A limited liability company (LLC) is a corporate status that offers businesses certain tax and legal protections not found when operating simply as a sole proprietorship. Here’s how to start setting up an LLC in Arizona.
Disclaimer: Please note that this article is not intended to be legal advice. You should always talk to an attorney who is skilled in business and civil law about your unique situation.
The benefits of starting an Arizona LLC
Setting up an LLC in Arizona can seem daunting, but the process is straightforward enough that you can do it yourself. The benefits of doing so can include tax benefits and legal and liability protection for you personally.
You can complete your Arizona LLC formation by mail or online. For more complicated formations, you can work with an attorney or, in some cases, a legal document preparer. Whether online, through the mail, or with the help of a business law professional, here’s how to set up an Arizona LLC.
What are Arizona LLC requirements?
To get started, you will need the following:
– Licenses and permits, if required: The state of Arizona doesn’t grant you a license to operate just because you become an LLC. If required, make sure your licenses and permits are in place and up-to-date for your specific industry.
– Filing fees: As indicated below, setting up an LLC in Arizona is not free. Make sure you have your fees ready to be paid at the time of filing.
– Owners’ and address information: The owners of the LLC, called members, will be listed on the filing paperwork, as will your business’ address. Know who will be named on the paperwork (and in what capacity) before you begin.
These are the basics. For more detailed information, refer to the steps below.
Arizona LLC annual fees and costs
The fees for establishing an Arizona LLC vary depending on the type of LLC you are starting. Expect to pay anywhere from $50 for a basic LLC filing to $185 for an expedited application to register a foreign LLC.
All filing fees are non-refundable and cannot be transferred to another potential LLC.
5 steps to set up an LLC in Arizona
Setting up an LLC in Arizona can be completed in five fairly easy steps. Again, what follows is a basic overview, but your own situation may require more advanced help or additional steps.
Step 1: Start with the name
This may seem elemental, but naming your LLC is the first and arguably most important part of setting up an LLC in Arizona. Your name must meet the following basic guidelines:
– Must contain the words “limited liability company” or the abbreviations “LLC” or “L.L.C.”
– Cannot contain prohibited words that sound like a federal or state agency (e.g., FBI, Treasury, etc.)
– Cannot already be used by another entity
Run a quick name search with the Arizona Corporation Commission to see if your chosen name is available. When you list your name in your LLC formation documents, pay close attention to the exact spelling and punctuation you use.
Tip! Don’t forget to check to see if your chosen name’s domain name is available. If you want to coordinate email addresses and website URLs with your LLC’s name, this can be an important marketing step. You certainly don’t have to set up a website to have an LLC. However, purchasing your domain name now can help reserve it for future use.
Step 2: Choose a Statutory Agent
A Statutory Agent agrees to receive legal paperwork regarding the LLC. They don’t have any liability for the operations of the company; but are responsible as the named agent to receive and properly deliver notices and other legal paperwork (including lawsuits) to the members and managers of the company.
Your Statutory Agent must live in the state of Arizona, and if a business is your identified statutory agent, it must be authorized to conduct business there.
Step 3: Write your Articles of Organization and file
The Articles of Organization lay out certain practical aspects of your LLC. At a minimum, they must include:
– The LLC’s name and principal place of business (the address where most business is conducted)
– The business of the LLC (a broad description that allows for the expansion of the LLC in the future)
– The name and address of your Statutory Agent
In addition to the above, your Articles of Organization will identify the members of the LLC and, if you decide to operate as a manager-managed LLC, the identity of the manager(s).
Member-managed LLCs may be best if there are a small number of members who are all actively engaged in the company and live in close proximity. A manager-managed LLC works well if not all memberswish to participate in day-to-day activities or live in other states or countries.
Step 4: Publish a notice of the formation of your LLC
Once your Articles of Organization are filed and approved, Arizona requires newly formed LLCs to run a notice of organization for three consecutive weeks in an approved newspaper.
You must do this in all counties where your LLC will conduct business, with the exception of Maricopa and Pima counties. Once your LLC is approved, the Arizona Corporation Commission will send you information on what to publish.
Step 5: Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) identifies your LLC as a business entity. Many banks and other businesses require an EIN for business accounts and lines of credit. An EIN is also used for all state and federal tax filings and functions. Think of it as a kind of social security number for your business.
Why it can be important to work with an attorney to set up an LLC
Setting up an LLC in Arizona is fairly easy and inexpensive. However, you may also want to set up your LLC’s operating agreement at this time. Working with an attorney through this process can be crucial to help you claim key tax benefits and avoid future legal issues.
An operating agreement lays out the operating procedures, business responsibilities of members, distribution expectations, tax status, and other matters for your business. It is also important when making agreements among members about how the business will run. Without an operating agreement, the Arizona statutes applicable to LLCs will be applied. These may not reflect what you and the other members intended when establishing your business. Further, they may not provide the protection you need.
An operating agreement can be complicated to draft depending on your management structure and number of members.
If you would like guidance on setting up an LLC in Arizona or drafting an operating agreement, the attorneys at ARTEMiS Law Firm can help. For simple projects, we even provide affordable legal document preparation services. Although a legal document preparer can not give you legal advice, these qualified professionals act as a guide through the process of setting up an LLC at a fraction of the cost of an attorney.
Need help getting started setting up your LLC in Arizona? Give ARTEMiS Law Firm a call today!Contact Us