How to Start an Arizona LLC?

Updated: August 01, 2023, 12:30pm

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Thinking of forming an LLC in Arizona? Well, you’re at the right place! The state is not just famous for The Grand Canyon, Tuscon, and The Arizona-Sonora Desert Museum. It also boasts a breeding ground for a business-friendly environment and small business growth! It ranks at the 17th spot for entrepreneurs, which is a pretty good number if you ask us.

Just like any other state, creating an LLC in Arizona is fairly easy and convenient if you follow our step-by-step guide below.

Pick a name for your Arizona LLC.

You should start your LLC formation process by selecting an awesome name for your LLC. Choose one that’s unique and different from your competitors and complies with Arizona’s naming requirements.

Some general facts to remember before naming your Limited Liability Company are:

Choose a name relevant to your company that reflects the products and services you offer. A clear and original name is always a plus one.
Also, ensure that the name is easy to remember and spell. Avoid complex spellings or using obscure words that may confuse potential customers.
Include terms like “LLC” at the end of your business name. It should end with one of the following abbreviations to comply with Arizona naming regulations:

Limited Liability Company
Limited Company
L.L.C.
L.C.
LC
LLC(Most people stick with this one)

Avoid using words like “corporation,” “bank,” and “university” that may be restrictive or require additional approvals.
Avoid using terms like “association,” “corporation,” “incorporated,” or any abbreviations of either term (“assoc.” “corp.” or “inc.”)
It goes without saying, but your name shouldn’t include or be indicative of any obscene, vulgar, or forbidden words.
Make sure that your chosen LLC name doesn’t infringe on existing trademarks and isn’t the same as any other registered company’s domain name. If you’re unsure, you can check the United States Patent and Trademark Office (USPTO) database and then decide accordingly.

You can also use the online search tool The Arizona Corporation Commission (ACC) provided to ascertain if your chosen name is already taken.

And if you already have a specific name in mind but need more time before officially starting, you can actually reserve that name for up to five years through the Arizona Secretary of State.

Prepare a Business Plan

Drafting a business plan that lays out the basics and essentials of your LLC’s operations is always a long-term investment when starting your LLC. It acts as a blueprint for growing and expanding your business. And the best part? It doesn’t even have to be an expensive process! You can easily create a plan that suits your budget.

A low-cost business plan can generally include,

Business Description
Complete Market research
What Makes Your Business Special
Your products and services
Marketing and promotion strategies
Who Your Customers Are
How You Plan On Reaching Your Customers
Financial Goals and Management
Lastly, Logistics.

With an Arizona LLC, you get another benefit in that the state provides its tools and resources(like this checklist from the Arizona Commerce Authority) to help formulate the perfect business plan. They can also refer you to Small Business Development Center Network, which is basically an organization that helps new business owners get the guidance they need to set up their businesses perfectly.

Assign a statutory agent

The next step in forming your Arizona LLC is appointing a registered agent. All Arizona businesses, including LLCs, Corporations, and other business entities, need to assign a registered agent to receive and accept all necessary official, financial, and legal documents for your LLC.

Also, remember that such agents are known as “statutory agents” in Arizona. Some other names of a registered agent are:

Agent for Service of Process
Resident Agent
Process Agent (commonly used for international companies operating in the US)
Corporate Agent
Agent of Record
Service of Process Agent
Office of Agent

An Arizona LLC statutory agent should

be at least 18 years or older.
Be a resident of the state with a physical street address in Arizona,
or have a business office in Arizona( it can’t be a PO box or a virtual office address)
be available during normal business hours to receive legal documents and official mail on behalf of their LLC.
File a signed Statutory Agent Acceptance form with the Arizona Corporation Commission (ACC)

There are fours ways you can get the perfect statutory agent for your LLC,

The very first option is to be your own agent if you live in Arizona,
Or, you can nominate a member of your LLC, a friend, or someone from your family,
use an LLC registered agent service,
Hire an attorney to make sure your official documents reach the right hands as soon as possible.

Many business owners prefer to go with a commercial agent service, as the address of your statutory agent will be available publicly. A commercial agent(registered agent service) is often a good choice as they’re affordable(around $15 per month in Arizona) and make sure your mail reaches you safely, electronically, or physically.

File the Articles of Organization document with the Secretary of State.

As in most US states, it’s a requirement to file articles of organization form with the Arizona Secretary of State. Your LLC will only be considered a legal business entity when registered with the state agency through the articles form. Since the document will provide all the important details about your business to the state for verification, here are some key elements you need to include:

LLC Name
The main business purpose and objective of your LLC
Specifications like whether your company is a standard or professional LLC
Principal Place of Business
The name, address, and contact details of your Statutory Agent
Management Structure
Effective date and total duration of your LLC
The name, information, and signature of the LLC organizer.

The filing fee is around $50. You can submit it online, or you can submit the form in-person or by mail to the following address:

Arizona Corporation Commission

Examination Section

1300 W. Washington St.

Phoenix, Arizona 85007

Some additional documents you may require while submitting your LLC application by mail are:

If you’re filing as a Foreign LLC, the process is almost the same, except you’ll need to submit a Foreign Registration Statement.

Now, before we move on to the next topic, let’s clarify one thing very quickly: Arizona allows two types of LLC structures: basic/standard LLCs and professional LLCs.

A Basic LLC is an LLC where one or more members/owners form a company and engage in non-professional business activities.
As the name suggests, a professional LLC includes members/owners who are professionals performing services that require state licensing. Simply put, if your LLC engages in professional services, you must form a PLLC. These services include(but aren’t limited to):

Medical Practitioners
Lawyers
Accountants
Architects
Engineers
Therapists and Counselors
Veterinarians
Financial Advisors
Real Estate Professionals

PLLCs must designate or use a relevant abbreviation like “PLLC” or “Professional Limited Liability Company” in their business names. They also need to describe their services on the Articles of Incorporation form.

Lastly, Arizona is known for being slow in processing LLCs. So, you can expect up to 50-55 days to get confirmation of your LLC’s formation. You can pay an additional fee to speed things up, and your LLC will be confirmed in just ten days.

Draft an Operating Agreement

An Operating Agreement is a pretty essential formation document that outlines and highlights how your LLC will conduct business. And while in some states, it’s mandatory to draft an operating agreement. There’s no such requirement in Arizona. However, we strongly recommend having one in place to limit your liability to the company assets and to define the relationships between the members and the company.

A well-drafted agreement defines the roles, rights, and responsibilities of all the LLC members/owners, individuals, and entities involved.

A readily accessible, written operating agreement is helpful for many different reasons, like resolving fights, misunderstandings, and confusion that may arise over financial agreements and other potential litigation. If there is no agreement in place, the courts will base their judgments on state law, which may not necessarily align with what’s best for the LLC and its members/owners.

An agreement can include, but isn’t limited to:

The name and address of your LLC
LLC’s duration outlining for how long it will exist
The name, address, and contact details of your registered agent
Details included in your Articles of Organization
The main goal of your LLC
Daily operations and activities
Allocation of profits and losses between the members/owners.
Voting procedures
Rules for adding new members or dealing with members who leave
Management structure
Details about the members/owners and their contributions
Liability and Indemnification clauses

Get an Employer Identification Number(EIN)

An EIN, or federal tax identification number, is assigned by the Internal Revenue System to identify your LLC for taxes. It’s a nine-digit number(formatted as XX-XXXXXXX), which provides official identification for taxation and is pretty similar to the Social Security Number(SSN) for US citizens. This identification number recognizes your company for legal and financial purposes and tracks your LLC’s tax obligations. You can apply for it through the IRS website, mail, or fax.

With an EIN, you can do the following,

You can file and manage taxes at the state and federal levels.
Open a business bank account.
Hire employees
Apply for multiple business licenses and permits
Conduct daily business operations
Separate personal and professional finances.

For those without an idea, an EIN is only required for businesses with more than one member and those with employees.

Fulfill the publication requirements.

In Arizona, all LLCs must publish a Notice of Formation for three consecutive weeks in any local but recognized and approved newspaper. Remember to do it in the county where the LLC’s main office is.

The publication notice will include the following:

The LLC’s name
The name, address, and contact details of the statutory agent
Principal business address
The management structure: whether the LLC is manager-managed or member-managed
The name, address, and contact information of each manager/member of the LLC.

However, LLCs formed in Maricopa or Pima counties are exempt from this publication requirement.

Maintain accurate and detailed records of all your essential documentation.

In lawsuits, tax audits, bankruptcy, or similar situations where your business assets are at risk, you need to prove to the IRS or the courts that your LLC is a legitimate business.

If you fail to prove that your LLC is genuine and not merely a means for hiding funds or exploiting tax loopholes, you might miss out on the various benefits that an LLC offers. To avoid this, maintain accurate and organized financial, legal, and business records.

To give you an idea, your main office or place of business should have the following paperwork:

LLC Articles of Organization (Certificate of Formation)
Operating Agreement
A list of all LLC members/owners, their contact details, addresses, contributions, and shares
Confirmation letter for your Employer Identification Number (EIN)
LLC meeting minutes (if specified in the operating agreement)
Financial statements and tax records
Business licenses and permits

It’s essential to establish a well-organized system to store financial records, tax documents, contracts, and other critical paperwork. You can keep physical copies at your office and ensure they are backed up online using cloud storage for added security.

Moreover, regularly updating your books will help you track your income, expenses, assets, and liabilities effectively. This practice will simplify your tax preparations, financial analysis, and decision-making processes.

Final Word

Once your business is registered with the Arizona Corporation Commission, you officially have an LLC. But that simply doesn’t translate to the fact that you’re ready to do business. There are a few things you still need to manage before sitting back pretty.

Open a professional business bank account.
Hire employees(if you intend to)
Obtain necessary business licenses and permits.
File Arizona LLC Taxes as required.
Market your LLC

Need more clarity? Don’t worry. We’ve got you sorted! You can read our blog on maintaining an LLC once it’s up and running so you don’t lose complete control over your business activities and operations.

How To Form An LLC In 50 States

Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

Frequently Asked Questions

What are the basic requirements for starting an LLC in Arizona?

Some basic requirements to form an Arizona LLC are:

You need to choose a unique business name that complies with state regulations
Appoint a registered agent with an Arizona address,
File Articles of Organization with the Arizona Corporation Commission (ACC),
Pay the required filing fee.

Is an Operating Agreement important for my LLC?

Although it isn’t a legal requirement, we highly recommended to draft an operating agreement for your LLC. The agreement outlines the ownership structure, management responsibilities, profit distribution, and other important aspects of your business.

What taxes do I need to pay as an Arizona LLC?

LLCs in Arizona are subject to state and federal taxes. In Arizona, businesses may be liable for state income tax, transaction privilege tax (sales tax), and employment taxes, among others.

Can I convert my existing business into an LLC in Arizona?

Yes, you can convert a sole proprietorship or partnership into an LLC in Arizona by filing the necessary paperwork with the Arizona Corporation Commission (ACC).