Step 1) Verify & Secure Your LLC Name
First off, in order to launch a successful Arizona LLC, you need to give it a stellar name.
Your business name needs to be catchy and memorable for branding purposes and appropriate and relevant for legal purposes. All of Arizona’s business name requirements are listed here, but we’ll go over the basics now. For instance, your name must:
- Not contain the words bank, credit union, deposit, savings association, building association, thrift or trust unless you’ve gotten approval from the AZ Department of Financial Institutions.
- Contain the words “limited liability company” or “limited company”, or the abbreviation “LLC” or “LC”.
- Be distinguishable from any other entity or trade name registered in Arizona. We’d describe exactly what this entails, but you’d be better off reading what the Corporation Commission has to say about it.
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. If you’re concerned about waiting, however, you can also reserve your name for a $10.00 fee.
Remember, this isn’t optional in Arizona-- it’s mandatory.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you.
Step 2) Elect An Arizona Statutory Agent
Before you can file your Articles of Organization with the state, you need to appoint a local statutory agent, otherwise known as a registered agent.
Your statutory agent will be responsible for accepting service of process notices and other important legal documents on behalf of your Arizona LLC. A statutory agent may be an individual that’s a full-time, permanent resident of Arizona, or a company that’s authorized to represent Arizona businesses.
You may elect yourself or another member of your LLC as your statutory agent, but it’s not a job to take lightly. Before signing yourself up for the task, keep in mind:
- You may risk being served in front of your coworkers, friends or family
- You’ll be required to maintain normal business hours at your home or business address
- You may have to disclose your personal address, publicly linking it to the company (if you run it from home)
- You’ll be totally accountable for keeping track of your important mail and responding by the deadlines
Sure, acting as your own statutory agent is definitely a way to save some money, but it may not be worth it depending on your personal and professional schedules.
What To Do:
If you’re considering signing yourself up, first read our registered agent guide for more details on what the duties of a statutory agent are. (Keep in mind that “registered agent” and “statutory agent” are two different names for exactly the same role.)
Once you’ve settled on an agent, they’ll need to fill out the statutory agent acceptance form. Arizona asks you to submit this form along with your Articles of Organization, but there’s no extra filing fee for it.
As far as professional statutory agent services go, IncFile is our favorite. Why? Not only are they totally reliable, they also include a free year of statutory agent services when you form an Arizona LLC with them. It’s a good deal.
Step 3) File Articles Of Organization
Now you’re ready to officially form an LLC in Arizona! You’ll do this by filing Articles of Organization with the state. This document will ask for:
- Your entity name and known place of business address
- Your statutory agent’s name and physical address
- The life period of your LLC (if there is no end date, you can leave it blank)
- The management structure of your LLC (member-managed or manager-managed)
- Your organizer’s name and signature (whoever is submitting the filing)
Arizona accommodates filing online 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 $50.00 filing fee. If you prefer the old-school approach, you’ll print out your completed Articles of Organization and send them to the following address, along with a $50.00 check:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007
Keep in mind that if you want to expedite your filing, you can send them an extra $35.00.
What To Do:
If you choose to file independently, simply follow the instructions above and triple-check that all the information is 100% accurate before submitting anything.
Step 4) Get An EIN
An EIN, or Employer Identification Number, is the federal government’s vehicle for tracking your LLC’s financial activity. They’re required for all corporations, and most LLCs. However, if you meet all of the following conditions, you can most likely opt out of getting one:
- If you’re a single-member LLC (SMLLC)
- If you don’t plan to hire employees
- If you plan to be taxed as a sole proprietorship
That said, there are still a few other circumstances that necessitate an EIN, so check out this IRS page even if you meet all of the conditions above.
What To Do:
We think the best way to get an EIN is by using the free online application on the IRS website. We prefer this method because it’s the most efficient, but if you’d prefer to apply via phone, fax or mail, read through our guide to find out how. All these options are free, too!
Step 5) Draft An Operating Agreement
Arizona doesn’t legally require you to have a written operating agreement, but it’s pretty much essential if you’re running a multi-member LLC.
Writing an LLC operating agreement is the only way for you and your members to fully define your roles and lock down the management/ownership structure of the Arizona LLC. Having this document in place will give you all something to return to if a dispute ever arises.
Among the things your operating agreement should detail are:
- What each member is responsible for
- When/how you may admit new members
- How one may go about transferring or terminating their membership
- How profit and loss will be distributed
These are just a few points that are important to address. You may add as many additional provisions as you want, as long as none of them conflict with Arizona business statutes.
What To Do:
If you’re already working with a filing service, it’s worth taking a peek at their rates for custom operating agreements. Depending on the package you purchase, it may even be included for free. Alternatively, you can craft a beautiful, thorough operating agreement by using a professional online template.
Step 6) Open a Business Bank Account
Now that you’ve got your EIN in tow and your members’ roles all sorted, it’s time to set up a business bank account.
Even if you’re running an SMLLC, this is still a necessary step — mixing personal and professional expenses never goes well. Plus, as soon as you open your business bank account, you’ll be able to start:
- Protecting your personal assets
- Taking advantage of waived fees and other perks of business banking
- Properly managing your finances in preparation for tax time
Remember to use your EIN, not your social security number, to open your business bank account. This way it’ll be completely separate from your personal finances.
What To Do:
When it comes to finding the right bank, local and national options both have their benefits. On the one hand, Arizona-based banks like Bank of Arizona and OneAZ Credit Union may offer better customer service, and on the other hand national banks may have more financial incentives.
Once you’ve set up your bank account, sync it with a small business accounting software as soon as you get the chance. Particularly if you’re not working with an accountant yet, this is extremely important to get you headed toward full-on financial responsibility.
Step 7) Handle Licensing & Tax Obligations
The final step is to obtain any permits and licenses needed to be fully compliant with the state of Arizona. Unlike other states, Arizona doesn’t issue general business licenses, but depending on your trade you may need to obtain an array of special permits on the federal, state and local level.
- Federal: The Small Business Association website provides a list of occupations that require licenses/permits and points you to the corresponding federal agencies. Their article on small business taxes is also a decent resource, although the IRS website provides the details you'll ultimately need.
- State: Fill out the interactive licensing checklist on the Arizona Department of Commerce website to figure out if your business activity requires you to apply for special licenses with the state.
- Local: If your specific county or city has any requirements not addressed by the state, you can find out by consulting with your local Chamber of Commerce.
It’s possible you won’t even need to apply for any license at all, but it’s worth checking now to be sure you’re conducting business completely legally!
What To Do:
If you’ve got a hunch that your business is going to need a whole mess of permits and licenses, you can always recruit the help of a business license service.
These services will do 100% of the research on your behalf, and send you all the applications along with helpful information on how to fill them out. We don’t recommend this for every entrepreneur registering an LLC in Arizona, but in some circumstances, it’s worth the extra cost so you can focus on other areas of the business that need your attention.
Need Help Forming An LLC?
When you’re starting an Arizona LLC, it might be worth getting professional help.
You have several resources at your disposal, and it’s up to you to decide which you’d benefit from the most. That said, here are three of the most popular LLC formation services and our reviews of them:
– IncFile ($49 + state fee) = Best Price & Overall Value
– LegalZoom ($79 + state fee) = Best For Brand Recognition