Forming an Arizona LLC [Step-by-step]
The limited liability Company (LLC) is a common business entity choice among small and medium entrepreneurs in Arizona.
LLCs, similar to corporations, provide topmost security for the business owner, such as protection against business debt, personal assets protection, and are also more flexible in terms of taxes.
Getting to enroll your business in AZ (LLC) is relatively easy, affordable, and straightforward. If you complete each step correctly, you'll have your Arizona LLC formed without issues. Without wasting any time, let's dive into the process of starting an Arizona LLC.
1. Name Your Arizona LLC
The first and foremost step to start LLC in Arizona is to choose an exclusive company name. While selecting a business name, make sure it follows Arizona naming requirements and is easily searchable for potential clients.
Arizona LLC Naming Requirements
- As per the Arizona LLC Act section 29-3112, your name should include the phrase "Limited Liability Corporation" or its abbreviations, including LLC, L.L.C or L.C.
- Your company name cannot include words that would confuse your Arizona LLC with a government agency (e.g., IRS, SES, State Department, etc.).
- Your company name must be distinguishable and separate when compared with other existing words in Arizona LLC.
- Restricted names may require additional documentation and a licensed person, such as a doctor or lawyer, to be part of your Arizona LLC.
Arizona Business Entity Search
Make sure that the desired business name for your limited liability company is not already taken. You can do this by visiting the AZ Corporation Commission website.
If you need help with your Arizona LLC business name lookup, please see our detailed step-by-step guide about Arizona business entity search.
TIP: Is the Domain Name Available?
Make sure you check the availability of the domain name similar to your business name before your start filing your LLC formation documents. Ideally, you want to get a .COM domain for your LLC, or an .ORG .NET domain at least.
You can also reserve all three domain zones if possible, to make sure that your company is fully related to a selected domain name.
LLC stands for limited liability company, which is a US business entity that can protect the personal assets of a business owner from business debt and lawsuits. Unlike corporations, LLCs are relatively easy to form and maintain and are not subject to double taxation.
2. Appoint a Statutory Agent (aka "Registered Agent")
After choosing the name of your company, the next step is to appoint a registered agent. A registered agent is also known as a statutory agent in AZ. As per section 29-3115 of the Arizona LLC Act, it's necessary to list a Statutory Agent in Your Arizona LLC documentation.
The Arizona Corporation Commission uses your Statutory Agent as your LLC's main “point of contact” for receiving notices from the state.
Who Can Be a Statutory Agent?
A Statutory Agent must be a resident of Arizona or a corporation based in AZ. They must have a registered office address in the state of Arizona. You may also appoint an individual within the company, including yourself.
However, in this case, you lose not only your time but also your privacy since the agent's name and address become a public record.
Using a Statutory Agent Service
Many AZ business owners decide to hire an outside statutory agent service who can receive documents on their LLCs' behalf.
Working with a designated agent is affordable, convenient, and it saves time while ensuring your business remains in good standing.
A statutory agent (or a registered agent) is an individual or a business entity that has been designated by the LLC to receive service of process notices, government correspondence, and compliance-related documents on behalf of the LLC. The registered agent must be residing in Arizona.
3. Filing the Arizona LLC Articles of Organization
The next step includes filing Arizona LLC Articles of Organization with the Arizona Corporation Commission. You can file the documents online, by mail, or in person. The filing fee is 50$ no matter how you provide the paperwork.
Along with the articles of organization, you must also include:
- Statutory Agent Acceptance
- Member or Manager Structure Attachment
- Cover Sheet
Filling the Articles of Organization Form
Listed below are the requirements for Articles of Organization. Carefully provide the information on the form because it will become part of the public record permanently.
While filling the form, you need to tick the right box wisely because Arizona uses the same format for professional or standard LLCs. The majority of LLCs are Standard. PLLCs assist licensed professionals.
The inclusion of the Words “Limited Liability Company” or its abbreviations into your entity name is necessary. For PLLCs businesses, the inclusion of the phrase “Professional Limited Liability Company” or summary into the name is obligatory.
The words like “Bank” or “Trust” require approval from the Arizona Department of Financial Institutions.
PLLCs must define what technical services they provide. Don't have a PLLC. Then skip this section and move forward.
In this section, you should provide the name and address of the statutory agent, who must be a resident of Arizona. Alternatively, you can compile a list of businesses that offer official agency services, and they fill in the necessary information on your behalf.
Reminder: “statutory agent” is the state's way of saying “Arizona registered agent.”
In this section of your articles, you don't just mark the appropriate box. You must also fill in the appropriate attachments: either Member Structure Attachment or Manager Structure Attachment, where you enter the names and addresses of members and managers.
Submission in paper form? The Arizona Corporation requires a special cover sheet of documents you submit.
There are many options in the cover sheet in which you have to indicate whether you want standard or quick processing, your payment method, and how you wish to receive your documents (email, mail, pickup).
Arizona LLC Organizer
The organizer is the person who signs and submits your Arizona LLC Articles of Organization. The Arizona LLC Organizer doesn't need to be a member or manager.
Submitting the LLC Formation Documents
You can apply online, by mail, or in-person.
To apply your articles of organization online you need to create an online account with the Arizona Corporation Commission and proceed with your application.
Applying in-person or by mail
To apply in-person or by mail, you need to print out and fill in the Articles of Organization, the Statutory Agent Acceptance, and Manager Structure Attachment, or Member Structure Attachment. Then the completed paperwork must be mailed or delivered to:
Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007
Visit their website for more information https://ecorp.azcc.gov/
Processing Time & Approval
Typically, it takes 5 to 10 business days to have the articles approved. You will receive by mail an Acknowledgment Letter, a receipt, a stamped and approved copy of your Articles of Organization, and a Certificate of Organization.
4. Operating Agreement for Arizona LLC
It's not mandatory to create an operating agreement for an Arizona LLC but to have the one is good for your company.
Why make an operating agreement?
A comprehensive operating agreement helps distinguish that company is a separate legal entity from its owners. It also certifies that the business owners are on the same page, reducing the risk of future conflict.
An operating agreement can include:
- How voting works
- Members' ownership shares
- Members' Rights and obligations
- Management rules for the LLC
An operating agreement is an internal legal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, the ownership structure, and operating procedures.
5. Apply for an Employer Identification Number (EIN)
The Employer Identification Number is also known as Federal Employer Identification Number or FEIN. Basically, EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to help identify the business's tax-related purposes.
An EIN is required even if you do not plan to hire any employees.
What are the benefits of having EIN for an LLC? An EIN helps to:
- Hire employees
- Open a bank account
- File and manage state and federal taxes
- Register for business licenses and permits
Alternative terms for an EIN are:
- Employer ID Number
- Federal Tax Number
- Federal Tax ID
- Federal Tax Identification Number
EIN stands for Employer Identification Number. EIN is a unique nine-digit number assigned by the IRS to help identify your businesses for tax and filing purposes. An EIN is sometimes referred to as a FEIN (Federal Employer Identification Number) or FTIN (Federal Tax Identification Number).
6. Arizona LLC Publication Requirement
What sets apart the LLC formation process in Arizona from other states is the requirement to notify the state that you have formed an LLC, this is called a Publication Requirement as per A.R.S. § 29-320.
New LLCs must publish a notice of LLC formation in one of Arizona's approved newspapers in three consecutive publications, starting within 60 days of receiving notice from the Arizona Corporation Commission.
The notice must include the following information:
- LLC name and address
- Name and address of your LLC's statutory agent
- Whether your LLC is member-managed or manager-managed
- Names and addresses of managers or members, depending on the management structure
Instead, the Arizona Corporation Commission posts notice of your LLC's formation on the Arizona Corporation Commission's Public Notice Database. This is free, so you also save money on publication costs.