Arizona has a robust small business climate with favorable tax laws and a rapidly growing population, which makes it a great place to start an LLC. While the process to start an Arizona LLC may seem complicated, it is a fairly straightforward process that we will review with step-by-step instructions below.
What are the benefits of an LLC?
- LLCs provide liability protection for business owners, meaning that the owners’ assets will not be at risk.
- Easy to set up and manage
- One person may form an LLC
- Tax advantages
When do you need to form an LLC?
If you are exploring starting a business or perhaps you are already in business as a sole proprietor it is a good idea to form an LLC. If you are operating a business without an LLC you could be placing yourself and your personal assets at risk.
While it is not required to form an LLC before starting a business the benefits include accounting and tax standardization, limited liability risk right away, and it will be easier to stay organized since all of your business-related expenses will be tied to one business bank account.
Step 1: Choose your company name
The first step in starting an LLC is to select a business name. It is essential to choose a business name that is unique from existing entities.
Perform an Arizona business name search
The Arizona Corporation Commission maintains a database of business entities registered in the state that is free for the public to search.
Visit the ecorp.AZCC.gov site to begin a search.
You can search businesses in Arizona by business name, statutory agent name, principal name, or entity identification number.
Your Arizona LLC must contain the words Limited Liability Company or include the abbreviation L.L.C. or LLC. Prefixes, suffixes, and plural versions of an existing entity name do not make it unique.
If you want to start a burger restaurant called “Burger and Brews LLC” you will want to make sure there is not a similar-sounding name like “Burger Brew House LLC” or else your name may get rejected by the Secretary of State. The intention behind the naming rules is for businesses to create names that are uniquely identifiable from other existing active names so consumers will not get confused.
One great way to come up with unique business names is to use a business name generator.
Perform a trademark search
Perform a trademark search before selecting your Arizona business name. To protect yourself, avoid using a trademarked or similar name to an existing business.
Find out if your proposed business name is available by conducting a trademark search online at the US Patent & Trademark Office.
If you want to use the same name as another state or country, check with that jurisdiction to make sure the name is available.
Determine if you want to use a DBA name
A DBA is a registered “Doing Business As” name and can be used instead of the legal LLC business entity name.
A DBA allows you to have a name for your business that reflects what it does or who its customers are. Business owners use their company’s DBA names on checks, orders, contracts, and correspondence when doing business.
Some of the main benefits of a DBA:
- Flexibility: If you have your LLC established, you can use DBA names instead of creating separate entities for each new venture.
- Branding: A DBA name is easier to brand and identify for customers.
- Expansion: It is easy to file DBAs in different geographical locations to target other customers and appear hyper-focused in your marketing.
You do not need to operate under a DBA if you use your Arizona business name for all business purposes. However, using a DBA name will not affect your Arizona LLC name registration.
Register the domain name
Once you decide on a business name, check to make sure that the domain name is available. Sites like Namechk can show you which domain extensions are available for your business name.
Although .com domain names are ideal, as the internet ages extensions like .net, .co, and .biz are becoming more commonplace
Register social media profiles
It is vital to have a solid social media presence in today’s business environment. Be sure to register for your business name on the different social media platforms ahead of time so that no one can sign up for them.
Reserve Arizona business name
If you have an Arizona business name picked out but aren’t quite ready to register the business, one option is to file a Name Reservation form with the Secretary of State.
The cost to file a name reservation is $45 and will reserve the business name for 120 days.
Step 2: Register Arizona LLC
After choosing a name, start the registration process online with the Arizona Corporation Commission.
Select a statutory agent
A statutory agent is an individual point of contact for the state-designated to receive official correspondence from the state. In other states, the statutory agents are referred to as registered agents.
A statutory agent is required for an Arizona LLC. If you are not personally going to be your Arizona LLC statutory agent, find a substitute for an Arizona resident or company to serve in this role.
Be sure that the statutory agent’s address is included in all your business documents and correspondence if you intend to use a different registered office.
What are Arizona statutory agent requirements?
An Arizona statutory agent:
- must be over the age of 18
- have a physical street address in the state of Arizona
- be available during normal business hours
How to register
Once you have selected a registered agent you can proceed with filling out the Arizona Articles of Organization form. The Articles of Incorporation is required for each LLC that intends to do business in the State of Arizona.
The following information is required on the Articles of Incorporation form:
- Entity Name
- Entity Address
- Statutory Agent Name and Address
- Member Structure
Once the form is filled you can submit the documentation to the Arizona Corporation Commission through the Ecorp portal.
The corporation commission will then review your documents and notify you if anything needs to be edited. Be sure to get the green light from the Corporation Commission before proceeding with designing branding properties.
Our picks of the best registered agent services
Step 3: Next steps after filing Arizona LLC
Apply for an EIN
The IRS requires each LLC to have its own unique employer identification number. The Internal Revenue Service website can generate a federal tax identification number. An EIN makes it easy to file your business taxes and stay in compliance with the IRS and is similar to a Social Security number for your business.
EIN’s also add credibility to your business and are required for compliance purposes from time to time by companies that have to pay you for goods and services. An EIN is also required to open a business bank account and will help you establish business credit in the event you need to take out a business loan.
Start a business bank account
A business bank account is required for LLCs to start conducting business. A business bank account is required for businesses and helps keep their business and personal finances separate.
After the LLC has been established, your business bank account will be used for payroll, payment of bills, a deposit of earnings from your business, and any other financial transactions your business may have.
Back office tasks such as bookkeeping can also be performed on your start-up bank account to keep start-up costs low.
Apply for a business license and permits
If you are planning on selling goods or services in the state of Arizona you will need to check with the local county or city you are in to check for their licensing requirements. The Arizona Commerce Authority is a good resource to get further information on licensing requirements.
Prepare an LLC operating agreement
An operating agreement is a contract between the LLC owners that lays out the financial and functional decisions of how an Arizona LLC will be managed by its owners. An operating agreement is needed if there are multiple business owners of an Arizona LLC.
An operating agreement can be as simple or in-depth as desired, but it is important to have one in writing before starting any significant operations within the business.
File annual report
Arizona is one of the few states that does not require annual report filings.
How much does it cost to file an Arizona LLC?
The state filing fee for a Domestic LLC in Arizona is $50 and $85 for expedited processing. A foreign LLC is $150 for standard processing and $185 for expedited processing. The Cost to file a Name Reservation is $10 for normal processing and $45 to be expedited.
Recommended LLC formation services
- Northwest Registered Agent: Started as a registered agent service but expanded into business formations and offered additional professional services like mail forwarding and virtual business address services.
- ZenBusiness: Another recommended online business formation platform that can help set up an LLC in Arizona. They offer a full suite of services for new business owners, including operating agreements, business websites, domain names, and more.
- Incfile: A top online incorporation service provider in the market that offers various business filing services like LLC formation, Registered Agent, State Filings, and Compliance Filings.
What are the benefits of starting a business in Arizona?
While many small businesses fail, if you have a well-thought-out business idea it is worth giving it a shot. Here are some of the main benefits of starting a business:
Business owners have the ability to work when they want and at what times they want. In the early years of building a business, it may require more hours to get things up and running, but once you have profits coming in it will be easier to outsource responsibilities so you can focus on landing new customers.
One of the biggest rewards of being your own boss is the unlimited income potential you can achieve. Most jobs have fixed salaries or ranges of compensation employees can earn. As a small business owner, there is an exciting feeling about reaping the rewards of your hard work with no cap on your income.
Another great thing about starting your own business is what you will learn along the journey. As an entrepreneur, you will be responsible for all facets of your business. You will pick up skills like accounting, sales, and marketing strategies that will help develop your business skillset.
Arizona LLC FAQs
How do I get help filling out my LLC paperwork?
The Arizona Corporation Commission does not assist in providing guidance on how to fill out the LLC paperwork. They are not attorneys so they are not able to provide advice. They will reach out to you if the forms you submitted have any errors in a timely manner.
How long does it take to process an Arizona LLC?
An Arizona LLC typically takes less than 30 days to process by the corporation commission. If you choose to go with the expedited processing options the average time is around 5 days.
What is an Arizona Certificate of Good Standing?
An Arizona certificate of good standing indicates that a business has filed its necessary business paperwork with the state.
Certificates of good standing are occasionally required by banks or other financial institutions when you are applying for a loan. You can get a request for a certificate of good standing from the Arizona Corporation Commission for $45.
How do you terminate an Arizona LLC?
You can terminate your Arizona LLC by filing articles of termination form with the corporation commission. The cost to file is $35.
Is Arizona LLC documentation visible on the internet?
The Arizona Corporation Commission is required to provide the information entered into the database available for the public to access. If you are concerned about your name being visible, consult with a commercial registered agent service.
How many small businesses are in Arizona?
According to the US Small Business Office of Advocacy, close to 600,000 small businesses in Arizona, which make up 43% of Arizona employees.
What is the average income for self-employed individuals in Arizona?
For incorporated businesses, the average income was $51,005, compared to $24,414 for unincorporated businesses.
Which industries employ the most people in Arizona?
Health Care and Social Assistance (167,000) lead the way, followed by food services (166,000), and Construction (121,966).
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