Are you thinking about starting an LLC in Arizona? In this article, we’ll discuss the top advantages of an LLC and how it will benefit your business in the short and long term.
After that, I will walk you through the entire registration process if you decide it is the right business structure for you.
However as a quick note, if you are nervous about the filing process and would rather professionals handle it to make sure everything is filed properly, look into a service like IncFile (for $49) or LegalZoom (for $149). Both services use online questionnaires that take you less than 15 minutes to fill out and they take care of the rest.
If you’d like to handle the incorporation process yourself, keep reading for our step-by-step guide. Otherwise look into one of the incorporation services mentioned above. Do what you feel most comfortable with.
LLC stands for Limited Liability Company and true to its meaning, an Arizona LLC will free you from personal legal and financial obligations if something were to happen.
When you form an LLC, you’re creating a separate entity apart from yourself as the business owner. A separate entity is entitled to its own rights and conducts its own transactions, therefore, when it encounters problems along the way, you are protected from liabilities. In other words, your personal assets will be safely protected.
At some point, an LLC will have fewer tax obligations than incorporating under sole proprietorship. Aside from this, you’ll also have numerous tax deductions and benefits which may include medical expenses, pension plan, operational costs and others.
The IRS seems to have better tax deduction offerings for LLC’s than any other business structure (except Non-Profits).
Aside from the business tax benefits that you’ll be able to take advantage of, you’ll also be able to take care of your employees through numerous tax deductions. Your employees will be able gain health insurance deductions, travel deductions, automobile deductions and among others.
Lawsuits and other legal issues are always possible when doing business and you have to consider this ahead of time. Which is why you need to incorporate your business. If you form an Arizona LLC, your personal assets will be protected.
Creditors and financial institutions will not be able to get their hands on your personal assets because you and your business are separate entities.
Forming an Arizona LLC can be challenging, but with this easy-to-follow 5-step process, we hope that the process will become less difficult on your part.
You simply can’t operate your Arizona small business without a business name, thus, the process starts with this step. Make sure that the business name you decided on is unique and represents the essence of your LLC. It should also have the initials, L.L.C. or LLC after it.
To avoid duplication, you can use the Alaska Department of Commerce, Community, and Economic Development to check for business name verifications.
A Registered Agent has a great role to play in your Arizona LLC. There are state requirements when choosing an agent so you have to look into that before deciding to choose one.
The most basic requirement that you need to look for in a Registered Agent is if he/she is a resident of Arizona, and the street address of his/her office. You agent has to be available during business hours as well, so you’ll never miss a single document.
That said, you can hire a Registered Agent service and pay up to $160/year, or get an Arizona Registered Agent free of charge when you incorporate your LLC with IncFile – which is $100 less than other online incorporation services.
The Articles of Incorporation is the most important document to form an Arizona LLC. You can file this document before the State of Arizona Corporations.
Before you fill-out the Articles of Organization form, read instructions thoroughly to avoid errors. If you’re not very confident answering it alone, or you have questions, have a professional assist you.
Once you’ve completed all the information in the document, have it notarized. You can do online filing, or you can also send the document through mail. Arizona’s LLC state filing fee is $250.
An Employer Identification Number is required by Arizona so that they’ll be able to monitor your tax reports. You need to comply with this requirement if you want to continue your business’s operations.
You can check out the IRS’ website to obtain the EIN, it’s also free – no need to pay anything.
An Operating Agreement is not mandated by Arizona law, but having one will be very good for your business. The purpose of this document is to fully protect your business from added legal liabilities in the future.
Draft this document using Rocket Lawyer’s Operating Agreement, it’s completely free so there’s no need to worry about fees.
Even after you’ve incorporated your Arizona startup, there are still a few things that you need to do. Below is a to-do list that we’ve prepared especially for you.
A business plan is the blueprint of every business, you need this one so you are well-aware of all the ins and outs of running the kind of business you’re starting. You’ll be able to identify possible risks and effective solutions so you’ll also be prepared for anything.
I understand that writing a business is difficult, but it doesn’t have to be. Below are two great resources that can assist you in writing a professional business plan.
Complying with this requirement is a must if you want to do business in Arizona long term. If you fail to pay your state taxes or get the appropriate licenses, you will be fined. Worst case scenario, your Arizona LLC will be closed.
You’ve probably heard of an annual report, but aside from this document, there are also other reports that you need to file before the state of Arizona. The Initial Report is filed after 6 months and this is done at the State of Arizona Division of Corporations. (Don’t worry it’s free)
Another report that you need to file every 2 years is the Biennial Report. There are two methods to file this report: mail and online. Download the Biennial form here.
Please keep in mind that this guide is not meant for legal purposes and is not legal advice. If you want specific answers for forming an LLC in Arizona, consult with a professional.