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How to Start an LLC in Arizona: Forming an Arizona LLC
If you’re looking to open up a new business, it’s a great idea to open up a limited liability company (LLC) in Arizona. An Arizona LLC offers business owners many benefits that can ultimately help them grow their business much more easily. When you form an LLC, you are granted liability protection for your personal bank accounts, properties, and possessions in the case of debts or lawsuits against your Arizona LLC.
In order to form an LLC in Arizona, you will need to follow a few important steps before you can get your business up and running. You will need to choose a business name, appoint a registered agent, process all required LLC documents, and you will need to understand how taxes work for your business structure.
If you’d like some professional assistance with your LLC formation process, contact the professionals at LLC Formations so we can help you get your Arizona LLC started.
This guide will help you register a limited liability company in the state of Arizona, and answer relevant questions on how to form an LLC in Arizona. You will learn how to:
- Select a name and conduct a name search for your Arizona LLC
- Select the registered agent
- Prepare and file the Articles of Organization
- Submit the Articles of Organization
- Pay the filing fee
- Publish a Notice of Publication in ACC Approved Newspaper
- Create an Operating Agreement
- Apply for an Employer Identification Number (EIN)
Selecting A Name for Your Arizona LLC
To select a business name for your Arizona LLC, it’s important to make sure that the LLC name is unique to the state of Arizona, and that it doesn’t interfere with the trademarks of other organizations according to the Arizona Corporate Commission. You can check this by conducting a name search before filling out the name reservation application.
Checking the availability of your LLC name is easier than you may think. Just go to Arizona Corporation Commission Name Database at https://ecorp.azcc.gov/EntitySearch/Index to make sure that the LLC name is available for registration. The Arizona Corporate Commission will reject your application if it finds a duplicate name or if the name interferes with the trademark.
While it’s easier to think about a unique name, professional business practices require consumers to consider various factors before naming the LLC. For instance, you want to make sure that your name doesn’t infringe on trademark and copyrights of other companies and products. Secondly, it is also practical to think a name that is easy to remember. In today’s dynamic world where thousands of companies open each day, a simple name will positively affect brand identity.
It is also logical to name the LLC according to the product and services offered by your organization. Likewise, savvy entrepreneurs make sure that a relevant domain name is also available for them to purchase. The ideal name for your LLC may be available in Arizona, but it’s important that the domain name is available too so you can create a website for your LLC.
Regarding trademark infringement, you can check the name of your LLC and variations of the name in the searchable database of US Patent and Trademark office. If the name is common, there are chances that it may infringe upon the trademarks of other products or services. While it doesn’t mean that you will not be able to register the name, it may affect your expansion as you try to expand your Arizona LLC to other states.
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Select the Registered Agent
Every business in Arizona must have a registered agent, also known as a statutory agent or resident agent. The primary purpose of this role is to ensure that each registered business can get legal documents at a physical address in Arizona. It also means that the statutory agent in Arizona must have a physical address. A P.O. Box will not suffice. Your chosen agent also receives the summons, complaints, and other public notices from Arizona state authorities.
The registered agent can be a person or a legal entity over 18 years of age who resides in the state of Arizona. Similarly, a domestic LLC based in Arizona can also be a statutory agent. Similarly, any LLC that has a physical presence in Arizona can be a statutory agent. It should be noted that you cannot name your own LLC to become a registered or statutory agent for your business.
Should I Hire A Registered Agent Service?
If you are not a resident of Arizona and you don’t know a resident who you can trust to be your statutory agent, you should consider hiring a service. There are professional companies that are regulated by the state authorities to operate as a registered agent service for an LLC. As part of their business offerings, the service offers businesses a chance to get their legal document delivered to them in a timely manner without any delay.
For a couple of dollars, you can hire a professional service to become your statutory agent in Arizona. Mostly, you can also get access to an online portal providing the scan of important documents for you so you can read the documents without having to retrieve it from the office.
Besides, professional companies also offer a variety of related services that includes phone services, physical address, meeting space, virtual office, phone numbers and a lot of important business-related services. It is common for these companies to bundle their services in a package reducing the overall cost of services. Usually, the overall price package is a great value for businesses that don’t have a physical space in Arizona. Thousands of online businesses, out-of-state companies and foreign business designate statuary agents to streamline their business operations at a low monthly cost.
Prepare and File the Articles of Organization
In Arizona, the Articles of Organization consists of eight sections. Each section contains vital information about the company, which needs to be filed correctly in order to form an LLC in Arizona.
Section 1: Entity Type
In step 1 of this section, you need to indicate if you want to register a limited liability company or a professional limited liability company. A professional limited liability company is usually registered by a tradesperson who needs a special permit or license from the government to operate their business. These can include doctors, real estate advisors, health professionals, and construction companies, for example.
On most occasions, you will establish a regular Arizona LLC instead of creating a professional limited liability company. However, your trade organization may require you to establish a professional LLC, which has particular tax and legal advantages. If you are not sure, it is better to call your trade organization or the authority that provides the licensing to see if they require you to register as a professional LLC.
If you’re looking for help from a professional agent, you can contact the team at LLC Formations to help you verify the information.
Section 2 : Entity Name
In this section, you just need to write the name of your LLC in Arizona. As a formality, you must include Limited Liability Company or Limited Company while naming your company. You can also use any abbreviation of the name including L.L.C., L.C., LLC or LC. Besides, you should not use the words that include such words as association, corporation, incorporated or any abbreviation of these words. If you want to use these words or words associated with Banks, Trust, Loan Association, and Savings Association, you must ask the Department of Financial Institution before naming your Arizona LLC.
Section 3 : Offering A Professional LLC Service
If you have selected to register a professional limited liability company for your Arizona LLC, then you must indicate the type of service that your business structure will offer. You may write law firm, medical, and accounting as the type of professional service you are offering. Remember, professional businesses will often need business licenses or permits in order to open a business like these mentioned. If you are registering a standard LLC, then you should skip this section entirely.
Section 4 : Representation for Services of Process
In this section, you will need to write the name and address of the statuary agent or service. We have already discussed the role of a statuary agent. If the statuary agent has a different street address and mailing address, then you also need to write the mailing address of the statuary agent.
It is important to name a responsible person as your statuary agent because the state law requires them to receive mail from the state authorities and pass it to the legal entity. Since the responsibility of communication lay on the statuary agent, it may be important to select a professional agent service instead of naming a single individual to represent you. In the case of miscommunication or the person not present to receive the document, the statuary agent or agent service will be held responsible for their duties.
To ensure that the statuary agent realizes its responsibility, the state requires the statuary agent to sign and accept a separate form known as “statuary agent acceptance form”. You will need to send the form along with the Articles of Organization to the Arizona state authorities. Follow the link to download relevant forms.
Website Link: Arizona Corporate Commission Website
Section 5 : Arizona Known Place of Business Address
This is a self-explanatory section where you are required to indicate the physical address of your Arizona business. If you don’t have a physical presence or you have designated a statuary agent as your registered address, then you can skip this section when forming an LLC.
Section 6 : Duration
This section asks you to indicate the duration of your Arizona LLC. Most business owners open their business for an indefinite period, which means that they want to run their business for as long as possible without any closing date. If the life period of the LLC is “forever,” you can skip this section and move to the next sections.
Section 7 & Section 8 : Arizona LLC
Depending on who runs your Arizona LLC, you will either need to fill section 7 or section 8. You will fill section 7 if one or more managers are given responsibilities to run your LLC. If you or other members of the LLC will run business affairs, you are required to complete section 8. Following are instructions on how you may properly fill each section:
If the company is run by one or more managers, you will need to attach manager structure attachment form along with the Articles of Organization. The manager structure attachment form is available on the Arizona Corporate Commission Website indicated above. Your application will be rejected if you fail to attach this form when applying for your Arizona LLC.
The form asks the Arizona LLC to list the name of each manager and member of the business. You will need to list the name and address of the manager or all the managers in your company. Likewise, you will also need to list all the members of your company that have a 20% or more profit-sharing or capital investment in the business.
Usually, the form has space for only six profiles but you can attach another manager structure attachment to complete additional profiles, if required.
Section 8 : Member Structure Attachment
Just like the previous entry, you are required to complete this form along with the Articles of Organization. Each Arizona LLC is required to complete the profile of each of its members irrespective of the share of profit or capital investment. In simple words, you must list all the members of your Arizona LLC in this form.
Please note that you need to complete either Section 7 or Section 8 when forming an LLC and filing your Articles of Organization. Accordingly, you should not send both Section 7 and Section 8 because you will likely get a clarification request from Arizona authorities, which will delay the entire process of your LLC formation.
Submitting Your Articles of Organization for Your Arizona LLC
Once you have prepared the Articles of Organization, it’s time to file the Articles of Organization with the Arizona authorities. In most cases, you are required to send three official Arizona LLC forms:
Articles of Organization: This is the form that we discussed in the preceding paragraphs. You are required to complete each relevant section and sign before you file the Articles of Organization with the Arizona authorities. Anyone sending the article can sign the form, but it is recommended that a responsible member of the LLC or a manager of the LLC signs the Articles of Organization on behalf of the Arizona LLC.
If you have selected a professional agent to complete the paperwork, they will take care of all the legalities for you. If you’re looking for professional assistance with this part of the process, contact LLC Formations so we can help you get your LLC in Arizona up and running.
Statuary Agent Acceptance Form
As described earlier, your statuary agent, also known as a registered agent, must sign this form. You cannot be your own when forming an LLC, and you should not try to sign the form yourself. Always make sure that you send the form to the statuary agent ensuring that the agent understands the responsibility. Due to the responsibilities of a statuary agent, most LLCs are represented by a professional firm that acts as the statuary agent for their LLC in Arizona.
Manager Structure Form or Member Structure Form
You must send one of these forms. Don’t send both forms. Altogether, there are three forms that you must send to complete your registration process. However, if the structure of your LLC is more complex or there is additional information that you must send to state authorities, you can send additional forms, as required. To discuss additional requirements, it is best to talk to a professional company or a lawyer.
Most professional agents include a cover sheet with the documents making it easier for the agents to process the documents. You can also include a cover sheet to be more organized and prepared. Once the cover sheet is organized, it’s time to pay the fee. The easiest method to submit the form is using the online method. We will discuss the method in the next section. If you want to hand the papers to state authorities, follow these guidelines:
The Arizona Corporate Commission offices are located in Phoenix and Tucson. The Arizona Corporate Commission offices are normally open from 8 in the morning to 5 in the afternoon, except holidays. You will need to take the three forms, the cover letter, and the cash or check to the offices located at:
- Phoenix office: 1300 W Washington St, 1st Floor, Phoenix, AZ 85007.
- Tucson office: 400 W. Congress St., Tucson, AZ 85701
You should make three copies of your forms and the Articles of Organization before you file for your LLC formation. Keep one copy for your records until you get back the original document. Submit the original forms to state authorities and ask them to stamp an additional copy to show the date when the paperwork was delivered to them.
Pay the Filing Fee for Your LLC in Arizona
An important part of the LLC formation process is paying each filing fee that comes along with it. If you’re using the online channel, you may pay the $50 filing fee using any major credit card. On the other hand, if you are submitting the documents by hand or if you are sending it through registered mail, you can pay the filing fee by check. Anyone visiting the offices can also pay for the filing fee in cash.
If you want expedited service with the filing, there is a separate charge of $35 to speed up the registration process so you can form an LLC more quickly. By paying $85, you will likely get your Certificate of Registration within five to seven business days from when the filing fee is processed.
For normal processing times, it usually takes 15 to 17 days to complete the entire procedure after filing. Experts recommend that you should spend an extra $35 to expedite this part of your LLC formation process.
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Publish a Notice of Publication
The next step of opening your Arizona LLC is to publish a notice published in a local newspaper. The notice of publication in the local news bulletin is a general notice to the public. The publication indicates the name of the LLC, its members, address, and other basic particulars about Arizona LLC.
According to the state laws, the notice must be published for three consecutive days in a local newspaper of a county where your business is established. You should plan to spend anywhere from $65 to $90 for such publications. These publications must be submitted within the first 60 days of your business registration in the state of Arizona. If you fail to realize the responsibility, the state has the right to revoke your business registration.
If you have hired a professional agent to serve your business interest, they will take care of all the formalities for you. This saves you the cost and time associated with such publications for your Arizona LLC. If you want to do it yourself, you can use the following format to publish the notice or publication:
- Mention the name of your LLC and the date of its registration.
- State the address of your LLC or the address of the statuary agent.
- Include the street address of your LLC. If you don’t have a physical address in Arizona, then indicate the address of your statuary agent. If you have a physical presence in the state, the LLC’s address may be different than the address of your statuary agent.
- Include the name and address of managers, if the LLC is managed by a manager or multiple managers.
- Include the name and address of each member.
Often, it is difficult to provide a streamlined notice of publication that will fit every LLC. Therefore, it is better to consult a professional agent or the local newspaper to ask them about the details.
After registering the LLC, you will require important documents to run your business. Following is an overview of such documents:
- Operating Agreement
- Employer Identification Number (EIN)
Organize the Operating Agreement for Your Arizona LLC
An LLC Operating Agreement is fundamental to running a profitable business. According to the new Arizona state laws, all limited liability companies are encouraged to submit an LLC Operating Agreement to ensure smooth operations and success for the LLC. A standard LLC Operating Agreement usually indicates the duties, roles, and responsibilities of each member of the LLC. It tells others about the structure of the business, capital investments of each member, and profit-sharing for the Arizona LLC.
It is important to submit the Operating Agreement to state authorities as early as possible because it may save you from liabilities in the future regarding your LLC. In fact, banks and other financial institutions will also like to see an Operating Agreement before initiating business talks with your LLC. Similarly, your trade partners and other business associations may also require an Operating Agreement that represents your Arizona LLC.
While there are a lot of standard Operating Agreement samples that you can download from the Internet, it is still better to consult a professional when you open a business in Arizona. It is recommended because LLC companies may need an Arizona Corporate Commission compliant Operating Agreement in order to form an Arizona LLC.
Why is it Necessary to Create An Operating Agreement?
Even for single member LLCs, it is important for LLCs to draft a workable agreement because the state law takes precedence in case there is no agreement in place. While this may seem a trivial issue to most readers, it is extremely important because you do not want the state laws to govern your business operations.
If you are a multi-member company or your company is operated by a manager, you should immediately draft an agreement because state laws may not be conducive to how you want to share profits and returns if your business stops operating. Most disputes occur because non-professional LLC doesn’t have an Operating Agreement that can define the role and responsibility of each member of the business structure.
For instance, Arizona law requires that the distribution of money should be made in accordance with the capital contribution of each member before the profit is shared with other members, even investors. In such cases, if you earn a profit of 20% from the proceeds, you may not get anything if other members, who have contributed more capital than you, don’t get their returns when the company defaults.
The law may seem unfortunate for members who have always done their jobs according to their duties. If you don’t have a written agreement, you may not get anything from the profits or proceeds from the sale of inventory and properties. By adopting an operating procedure according to your desires and taste, you will be able to get your fair share of business proceeds. If you are not sure how to draft such an agreement, talk to your professional agent or a lawyer who are adept in crafting operational agreements LLCs.
When to Amend an Operating Agreement according to the State Law?
Arizona law requires every LLC to send a new Operating Agreement to state authorities if certain things change. Failure to send the new and updated version within thirty days of the change may result in revocation of the initial agreement. It also means that the state of Arizona will be forced to use its default laws to solve issues pertaining to your Articles of Organization filing.
Here are four instances where every business owner must send a revised and an updated copy of the Articles of Organization:
1. If you feel that a statement in the article is incorrect, you should send a revised copy to the state authorities. If there is a change of address or a change of statuary agent, the original articles will remain intact, which means that there is no need to send a revised version once the address of the statuary agent is changed.
2. Whenever a new member comes in a member-managed Arizona LLC you will need to send a revised copy of the agreement with details of the member profile, duties, and profit-sharing for any multi member LLCs. Similarly, if any of the members leave the Arizona LLC, you will be required to send a revised version.
3. If there is a change in a manager in the manager-managed company, the LLC is required to send a revised version. It means that you will rewrite the name of the new manager and delete the name of the previous manager. You should also disclose any changes in the roles and duties of the manager if required.
4. A manager-managed LLC is also obligated to revise its agreement if any of the members holding a 20% or greater capital interest in the Arizona LLC leaves or another person become a member based on a similar criterion. If an existing member of the company acquires a greater capital interest in the company, which exceeds 20%, the LLC should send a revised copy of the operating agreement. As such, if the existing member of the company reduces its capital contribution, which is lower than 20% stake, you should also send a revised agreement.
While creating and amending the Operating Agreement may be easier, creating an agreement that abides by all the laws of the state is trickier. Accordingly, all multi-member companies ask their lawyers or the professional agent to help them with such matters. As a responsible business owner, you should also get an expert opinion before crafting an agreement.
Obtain an Employer Identification Number for Your Arizona LLC
After registration, you will need to apply for an employer identification number (EIN). You can easily get an EIN free of charge by submitting a request online or by mail. As a response to your request, you can get an EIN instantaneously to use it for various business and tax purposes. You simply just need to register with the IRS for your EIN so you can be organized.
Sometimes, single-member LLC owners do not get an EIN, which causes problems when they want to pay state taxes, federal tax, or negotiate a deal with trade partners. Irrespective of the status of your Arizona LLC, getting an EIN is important because you will need it for everything, from opening a commercial bank account to taking out a loan to getting a federal tax refund for your LLC.
Don’t delay the process as you can easily get an employer identification number within hours. If you are not sure how to apply for EIN, call a professional agent or the local small business organization to guide you through the process.
If you need help with obtaining an EIN for tax purposes or so you can apply for business licenses, contact the professionals at LLC Formations so we can help you get started.
How Can LLC Formations Help You?
Overall, it’s easier to register your Arizona LLC than you may think. If you follow this guide, you can get your company registered within a week. Although the process of opening your LLC may take some hard work, business entities all over the country are able to get through the process with a little help from professionals.
Hopefully, this article has answered all of our most basic questions about how to set up an LLC in Arizona. After reading our guide, you can confidently start the process of forming your own Arizona LLC. Still, if you have questions in mind, please contact our professional team for further assistance. Check out our next guide on LLCs in Arkansas.