Alright, buckle up because we’re about to talk about creating an LLC in Arizona. I’m going to break it down for you step by step on how to create an LLC in the Grand Canyon State. So, get ready to rock and roll!
First things first, let’s define what an LLC is. An LLC, or Limited Liability Company, is a type of business structure that provides the personal liability protection of a corporation with the tax benefits of a partnership. Essentially, an LLC separates the personal assets of the owners from the business assets, meaning that if the business is sued, the owner’s personal assets are protected.
Three Things To Be Aware Of When Starting Your LLC
The video below covers three things you must know when creating your LLC.
- Commingling Funds
- Registered Agent
- Piercing the Corporate Veil
If you are unfamiliar with these terms, please watch the video below.
Table of Contents
Let’s get to the nitty-gritty of creating an LLC in Arizona.
5 Steps to Create an LLC in Arizona
It’s important to consider factors such as your business plan, industry-specific requirements, and local business regulations when starting an LLC in Arizona. By taking the time to properly structure and form your LLC, you can lay the foundation for a successful and protected business venture.
- Choose a Name for Your LLC. The first step in creating an LLC in Arizona is to choose a name for your business. The name must include the words “Limited Liability Company” or an abbreviation of those words, such as “LLC.” You can search the Arizona Corporation Commission’s online database to make sure your desired name is available.
- File Articles of Organization with the Arizona Corporation Commission. Next, you must file Articles of Organization with the Arizona Corporation Commission. This can be done online or by mail, and the filing fee is currently $85. Your Articles of Organization must include your LLC’s name, the name and address of your registered agent, and the name and address of each member of the LLC.
- Obtain an EIN from the IRS. An EIN, or Employer Identification Number, is a unique nine-digit number that the IRS assigns to businesses for tax purposes. You’ll need an EIN to open a business bank account and to file your LLC’s taxes. You can obtain an EIN for free from the IRS.
- Create an Operating Agreement. While not required by Arizona law, it’s highly recommended that you create an Operating Agreement for your LLC. An Operating Agreement outlines the ownership and management structure of your LLC, as well as the rights and responsibilities of each member.
- Obtain any Necessary Business Licenses and Permits. Depending on the nature of your business, you may need to obtain additional business licenses and permits from the state of Arizona or your local government.
Remember, LLCs are a great choice for many businesses, but it’s always a good idea to consult with a legal or financial professional to determine if an LLC is the best choice for your specific situation.
Costs to Open an LLC in Arizona
I can tell you that the cost of opening an LLC in Arizona can vary depending on a few factors. Here’s a breakdown of the potential costs involved in creating an LLC in Arizona:
- Filing fee: The filing fee for Articles of Organization in Arizona is currently $85. This fee is required to be paid to the Arizona Corporation Commission when you submit your LLC formation documents.
- Name reservation fee: If you want to reserve your LLC’s name before filing your Articles of Organization, there is a $10 fee to do so. This fee is not required, but it can be helpful if you’re concerned about someone else taking your desired name before you can file your documents.
- Annual report fee: Once your LLC is formed, you’ll need to file an annual report with the Arizona Corporation Commission. The fee for this report is currently $0 for LLCs with less than $50,000 in gross revenue and $45 for LLCs with $50,000 or more in gross revenue.
- Registered agent fee: In Arizona, you’re required to have a registered agent for your LLC. A registered agent is a person or business that agrees to receive legal notices on behalf of your LLC. You can choose to act as your own registered agent, but many LLCs choose to hire a professional registered agent service, which can cost anywhere from $50 to $300 per year.
- Attorney or accountant fees: While it’s not required to hire an attorney or accountant to form your LLC, it’s often a good idea to consult with a professional to ensure that your LLC is set up correctly and to help you navigate any legal or financial issues that may arise. The cost of hiring an attorney or accountant can vary depending on their rates and the complexity of your situation.
The cost of opening an LLC in Arizona can range from a few hundred dollars to a few thousand dollars, depending on your specific needs and the fees associated with your chosen services.
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Files needed to open an LLC in Arizona
There are several key documents and pieces of information that you’ll need in order to open an LLC in Arizona. Here’s a rundown of the files needed to open an LLC in Arizona:
Let’s break it down:
- Articles of Organization: This is the primary document required to form an LLC in Arizona. It includes basic information about your business, including its name, address, and registered agent. You can file this document online or by mail with the Arizona Corporation Commission, with a filing fee of $50.
- Name reservation (optional): If you want to reserve your LLC’s name before filing your Articles of Organization, you’ll need to file a Name Reservation Request with the Arizona Corporation Commission. There is a $10 fee for this service.
- Operating Agreement: Although not required by Arizona law, an Operating Agreement is a highly recommended document that outlines the ownership and management structure of your LLC, as well as the rights and responsibilities of each member.
- EIN (Employer Identification Number) from the IRS: This is a unique nine-digit number that the IRS assigns to businesses for tax purposes. You’ll need an EIN to open a business bank account and to file your LLC’s taxes.
- Business licenses and permits: Depending on the nature of your business, you may need to obtain additional business licenses and permits from the state of Arizona or your local government. This can include things like a general business license, a sales tax license, or a professional license.
- Registered Agent Information: In Arizona, you’re required to have a registered agent for your LLC. A registered agent is a person or business that agrees to receive legal notices on behalf of your LLC. You’ll need to provide the name and address of your registered agent when filing your Articles of Organization.
These are the key files and information that you’ll need to open an LLC in Arizona. Keep in mind that the specific requirements may vary depending on your individual situation, so it’s always a good idea to consult with a legal or financial professional for personalized guidance.
Bizee (formerly Incfile) is our preferred choice for LLC formation because they provide all of the services your new business needs while being transparent with pricing. They also offer a free registered agent service for the first year, even in their free package.
Check out a behind-the-scenes of what managing your LLC looks like in your dashboard in this Bizee review.
Things to consider when opening an LLC in Arizona
There are several things to consider when opening an LLC in Arizona. Here are some of the key factors to keep in mind:
- Name availability: Before forming an LLC in Arizona, you’ll need to ensure your desired business name is available. You can search for existing business names using the Arizona Corporation Commission’s online database.
- Registered agent: As I mentioned earlier, Arizona requires all LLCs to have a registered agent. You’ll need to choose a registered agent who is located in Arizona and has a physical address (not a PO box).
- Ownership structure: When forming an LLC, you’ll need to decide how ownership will be structured. This includes determining the number of members (owners) and their respective ownership percentages.
- Operating Agreement: Although an operating agreement is not required by Arizona law, it’s highly recommended. This document outlines the ownership and management structure of your LLC, as well as the rights and responsibilities of each member.
- Taxes: LLCs in Arizona are considered “pass-through” entities, which means that the profits and losses of the business are reported on the personal tax returns of the members. You’ll need to register for an EIN with the IRS and obtain any necessary state and local tax permits.
- Licenses and permits: Depending on the nature of your business, you may need to obtain additional licenses and permits from the state of Arizona or your local government. This can include things like a general business license, a sales tax license, or a professional license.
- Ongoing requirements: After your LLC is formed, you’ll need to file an annual report with the Arizona Corporation Commission and pay any associated fees. You’ll also need to keep accurate records of your business transactions and maintain separate bank accounts for your business and personal finances.
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Remember to carefully consider factors like taxes, licenses and permits, and the right business structure to ensure your LLC is set up for success. With the right preparation and guidance, forming an LLC in Alabama can be a straightforward and rewarding process.
Forming an LLC in Arizona can be a great way to start a business and protect yourself from personal liability. While the process may seem overwhelming, by following the necessary steps and seeking professional guidance when needed, you can set yourself up for success. From name availability to taxes and ongoing requirements, I hope this article has provided you with a comprehensive overview of what it takes to open an LLC in Arizona. As always, stay hungry and stay foolish.
For more information on starting an LLC in Arizona, be sure to visit other resources on our website. Our articles on the various steps involved in forming an LLC, as well as information on the benefits of an LLC, can provide you with the information you need to make informed decisions about your business.
Additionally, our guides on registering for taxes, obtaining an EIN, and creating an operating agreement can help you navigate the legal requirements of starting an LLC in Arizona. Whether you’re just starting out or looking to expand an existing business, forming an LLC in Arizona can be a great choice. For more information and support as you begin this process, be sure to visit our website and take advantage of our comprehensive resources.
Legal Disclaimer: This article contains general legal information, does not constitute professional legal advice for your situation, and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
Where Do I Even Begin with Starting a Business?
This depends on where you’re at in your journey.
Step 1 is deciding what type of business you want to start.
Step 2 is filling out the BizBuddy Pathway for your business.
Step 3 is legally forming your business.
Check out the FAQs below that match up with where you’re at in your process.
What Type of Business Should I Start?
If you’re unsure of what kind of business you want to start, you need to assess your situation. Things like your skills, available time, passion(s), money, and risk tolerance all factor into your decision. This post on What Business to Start is a great place to assess your situation and find the right fit for your unique situation.
What is the BizBuddy Pathway?
Research says that 92% of people with a business idea will never start a business. There are no shortages of ideas… execution is the scarce resource. The BizBuddy Pathway is a simplified approach for you to lay out your business journey.
Think of it like writing a book. The Pathway is like coming up with the title, storyline, and chapters, so you have the outline of where to begin. This is how you become the 8%.
How Do I Legally Form a Business?
It’s not as difficult as you think. That’s because in the U.S. small businesses accounted for 62% of all new jobs created between 1995 and 2020. That’s why you hear people say small business is the backbone of the economy. Check out this Guide on How to Legally Form a Business (in the U.S.). It will give you a full understanding of what goes into forming your legal entity and the options available to you. If you’re unfamiliar with terms like “Piercing the Corporate Veil” you’ll want to check out that guide.
How Do I Grow My Business?
Congrats. You’re already in the game and looking to grow. BizBuddy was founded by Eric Worral who started his first business at 13 years old (sealing driveways). That was well over 20 years ago when he had to figure out how to get new customers. No matter what business you’re in you need paying customers. This is a Guide on How to Get More Customers for Your Business. It’s a comprehensive overview of how to think about your category of business and the marketing strategies to implement. Onward and Upward!