Creating an LLC in Arizona is Easy
You can start an Arizona LLC (Limited Liability Company) yourself by filing the Arizona Articles of Organization with the Arizona Corporation Commission. The cost to set up an LLC in Arizona is $50.
Follow our free How to Form an LLC in Arizona guide below to get started today.
Step 1: Create A Name For Your Arizona LLC
First off, in order to launch a successful Arizona LLC, you need to give it the right name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.
Legally, your business name must:
- Contain the words limited liability company, limited company, or the abbreviation LLC or L.L.C.
- Not contain the words bank, credit union, deposit, savings association, building association, thrift, or trust unless you’ve gotten approval from the Arizona Department of Financial Institutions.
- Be distinguishable from any other entity or trade name registered in Arizona.
For a complete list of naming rules, you can visit the Arizona Corporation Commission website.
If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider applying for a trade name after you’ve nailed down your branding.
What To Do:
Once you’ve decided what you’d like to call your LLC in Arizona, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Articles of Organization.
Need help naming your LLC? Check out our LLC name generator to find the best name for your LLC.
Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use GoDaddy to search for your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.
Step 2: Appoint An Arizona Statutory Agent
When you file your Articles of Organization with the state of Arizona, you will be asked to appoint an Arizona Statutory Agent. This is required by Arizona state law. In other states, the statutory agent is commonly known as a registered agent.
Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your Arizona LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Arizona.
Arizona does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:
- You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
- If you run your business from home, you’ll be required to make your personal address public.
- You must keep up on important notices, dates, and deadlines.
- You could be served in front of your family or coworkers.
What To Do:
If you’re considering acting as your own registered agent, do some research, starting with our registered agent guide. If you decide you’re up for the task, go ahead and list your own name and address on your Arizona Articles of Organization.
If you’re leaning toward hiring a professional, we recommend doing so through an online LLC formation service. Many of these companies (like ZenBusiness) offer up to one year of registered agent service free when you form your LLC with them.
Step 3: File the Articles of Organization
Now it’s time to officially form your Arizona LLC by filing your Articles of Organization with the state of Arizona. You can do this on your own, with the help of a lawyer, or through a professional LLC filing service.
What To Do:
If you choose to complete this step on your own, Arizona accommodates filing online with the Arizona Corporation Commission or on paper. If you choose the online method, you won’t have to download or print anything out — you’ll take care of everything digitally, including the signatures and $50 filing fee. If you prefer the old-school approach, you’ll have to print out and complete the following forms:
- Articles of Organization
- Statutory Agent Acceptance
- Manager Structure Form or Member Structure Form
- Cover Sheet
Those forms, along with a check for $50, need to be sent to the following address:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Keep in mind that if you want to expedite your filing (standard processing time is 50 to 55 days), you can send them an extra $35.
Sure, you can handle this step on your own, but we still recommend considering the help of an LLC formation service. Why? Not only will they take the reins and make sure you file everything properly, but they’ll also provide other necessary products and services at very competitive prices.
One great option is ZenBusiness. In addition to great service, they give you a free year of registered agent service when you sign up.
Step 4: Complete Arizona LLC Publication Requirements
You are required to publish your Arizona LLC name, address, and Statutory Agent info. You need to state whether your LLC is member-managed or manager-managed, as well as the names and addresses of your manager(s) or members.
For more detailed information about Arizona's publication requirements, read this guide.
Step 5: Draft An Arizona Operating Agreement
Creating an Arizona LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.
Your operating agreement should outline the following:
- each member’s responsibilities
- how new members will be admitted
- how existing members may transfer or terminate their membership
- how profits and dividends are to be distributed
From there, you can add as many provisions as you want, provided they are not in conflict with Arizona business law. Learn more about Operating Agreements in Arizona here.
Quick Note: Download a template or create a custom Free Operating Agreement using our tool on How to Start an LLC. No credit card required, ever.
Step 6: Obtain An EIN (Employer Identification Number) For Your Arizona LLC
The Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), is essentially a Social Security number (SSN) for your company. State and federal agencies use this number to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
We think the best way to get an EIN for your LLC in Arizona is by using the free online application on the IRS website. We prefer this method because it's the most efficient, but you can apply by phone, fax, or mail. You can read through our How to Get an EIN guide to find out how.
Maintain Your Arizona LLC's Personal Asset Protection
Using dedicated business banking and credit accounts is essential for personal asset protection.
Now that you’ve made it through the formation process for your Arizona LLC, you’ll need to take steps to protect your personal assets and establish your business as an independent entity.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Arizona LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can go a long way in protecting your assets with these three steps:
1. Open a business bank account.
A business bank account separates your personal assets from your company's assets, which is necessary for personal asset protection. A designated business bank account also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the The 5 Best Banks for Startups and Entrepreneurs
2. Get a business credit card.
A business credit card helps you separate personal and business expenses. A business credit card will also build your company's credit history, which can be useful to raise capital later on.
3. Designate an authorized representative.
Make sure all documents are signed by a representative of your Arizona LLC and not by you (or other LLC members) directly. This will help separate you from liability incurred by the LLC.
Reduce the Liability of Your Arizona LLC
Business insurance helps you manage risk and focus on growing your LLC in Arizona. Carrying the right coverage protects your Arizona LLC from liability and keeps you safe in the event of a loss.
The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.
There are free services available that quickly assess your business’s insurance needs. These services suggest customized policies with various insurance carriers so that you can choose the best value. One such reliable service is CoverWallet.
You can reduce your Arizona LLC’s liability by being fully compliant with employment laws such as:
- Verifying new employees are allowed to work in the US.
- Reporting employees as "new hires" to the state.
- Withholding employee taxes.
- Printing workplace compliance posters and placing them in visible areas of your workspace.
If you plan to hire employees, you might also be required to invest in Workers' Compensation Insurance. This type of policy provides coverage for employee job-related illnesses, injuries, or loss of life.
Find out more information at the Industrial Commission of Arizona website.
As a new LLC in Arizona, you will need to stay compliant with permits, licenses, taxes, and filings with the state of Arizona. This is serious business; failure to comply can lead to fines, tax penalties, and dissolution (the end) of your Arizona LLC.
Business Licenses and Permits
To operate your Arizona LLC, you must comply with federal, state, and local government regulations. The details of business licenses and permits vary from state to state, so make sure you research carefully and plan accordingly.
Find out how to obtain necessary licenses and permits for your business or have a professional business licensing service do it for you:
Federal: Use the U.S. Small Business Administration (SBA) guide.
State: Use the Arizona Corporations Division Website.
Local: Contact your local county clerk and ask about local licenses and permits.
This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
Here’s a sales tax guide to find out more.
If you have employees in Arizona, you will need to register for Unemployment Insurance Tax through the Arizona Department of Economic Security. You will also need to sign up for Employee Withholding Tax through the Arizona Department of Revenue.
Arizona does not require LLCs to file an annual report.
Reduce Administrative Burden
There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:
It's important to get your books in order — even if you haven't officially opened for business. A well-managed accounting system will help you:
- Track your business finances, including bills, expenses, and income.
- Simplify and file your annual taxes.
You can maintain your accounting in two ways:
- Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
- Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.
Recommended: For most small businesses, we recommend using a reputable accounting service. Schedule a free tax consultation for your business now to avoid costly errors in the future.
If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.
Gusto is a reliable and good payroll service for small businesses.
Need Help Setting Up An Arizona LLC?
Have A Professional Service Form an LLC in Arizona For You
If you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.
Here are the two most popular:
– ZenBusiness ($39 + state fee) for basic & quick LLC formation.
– LegalZoom ($79 + state fee) = Best For Brand Recognition