefer, you’ll need to go with another option. To check if a name is available, use the Corporation Commission’s business entities search. You can also consult a more specific list of statutory naming requirements to ensure your chosen name satisfies Arizona state standards (including what words can and can’t be included).
- The final words of your company name must be some form of the phrase “LLC.” You have plenty of options to meet this requirement. For example, you can spell out “limited liability company” or write out “limited company” instead. Alternatively, you can go with the standard “LLC” or punctuate it formally as “L.L.C.” However you choose to write it, the phrase must come at the very end of your company name (e.g., “Arizona Athletics, L.L.C.”).
Once you select a name, consider reserving it so that nobody takes it before you form your business. To do this, you’ll need to complete an Application to Reserve Limited Liability Company Name, which will save your chosen name for 120 days. Within that window, you’ll have enough time to file your Articles of Organization and form your LLC.
To file your name reservation, you can mail the form to the Arizona Corporation Commission or submit the document online. Filing by mail costs $10, with an optional $35 fee for expedited processing. The online reservation costs $45 and automatically includes expedited service.
When choosing a name, you might also want to take a few other considerations into account. For example, you may want to check to see if your desired domain name is available. For example, if “ArthursAppliances.com” is already taken, Arthur might want to come up with another name, even if “Arthur’s Appliances, LLC” is available as a business name with the Arizona Corporation Commission. While you can always go with a “.net” or “.co” option, there’s nothing like getting the “.com” top-level domain to give your business legitimacy and recognition.
You should also check to see if social media handles are available. Many businesses market on platforms like Facebook, Instagram, and Pinterest, so snagging the appropriate social media names is crucial for effective online marketing.
Finally, business owners should check with the United States Patent and Trademark Office (USPTO) to see whether someone already has a federally registered trademark for their ideal business name. Even if the domain, social media handles, and business name are available in Arizona, you don’t want to go through all of the trouble of forming your business just to learn that some company in another state already has the trademark for your business’s name, preventing you from effectively marketing your new LLC. Visit the USPTO’s trademark search database to see whether anyone has already registered a trademark for your desired business name. It’s also possible for a name to be trademarked at the state level.
Note that you should also do this if you are interested in using a DBA or “Doing Business As.” A DBA is another name to use for your business. This will also need to be registered via the Secretary of State’s website.
Step 2: Appoint a Statutory Agent in Arizona
Consistent with other states, Arizona requires new LLCs to designate a statutory agent as part of the business formation process. Many states call this party a “registered agent.” You’ll need to list your statutory agent and their address on your Articles of Organization.
The primary purpose of a statutory agent is to communicate with the Arizona Corporation Commission and receive documents related to legal proceedings on behalf of your business. If your business is subpoenaed or sued, the state of Arizona must know how to get the paperwork to your LLC’s leadership.
A statutory agent might be a person or business entity, but they must have a registered office address in the state of Arizona. This address cannot be a P.O. box because process servers usually deliver legal documents in person — you’ll need to designate a physical address where the agent can receive essential paperwork. Additionally, your chosen statutory agent must accept the appointment in writing by completing a Statutory Agent Acceptance form, which you will submit along with the Articles of Organization.
Many business owners assume they should serve as the statutory agent for their company and use their business’s primary location as the registered office address. While this approach sounds reasonable at first, it can have serious downsides and unintended consequences.
For example, you don’t want a service of process to show up with court papers in the middle of a crucial customer presentation or an important board meeting. Plus, if you work from home or don’t have an office yet, you may not want to put your home address in the public record — you have enough junk mail already. Statutory agent acceptance of your important documents can help you focus on hiring employees, serving customers, and growing your business.
Working with a designated statutory agent like ZenBusiness also enables you to keep your primary office outside the state of Arizona. If your headquarters is in California, Nevada, or elsewhere, you’ll need to work with a third party with an in-state business address.
There’s an additional benefit if you’re an Arizona LLC owner: All but two counties in Arizona require you to meet a publication requirement when forming your LLC (more on that below). When you use ZenBusiness as your statutory agent, our Arizona office is located in one of the two counties that don’t require publication, meaning you avoid the hassle and costs of the state’s publication requirement.
Even if your offices are within Arizona state limits, working with a statutory agent prevents you from needing to constantly amend your Articles of Organization with your new address each time you move. Instead, you can keep your statutory agent’s address on file.
Accordingly, many business owners decide to hire an outside statutory agent service who can receive paperwork on their LLC’s behalf. Working with a designated agent is quite affordable and prevents future headaches while ensuring your business remains in good standing.
If you’ve already listed yourself as your business’s statutory agent and want to start working with a professional instead, you’ll need to file an LLC Statement of Change of Principal Address or Statutory Agent with the Arizona Corporation Commission. Luckily, the change request is just $5 for Arizona LLCs.
Step 3: File Arizona Articles of Organization
Once you choose a name and a statutory agent, you’ll have all the information necessary to file the formal business formation paperwork with the Arizona Corporation Commission. Thankfully, the paperwork is pretty painless. The official document is just two pages long.
You’ll need to file your Articles of Organization online (you’ll need to create an eCorp account first) with the Arizona Corporation Commission and pay a fee of $50. You can also submit your Articles of Organization on a paper form — the cost is also $50, but you’ll also need to include a cover sheet, the Statutory Agent Acceptance form, and one form if your LLC will be member-managed, a different form if it will be manager-managed (more on that below). For expedited processing, add another $35.
If you want to mail your Articles of Organization to the Arizona Corporation Commission, send your filled-out form and a check to the following address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
To complete the form, have the following information handy:
- Your LLC’s name
- Your statutory agent’s name and address. A separate Statutory Agent Acceptance form (M002) must be signed and submitted along with these Articles of Organization.
- Whether your LLC will be a professional LLC (for lawyers, medical professionals, etc.)
- The mailing address for your business (can be different than the registered address)
- An election as to whether your LLC will be member-managed or manager-managed. A member-managed LLC is governed by the LLC owners; a manager-managed LLC is managed by a manager who is appointed or hired by the owners.
- The signature of the LLC’s organizer
You only need to file your Articles of Organization once. However, if you end up making any changes down the road — such as replacing your statutory agent or switching from a member-managed to a manager-managed LLC — you’ll need to file Articles of Amendment with the Arizona Corporation Commission along with a $25 fee.
Step 4: Create an Operating Agreement
Like most other states, Arizona doesn’t require new LLCs to have an Operating Agreement before doing business. However, we strongly advise that business owners draft and adopt an LLC Operating Agreement, whether you’re operating alone or with other business partners.
Operating Agreements clearly define the terms of ownership and management, providing additional protection and options for everyone involved. Without an Operating Agreement, you’ll be subject to Arizona’s default rules for LLCs, which might not accurately reflect your business’s nature.
Here are just a few of the benefits an Operating Agreement offers to business owners:
- Operating Agreements prevent and resolve conflicts between LLC members by clearly indicating the powers and privileges of each member.
- Creating an Operating Agreement empowers you to customize your business’s rules and procedures to serve your LLC’s interests, requirements, and expectations.
- An Operating Agreement can define your LLC’s management structure. While some companies choose to be member-managed, others designate a manager to run day-to-day operations.
- An Operating Agreement helps separate your business from your personal assets in the courts’ eyes, sheltering your savings from legal liability.
- A well-drafted Operating Agreement specifies the rules and procedures to guide the LLC if you want to add or remove members from the business.
- Adopting an Operating Agreement can improve your chances of securing debt or investment.
While some Operating Agreements are only a page or two, Operating Agreements for more complex businesses can reach 50 pages or more. Regardless of the complexity of your business, your Operating Agreement should contain the following concepts:
- Ownership allocation: While many LLCs split ownership evenly between the members, Arizona law permits business owners to allocate ownership, profits, and losses however they wish. For example, if you have a multi-member LLC, you could decide that one member has 60% ownership, while the other two members each have 20%.
- Management regime: In Arizona, you can choose to have a member-managed or manager-managed LLC — you’ll have to declare your election on your Articles of Organization. In member-managed LLCs, the business’s owners take charge of everyday operations. Alternatively, in a manager-managed LLC, the owners appoint a designated manager responsible for the business’s management. However, members in a manager-managed LLC still tend to keep the authority to make high-level decisions, like dissolving the LLC or replacing the manager.
- Authority to act on behalf of the business: Your Operating Agreement should describe who can take action on the business’s behalf. Who can sign checks for the LLC? Who is in charge of negotiating major agreements? What percentage vote is required for routine and major decisions? Regardless of whether your LLC is member-managed or manager-managed, your Operating Agreement should clearly outline each individual’s responsibilities and authorizations.
- Admitting new owners: If your business is successful, you might invite new individuals or businesses to join your LLC as business partners. If you want to admit new members into your LLC, your Operating Agreement should specify the requirements and processes to join the membership. You’ll also want to lay out the procedure for removing members, buying out their interest, and repaying them for any remaining debt.
- Dissolution and winding up: At some point, you may want to close your business and move on to something new. Your Operating Agreement can help make this process easier by containing provisions for dissolving and winding up the LLC. Common issues upon dissolving a business include selling the business’s assets, paying off debt, and distributing remaining profits among the existing members. You’ll also need to file Articles of Dissolution with the Arizona Corporation Commission.
Step 5: Apply for an EIN
After officially forming your new LLC with the Arizona Corporation Commission, you’ll need to register with the federal government and get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is like a Social Security number for your business, allowing your business to hire employees, apply for a business bank account, and pay taxes.
If you operate your LLC alone and have no employees, you might not technically need to get an EIN. However, if your LLC has any employees or multiple members, you need to obtain an EIN. Moreover, even if an EIN isn’t technically required for your LLC, it may help in meaningful ways, enabling you to open a business bank account or obtain debt financing.
Thankfully, you can apply for an EIN through the IRS’s website and have it issued immediately. Plus, the application process is free.
You can also submit your EIN request by mail, but the turnaround time is at least four weeks. As a result, you may want to apply online to save some time and start doing business as quickly as possible.
Finally, if you have employees or collect taxes, you’ll need to register with the Arizona Department of Revenue. Plus, you’ll need to report new hires to Arizona’s New Hire Reporting Center.
Step 6: Meet the Arizona LLC Publication Requirement
Unlike many other states, Arizona has a publication requirement, notifying the state that you’ve formed an LLC. New LLCs must publish a notice of LLC formation in one of Arizona’s approved newspapers in three consecutive publications, starting within 60 days of receiving notice from the Arizona Corporation Commission.
The notice must include the following information:
- LLC name and address
- 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 three consecutive publications, the newspaper will send you and the Arizona Corporation Commission an Affidavit of Publication, proving that your LLC has met the publication requirement. At this point, you’re all finished. Just make sure to keep the affidavit for your records.
If you’re forming an LLC in either Maricopa County or Pima County, things are easier: You don’t need to meet the publication requirement if you live in either of those counties. Instead, the Arizona Corporation Commission posts notice of your LLC’s formation on the Arizona Corporation Commission’s Public Notice Database. This is free, so you also save money on publication costs. If you choose to use ZenBusiness as your statutory agent, our Arizona office is located in Pima County, meaning you avoid the publication requirement and the associated fees altogether.
How much does it cost to start an LLC in Arizona?
As mentioned earlier, the cost of filing your LLC’s Articles of Organization is $50, with optional expedited service costing an extra $35. If you reserve your business name before filing, you can add another $10 to $45, depending on processing speed. Therefore, total fees for forming an LLC in Arizona typically range between $50 and $130.
Of course, that range of costs doesn’t account for the value of your time as you navigate the LLC formation process. Plus, if you decide to draft an Operating Agreement or hire an outside statutory agent, you’ll need to spend more for those services. That’s where ZenBusiness can be a huge help — we provide practical support and expertise, holding your hand through the entire LLC formation process.
What are the benefits of an LLC in Arizona?
LLCs are one of the most popular business structures in Arizona because they provide limited liability protection, operational flexibility, and favorable taxation.
Arizona LLCs empower business owners to:
- Protect their personal assets from legal liability and business debts.
- Take advantage of flexible management and ownership structures tailored to the nature of their business and its owners.
- Avoid costly corporate maintenance and reporting requirements.
- Pay only personal taxes, rather than paying taxes on corporate profits and individual earnings.
- Legitimize their business and improve their chances of finding investors and lenders.
How is an LLC taxed in Arizona?
LLCs provide the benefit of avoiding “double taxation.” The business pays no income tax, instead passing the income straight through to the LLC’s owners. Then, each owner pays taxes on the earnings as regular income.
The LLC tax structure can save business owners a significant amount of money compared to traditional C corporations. However, LLCs can elect to be taxed as a corporation if they wish, subjecting owners to double taxation. You can make the election when you register with the IRS and obtain an EIN.
The IRS administers federal taxes based on each member’s share in the LLC. So, if you own 75% of an LLC and are entitled to 75% of the profits, the IRS will tax you on 75% of your LLC’s earnings. Any losses will be allocated similarly.
Importantly, LLC owners might be required to pay self-employment tax to the IRS to make up for the fact that they don’t pay taxes like those related to Medicare or Social Security.
When it comes to income tax, Arizona upholds pass-through taxation unless the LLC elects to be taxed as a corporation. Nevertheless, Arizona LLCs are subject to a variety of non-income-related taxes.
Arizona business taxes may include:
- State employer taxes (if you have employees)
- State sales tax (if you sell goods)
- State unemployment tax (if you have employees)
- Taxes related to certain products (such as liquor or tobacco)
- Taxes for using certain minerals or other public resources
For example, LLCs in Arizona are required to pay the transaction privilege tax (TPT). While the TPT resembles a sales tax, it’s actually a tax for the privilege of running an LLC within Arizona. Not every LLC is subject to the TPT, but many are. Examples of businesses that may need to pay TPT include retail stores, restaurants and bars, hotels and motels, advertising, property rentals, construction contractors, land developers, transportation companies, printers and publishers, communications companies, transportation companies, and more.
If your business engages in activities subject to Arizona’s TPT, you’ll need to get a license from the Arizona Department of Revenue. Plus, you might need to pay additional taxes based on your city — however, the Department of Revenue will collect city tax on the city’s behalf. To understand your state tax burden, consider visiting the Arizona Department of Revenue to get more information.
Arizona LLC FAQs
- What is the processing time to form my Arizona LLC?
According to the Arizona Corporation Commission, expedited processing usually takes approximately five business days, while standard processing can take several weeks.
- Do I need to file my Operating Agreement with the state of Arizona?
No, you do not need to file your LLC’s Operating Agreement with the state of Arizona. In fact, Arizona doesn’t require LLCs to create an Operating Agreement at all. However, drafting one has a wealth of benefits, including legitimizing your business, preventing future disagreements, and customizing the LLC’s rules.
- What tax structure should I choose for my Arizona LLC?
Most entrepreneurs elect pass-through taxation at the state and federal levels — owners pay state and federal taxes on the income they earn from the business, but the LLC does not pay taxes as an entity. If an LLC has multiple members, the IRS classifies it as a partnership for tax purposes, requiring each partner to pay his or her fair share. You can customize ownership percentages in your LLC’s Operating Agreement.rnrnSome LLCs (particularly those with very high earnings) may choose to file taxes as corporations. This option has some distinct tax advantages, which you can learn more about here. We suggest working with a professional who can explain the benefits and drawbacks of each tax regime.
- Does Arizona allow a Series LLC?
Arizona state law doesn’t permit the Series LLC structure, in which several separate LLCs operate under one overarching “umbrella” LLC entity. The individual LLCs (sometimes called “cells”) may have different members, assets, and obligations. In theory, individual cells and the umbrella LLC are insulated from the debts and legal liabilities of the others, providing value protection for some small businesses.
- How do I dissolve my Arizona LLC?
If you decide to dissolve your business, you’ll need to file the Articles of Termination with the Arizona Corporation Commission. Plus, you’ll need to pay off any business debts, sell off assets, and distribute any remaining profits or losses between the members. A well-drafted Operating Agreement should describe the dissolution procedure in detail.
- How do I transfer ownership of an LLC in Arizona?
The process for transferring ownership of an LLC should be in your Operating Agreement. In general, two primary documents should accompany each transfer. First, you should draft a purchase agreement whereby the previous owner sells its LLC interests to the buyer. Next, you should amend the Operating Agreement to reflect the change in ownership (along with any other changes desired by the new collective membership).
- Can a DBA be assigned to an LLC in Arizona?
A DBA — or a “Doing Business As” name — is a business name LLCs can use as their publicly facing brand. The Arizona Corporation Commission doesn’t handle DBAs. Instead, you should check with the Arizona Secretary of State to confirm the name isn’t already taken. Then, you can submit an online Trade Name Application to get your DBA.
- How do I remove a member from an LLC in Arizona?
Your Operating Agreement should outline your LLC’s procedures for removing members from the business, including any voting or cause-related requirements. Additionally, you’ll need to follow your Operating Agreement’s procedures outlining how the removed member’s share will be distributed among the remaining members or offered for sale to third parties. Finally, you should amend your business’s Operating Agreement to reflect the LLC’s change in membership.
- Do I need to file an annual report for my Arizona LLC?
Unlike many other states, Arizona doesn’t require LLCs to file annual reports with the Arizona Corporation Commission. This saves owners of Arizona LLCs the headache of needing to remember when to file and pay yearly filing fees.
- Do I need a business plan for my Arizona LLC?
You don’t need a business plan to register with the Arizona Corporation Commission or legally form your LLC. However, drafting a business plan might make it easier for you to find investors or lenders who want to help you jump-start your business. A business plan outlines your new LLC’s structure, goals, and plans. A good business plan also contains information on the business’s founders, market research, and potential financing sources.
- How do I find customers for my Arizona LLC?
Once you’ve formed your business with the Arizona Corporation Commission, received the necessary business licenses, and obtained your EIN, you’re going to want to start marketing your goods or services. Before reaching out to potential customers, try to learn as much as possible about your prospects.rnrnWhen you understand their likes, dislikes, dreams, and fears, you’ll create products and services they’ll want to buy. When developing your offerings and marketing materials, don’t be afraid to test new strategies to see what works best. It’s difficult to predict what your customers will like, so keep experimenting until you find what resonates with your ideal customers.