Starting a new business can feel complex, but it doesn’t need to be. From a logistical standpoint, one of the most important steps you can take is to get your business registered in your state. For Arizona-based businesses, this process is relatively simple – so long as you go in with the knowledge you need.
This article will show you how to form an LLC in Arizona. The process is similar for other business structures (corporations, etc.), but this guide will focus specifically on limited liability companies (LLCs).
LLCs are a very popular type of business entity and for good reason. Their primary benefit is that they help shield owner(s) from liability. This protects the owner’s personal assets from lawsuits related to the business, and provides other important benefits.
Regulations for starting an Arizona Limited Liability Company (LLC) are relatively straightforward. The step-by-step guide below will show you how to start an LLC in the state of Arizona efficiently and accurately.
1. Consider using an LLC Service
You can likely complete the necessary steps to start your LLC on your own. But for many business owners, using a professional LLC formation service is worth considering.
These companies help walk you through the process and handle some of the more complex paperwork that you’ll need to complete. They are essentially middlemen between you and the state of Arizona. For time-strapped entrepreneurs, and those who just want some assistance, the small fees that these companies charge will be well worth it.
These companies can also serve as your Registered Agent (often referred to as Statutory Agent in Arizona). Arizona requires that you elect a Statutory Agent for your business (although you may be able to be your own agent). Regardless, many people prefer the convenience and peace of mind of using an LLC service, compared to trying to do everything on their own.
Some good options for forming an LLC in Arizona include ZenBusiness and Northwest Registered Agent. ZenBusiness is a budget-friendly option, while Northwest offers some of the best personalized service in the industry.
Check out our roundup of the Best LLC Services
2. Select a name for your LLC
Before you start the paperwork to form a new LLC, you’ll need to select a name. This name must be unique from other business names in the state of Arizona.
In addition to being unique, an Arizona LLC name must contain the phrase “Limited Liability Company”, or the abbreviations “LLC” or “L.L.C.”
There are also some words that are prohibited, or subject to additional restrictions. For instance, government-related phrases like “Treasury” or “State Department” cannot be used. Legally protected terms, like “Doctor”, “Attorney” and “Bank” require special permissions and the relevant legal title.
This is an important step in the business formation process. That said, there is no need to stress about finding the “perfect” name. This is because your formal LLC title doesn’t necessarily have to be the name you actually do business as.
Using a Doing Business As (DBA) or trade name
Most states, including Arizona, allow businesses to utilize “doing business as”, or “DBA” names. These are also sometimes called “trade names”. DBAs allow an LLC to operate under a different name than its formal name on the state paperwork. For example, your LLC name could be “Adam’s Fresh Foods, LLC”, and you could hold DBA names for “Garden Fresh Salsa” and “Adam’s Hearty Soups”.
In most cases, DBA names are acquired during the business licensing process – which is not necessarily the same process as forming an LLC. Getting your LLC formed will be handled by the Arizona Secretary of State’s office, whereas business licenses (and DBA names) are typically handled on a county or city level.
3. Nominate a statutory agent in Arizona
Arizona requires that every LLC elect a statutory agent to represent its business. In most other states, this is referred to as a registered agent. Although the names differ, the concept and responsibilities of this position are the same.
A statutory agent is responsible for receiving notice of lawsuits, important tax documents, and other official correspondence, on behalf of the company. Their address must be publically listed on the business’ forms, and they must have a physical address in the state (PO boxes are not allowed).
In Arizona, a statutory agent must be either an individual residing in the state of Arizona, or a corporation licensed to do business in the state.
You can be your own registered agent (as long as you live in Arizona). You can also appoint an employee. But many businesses prefer to contract with a professional registered agent company. This helps ensure compliance, and also protects the owner’s privacy, as the address of the statutory agent becomes public record once the LLC is formed.
Both ZenBusiness and Northwest Registered Agent offer registered agent services in Arizona. Costs are quite affordable – generally $50 to $150 per year. Hiring a firm ensures that everything will be handled correctly, and can also save the business owner time and hassle. The agent must complete a statutory agent acceptance form, and must supply their physical address and some other key information to the state of Arizona.
Check out our roundup of the Best Registered Agent Services
4. File Articles of Organization
The Arizona Corporation Commission is the state agency tasked with forming new LLCs and corporations. To start your LLC, you’ll need to submit several forms:
- LLC’s Articles of Organization
- Statutory Agent Acceptance
- Member/Manager Structure Attachment
- Cover Sheet
These four documents are the primary tasks that you’ll need to complete in order to form your new LLC. You simply submit the forms and wait for the agency to review the application.
There are several ways to complete these forms. You can file online, or in-person at select offices. Or you can download and print the documents, and submit them by mail to:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Regardless of how you file, the cost to process the application will be $50. Processing can take up to 30 business days, although applications can be expedited for an additional fee. Payments can be made via credit card or check.
5. Prepare an Arizona LLC Operating Agreement
An operating agreement is an internal document that establishes how your business will be owned, managed, and run. It lays out details of ownership structure, as well as the basic operating principles of your organization. Most new LLCs should draft an operating agreement – however, this is not actually a requirement. Operating agreements are internal documents, meaning that you don’t need to submit them to the state of Arizona, and instead, simply keep them on file.
You can draft an operating agreement using an online template, or you can contact a lawyer for help. Alternatively, using an LLC formation service will make the process easier, as they typically include both templates and other resources to help you navigate the process.
6. Wait for your Arizona LLC documents
Once you have submitted your application for the LLC, you’ll need to wait for Arizona to process the application and send you the legal documents. Assuming there are no issues with your paperwork, the process should be completed within 14-20 business days. Arizona maintains a list of current processing times, so you can check how long your application should take.
Expedited processing is also available, for an additional cost. Expedited processing generally takes 7-10 business days.
7. Meet Arizona’s LLC publishing requirements
A unique requirement in Arizona is to meet certain publishing requirements when you launch a new company. Essentially, you’ll need to publish a Notice of Formation with the government, and then publish this notice in a newspaper in the county or counties where you plan to do business. The notice must be published for three consecutive issues, and they must be published in an approved publication that’s on this list.
Note: This requirement is waived for businesses with Statutory Agents in Maricopa County or Pima County. All other counties must satisfy the requirements. The statutory agent you choose must be located in the county that is your place of business, so you can’t use an out-of-town agent to skirt these requirements.
When your LLC is formed, the state will send you a form called the Notice of Publication. You will need to fill out this form (including file number, LLC name, street address, and membership information), and then send it in to an approved newspaper in your county, along with your payment (costs vary depending on the newspaper).
Your publication must be published for three consecutive newspaper issues, and you must start the process within 60 days of your LLC being formed. You may submit an Affidavit of Publication to the Arizona Corporations Commission (ACC), although this is not required.
Steps to take once your LLC is formed
Once you’ve gone through the initial process of getting your company registered with the State, there are other requirements and optional activities that you should complete as soon as possible.
1. Obtain an Employer Identification Number (EIN)
An employer identification number (EIN) is a federal tax ID number that is used for correspondence with the IRS. It is used for tax purposes and for hiring employees. It’s required in order to hire employees, and even single-member LLCs and entrepreneurs can benefit from having one. It protects the owner’s social security number, as the EIN is used instead (this is even true for sole proprietorships).
It is quick and easy to file for an EIN online at the Internal Revenue Service’s website. The application is free and only takes a few minutes.
2. Open a business bank account
You should do all that you can to completely separate your personal and business finances. The best way to do this is to open a small business bank account. To do this, you will generally need an EIN (see above), a business license, and other documentation proving that your business is registered properly with state, local, and federal authorities.
Most banks now offer business checking accounts. You can use your existing bank, or shop around for the best deal.
3. Keep your company in good standing
On an ongoing basis, there are many things that you must do in order to keep your business in good standing with government agencies. Filing federal income tax returns, state income tax returns, sales tax returns, etc. is key, as is filing annual reports. You may also be subject to quarterly taxes and other requirements.
There are local requirements to satisfy, as well. You’ll need to obtain business licenses for counties/cities that you plan to business in; these typically need to be renewed annually. Some specialized businesses may require additional permits or licenses.
It can seem overwhelming at first, but if you start off on the right foot, and fully research your requirements, you will be setting your company up for future success.