Arizona’s sunny climate, strong economy, and affordable living costs have contributed to its continuous growth. The state is home to about 550,000 small businesses, employing around 1 million people. With Arizona experiencing a significant economic upturn, the benefits of starting an LLC here are numerous. If you’re considering this journey, now is the perfect time to start and reap the rewards.
Thankfully, setting up an LLC is simpler than you might imagine. In this easy-to-follow guide, we’ll take you through the steps of forming an LLC in Arizona so you can start your business journey.
Step 1: Name your Arizona LLC
Step 2: Pick an Arizona LLC Resident Agent
Step 3: File an Articles of Organization
Step 4: Get a Certificate from The State
Step 5: Create an Operating LLC Agreement
Step 6: Complete Publication Requirements
Step 7: Obtain an Employer Identification Number
Step 1: Name your Arizona LLC
When starting a business in Arizona, you must pick a name for your LLC.
Here are the main rules to follow when choosing a name in Arizona:
- Your business name has to be Limited Liability Company, LLC, or L.L.C.
- Ensure your name is different from that of another business in the state. You can check the Secretary of State’s website.
- Avoid using words reserved for government agencies (like the State Department, CIA, FBI, Treasury, etc.).
Some words (like bank, lawyer, attorney, credit union, etc.) might need extra paperwork and licenses.
- You can find a complete list of Arizona’s naming regulations for more details.
Additional considerations:
Reserve your name: If you still need to prepare to register your LLC but are worried that someone else might take your name, you can reserve it for a small fee. In Arizona, you can reserve names for up to 120 days by submitting the appropriate form to the state authority.
URL availability: Checking URL availability is essential. Even if you’re not planning to create a webpage now, you might want one later. Securing your domain name early on is wise to keep the option open. Before deciding on your LLC name, make sure the URL is accessible.
Step 2: Pick an Arizona LLC Resident Agent
You must pick a person or company to be your resident agent in Arizona. This agent or company gets essential documents for your LLC, like lawsuits. A statutory agent plays a crucial role in any business operation. Their primary responsibilities include:
- Ensuring a designated address is in place to receive legal documents and official correspondence securely.
- They received lawsuits, summonses, complaints, subpoenas, and official notices on behalf of the business.
- They forward all received notices to the business while also assisting in organizing them effectively.
- They inform the business about ongoing compliance obligations and ensure timely filing or reporting requirements with relevant regulatory bodies to maintain good standing.
A statutory agent is a middleman between the business entity and regulatory and government agencies. They handle official communications, file the necessary paperwork for the business, and ensure adherence to relevant laws and regulations. Moreover, they prioritize privacy and safeguard any received data to prevent unauthorized disclosure.
Step 3: File an Articles of Organization
involves submitting Articles of Organization to the ACC. These articles serve as legal documents and are essential in forming and outlining crucial details about the company’s structure and operations. Upon approval by the ACC, they officially establish the LLC as a distinct legal entity.
Key components typically included in the Articles of Organization are:
- Legal Name of the LLC: This must adhere to Arizona’s naming regulations.
- Physical Address: While it doesn’t have to be in Arizona, it can match the statutory agent’s address.
- Statutory Agent: An individual or entity designated to accept correspondence on behalf of the LLC.
- Management Structure: Clarify whether the LLC will be managed by its members (owner-managed) or appointed managers (manager-managed).
- Details of Members/Owners: Provide the names and addresses of the initial members or owners of the LLC.
Where you should submit the Articles of Organization.
You must submit the Articles of Organization online via the ACC website; alternatively, you can mail or fax them if online submission isn’t possible.
When mailing or faxing the document, ensure you include the following:
- Cover Sheet
- Articles of Organization
- Member Structure Attachment or Manager Structure Attachment
- Statutory Agent Acceptance
- Payment
When submitting by mail, remember to pay with a check payable to “Arizona Corporation Commission.” Do not send cash through the mail. Instead, mail the completed documents and the check to the address provided.
Arizona Corporation Commission, Examination Section
1300 W. Washington St.
Phoenix, Arizona 85007
A Money-On-Deposit (MOD) account must pay the filing fee for faxed submissions. For regular or expedited service, fax the paperwork to (602) 542-4100. For same-day service, fax documents to (602) 542-0900.
Step 4: Get a Certificate from The State
Once the state approves your LLC’s formation papers, they’ll give you a certificate saying your LLC is official. This certificate lets you get an Employer Identification Number (EIN), business licenses, and open a business bank account.
Step 5: Create an Operating LLC Agreement
In Arizona, while not mandated by law, it is essential to have an operating agreement for your LLC. This agreement helps limit your liability to just the company’s assets and clarifies the roles and relationships between members and the company.
An operating agreement lays out the rights, duties, and financial interests of everyone involved with the LLC. It’s like a contract between you and the other members, outlining how the business will run overall and daily.
This legal document is wise even when starting a business with close friends or family. It sets out the rules and business operation, preventing disagreements later on. It also defines the management structure, voting processes, ownership transfers, financial tracking, and daily tasks. You can even include your LLC’s mission statement to guide its direction.
Step 6: Complete Publication Requirements
All LLCs in Arizona must submit a Notice of Formation for three weeks in a designated newspaper within the county of the primary office. This notice will include the LLC’s name, the name and address of the statutory agent, the business address, whether the LLC is manager-managed or member-managed, and the name and address of each manager or member.
LLCs formed in Maricopa or Pima counties are exempt from this publication requirement.
Step 7: Obtain an Employer Identification Number
To register your LLC with the federal government formally, you’ll need an Employer Identification Number issued by the Internal Revenue Service (IRS).
Think of an EIN as your business’s equivalent of a Social Security number. It’s crucial for many purposes, such as hiring employees, setting up a business bank account, and fulfilling tax obligations. Most LLCs, especially those with multiple members or employees, are required to obtain an EIN.
The EIN facilitates the following:
- Filing and managing taxes at both state and federal levels.
- Opening a business bank account.
- Hiring employees.
Follow this guide to start an LLC in Arizona and run your business quickly. These steps can help make setting up your LLC in Arizona easier and faster.
LLC State Guides
FAQs
What is The Cost of Forming an LLC in Arizona?
The Arizona Corporations Commission requires a $50 fee for filing the Articles of Organization. There is also an extra $35 charge for expedited processing.
If you reserve your LLC name before filing the Articles of Organization, a name reservation application costs $10 by mail or $45 online.
Is it Possible for Foreign LLCs to Operate in Arizona?
Foreign LLCs, meaning those formed outside of Arizona, can conduct business in the state. However, they must register with the Arizona Corporation Commission by filing an Application for a Certificate of Authority to allow them to operate legally within Arizona’s jurisdiction.
How can I Change the Ownership of an LLC in Arizona?
To switch ownership of an LLC in Arizona, you must:
- Check the operating agreement.
- Get approval from the owners or managers.
- Create a transfer agreement between those involved.
- Update the necessary documents with the ACC.
How Much Time Does it Take to Form an LLC in Arizona?
The approval process for online filing of Arizona LLCs typically takes around three weeks. Processing begins once your statutory agent accepts their role via email. Afterward, the Secretary of State’s office requires approximately 14-16 business days to process the paperwork.
