Arizona’s economy is growing at one of the fastest rates in the country. That means starting a business in the Grand Canyon State has many benefits. Starting off on the right foot by laying a solid foundation will help you in the long term. Read on for important details about starting a business in Arizona.
Note: This article isn’t intended as legal advice, and rules regarding this may change depending on your situation. To address your business’s unique needs, talk with a business and civil law attorney.
How to start a business in Arizona
Perhaps you have a great idea but aren’t quite sure where to begin. If you are thinking about starting a business in Arizona, here are ten important steps.
Step 1: Choose a name
It may sound obvious. However, this is a crucial step. Choose a name that will represent what your business has to offer. Because you want it to stand out, keep it simple to pronounce and easy to remember.
Research the name to make sure it’s not already in use or too similar to another existing company’s name. When in doubt, consult with an attorney to be sure.
Step 2: Choose an entity type
There are several options when choosing an entity type. Corporation, sole proprietorship, partnership, or limited liability company (“LLC”) are just a few examples.
This is an important step in starting a business. It can boost your credibility, lay out the structure of your business relationships, and importantly, it can protect your personal finances if someone files suit against your business. Work with an Arizona business lawyer to determine the best entity type for your business. They will know whether you should be starting an LLC in Arizona or another type of business.
Step 3: Protect your brand
You chose a great name; now you need to protect it against infringement. You can learn more about trademarking your name here.
Step 4: Register for taxes
Contact the IRS to set up a Federal EIN, also known as a tax ID number. You will need this to file federal taxes, hire employees, and open a bank account.
In Arizona, you will also need to register for certain taxes if you plan to hire employees. This includes an Arizona Unemployment Tax and Arizona Withholding Tax. In addition, if you are selling a product, you’ll need to register for Arizona Transaction Privilege Tax. Talk to an accountant for more information.
Step 5: Open banking and credit accounts
Open a bank account and credit card that you will use solely for your business. This is a critical step in protecting your business and a key way to keep your business and personal finances separate if someone sues your business.
Bank accounts that are created specifically for your business makes accounting and tax filing easier.
Step 6. Obtain permits or licenses
There are often permits or licenses associated with different types of businesses. For example, a restaurant typically needs a health permit. Other permits include zoning permits, signage permits, and building permits.
The Arizona Commerce Authority offers a helpful tool that will direct you to most of the forms you need. The checklist is based specifically on your business. All you have to do is check the criteria that apply to you.
Step 7: Get insured
Whether for your car, home, or health, being insured is an important part of personal finance. The same goes for your business. In fact, there are some types of insurance that will be mandatory. If you have one employee or more, Arizona requires you to carry workers’ compensation insurance.
While not required, most businesses also opt to carry general liability insurance. This could protect your business and employees from lawsuits involving:
– Bodily injury
– Property damage
– Advertising errors, such as copyright infringement
Step 8: Set up accounting
Managing your finances doesn’t have to be complicated. If you plan on having employees, you’ll need to develop a plan for compensation and benefits. This should include how much you will pay employees and how you’ll pay them.
Choose software that can help you track money coming in, as well as the money going out to your employees. Engage an accountant to oversee your finances or at least be available to review your accounts and answer questions as necessary.
Step 9: Purchase a domain name for your website
A solid web presence is critical to the success of your business. Once you’ve found a name and confirmed that it’s not already in use, purchase a domain name for your website.
If possible, use the exact name of your business to make it easy for people to find you online.
In addition to your website, create social media profiles using your business name. Some platforms will be a better fit than others, depending on the type of business you own. The most popular platforms are Facebook, Instagram, and Twitter.
Step 10: Work with an attorney to stay aware of current changes
Starting from the very beginning, an attorney experienced in business law can help you create a business that endures and grows over time.
Laws change, and they can change often. In fact, the Arizona Limited Liability Company Act (ALLCA) adopted significant changes that are set to go into effect September 1, 2019 for new LLCs, and will be applicable to all LLCs, even those created before the changes went into effect, by 2020. The changes include adding specific fiduciary duties for members and managers. At ARTEMiS Law Firm, our attorneys can help you understand changes like these.
We offer skilled representation in all areas of business formation and litigation. This includes advice on the best corporation structure for your circumstances, as well as creating and filing organization documents, like operating agreements.
Our attorneys are highly skilled and experienced in the study of Arizona business law. If you are starting a business in Arizona, contact us today to see how we can help your business grow.Contact Us