How to Start An LLC In Arizona
- Why Start an LLC in Arizona?
- How Much Does it Cost to Establish an LLC in Arizona?
- How to Start an LLC in Arizona: The Steps
- Step 1 – Create a Name for your LLC
- Step 2 – Find an Arizona Statutory Agent
- Step 3 – Submitting Articles of Organization
- Articles of Organization
- Other Required Documents
- Step 4 – Publication Requirement
- Step 5 – Get an EIN
- The Forms You Need To Register An LLC In Arizona
- Taxes for LLC Arizona
- Final Word: How to Start An LLC In Arizona
Arizona is an excellent location to start a business. If you want to know how to start an LLC in Arizona, then you need to read this article that allows you to form an LLC, get protection for your personal assets and protect your business name from others using it in the state.
The LLCs were first enacted in Arizona in 1992. The legislation for the business model was developed by combining partnership attributes. Since 2018, the Arizona LLC Act required all LLCs to be managed by a person who has a duty of loyalty to the LLC.
Why Start an LLC in Arizona?
There are numerous reasons why you might want to start an LLC in Arizona. Arizona is ranked as one of the best states with a strong business environment and low costs. Therefore, with the process for the LLC clear-cut, this is one of the best states where you can start an LLC.
And the costs for registering a business in Arizona are reasonable. When you register a business in Arizona you get several benefits, these include the following:
• Protecting your personal assets should an entity sue you and win in court.
• Your personal assets are also protected from debts.
• Your business name is protected, ensuring no one else in the state can use the name.
• There are tax benefits.
And you can see how the tax and business registration costs compare between Arizona and other states below.
|State||LLC Filing Fee||LLC Annual/Biennial Fee||Corporate Tax Rate||Nominal GDP per capita|
|Arizona||$50||$0 (no fee and no information report)||4.90%||$56,511|
|New Mexico||$50||$0 (no fee and no information report)||4.8-5.9%||$51,481|
|Utah||$70||$20 (every year)||4.95%||$66,011|
|California||$70||$800 (every year) + $20 (every 2 years)||8.84%||$85,546|
|US average||$130.38||$89.34 (every year)||5.60%||$64,773.08|
How Much Does it Cost to Establish an LLC in Arizona?
When you create an LLC in the state, there are some standard procedures you must follow. The Arizona Corporation Commission will oversee the entire application and approval procedure for your business registration. The steps required will include filing for name reservation, selecting an agent, filing documents, and then the publication of the LLC formation.
This sounds like a lot, and like it will be very expensive, but the actual costs for this can be relatively good.
The cost for reserving a name is $10 via mail and $45 for online applications. There are no costs for filing for the Statutory Agent Acceptance. However, you make the process faster for an additional $35. There is also the option for you to use the next-day service, which costs about $100, or the same-day which costs $200.
Filing the Articles of Organization is about $50 for a standard application. For expedient processing, you will need to pay an additional $45. The cost for publication will depend on which county you live in, the cheapest options are $30 but some of them are $300.
If you’re a foreign LLC and want to register in Arizona, you will need to pay $150. And then filing a trade name application to get a DBA will cost just $10. Acquiring a Transaction Privilege Tax license costs $12 per business location.
How to Start an LLC in Arizona: The Steps
Here are the steps that you need to start an LLC in Arizona. These are so simple to get going and you can get going within one to three weeks.
Step 1 – Create a Name for your LLC
You need to first ensure that you have a good name for your business. This name should not have been picked by another business. You can check the brand name availability with the state, the Arizona Corporation Commission does have a brand name search facility that you can use.
In addition to the name not being taken by another brand, you need to ensure that the name you choose follows these rules:
- Must include LLC phrases or abbreviations.
- Cannot include the following words: association, corporation, incorporated, bank, credit union, trust company, and/or deposit.
- Cannot include the government agency name.
Many owners choose a business name but aren’t ready to file for LLC registration. However, you can reserve a name for 120 days before you file the documentation. All you need to do is to fill out an application to reserve an LLC name.
Remember, that as part of this stage, you need to check that the domain and social media profiles are available. At the same time as reserving your LLC name, buy your domain.
LLC name reservation can be done by mail or you can apply online. Online applications are given priority.
Step 2 – Find an Arizona Statutory Agent
A Statutory agent is known as a registered agent in other states. The agent is an individual or entity that has been authorized and agreed to accept and deal with legal aspects on behalf of your business. The agent is required to be living permanently residing in Arizona, and have a physical address in the state. They should also be available during normal business hours.
When you choose your agent, their name and address are going to be on public record. Therefore, if you want to keep your name private, then choosing a professional agent is advised.
There are several options available, including ZenBusiness and Incfile.
Step 3 – Submitting Articles of Organization
Now you can start to submit your paperwork for starting your LLC in Arizona. Filing the Articles of Organization is relatively simple in the state. You can do this online or via mail, remembering that online is more expensive but is given priority.
Articles of Organization
The Articles of Organization include the following information.
- The effective date of the LLC.
- The duration of the LLC.
- Business Character – what your business does.
- Members structure.
It can take around three weeks for the Arizona Corporation Commission to complete the process and issue the relevant certificates for your LLC.
Other Required Documents
There are also some other documents that you are likely going to need, these include the following documents.
NAICS Code – the code that is used by the Federal statistical agencies to classify businesses, and collect and analyze data for monitoring the economy’s health. This is a six-digit code.
Business Licenses/Permits – Every state and some counties have their own rules on what permits or licenses you need. Therefore, be sure that you have the right options available and then submit them correctly.
Step 4 – Publication Requirement
Every new LLC business in the state will have to publish a Notice of LLC Formation in a newspaper in their county. That is unless your LLC has been formed in Maricopa County or Pima Country. The notification has to be published three times and within 60 days of you receiving the notice from the Arizona Corporations Commission.
The publication must receive the following details to meet the requirements:
- Name of the LLC
- Details of the Statutory Agent
- The LLC address
- How the LLC is managed
- Details of the LLC managers/members.
Step 5 – Get an EIN
Now you need to apply for and get your Employer Identification Number, otherwise known as the EIN. This nine-digit number is assigned to every business by the Internal Revenue Office. To get this number, visit the IRS website and complete the form.
The EIN has numerous benefits, including helping you to open a bank account, hire employees, register for licenses and permits, and more. Most of what is required for the LLC will require the EIN.
The Forms You Need To Register An LLC In Arizona
The forms that you will need to complete to register an LLC include:
- Application to reserve limited liability company name
- Statutory Agent Acceptance Form
- LLC Articles of Organization
- Trade name application form
- Transaction Privilege Tax license
Taxes for LLC Arizona
Those who are single-member LLCs are required to pay federal income tax and self-employment tax. Both of these are leveraged as pass-through taxation. However, you’re also able to choose to tax your business as a corporation, and you would then pay taxes on gross income and income tax on dividends.
A corporate tax rate of 6.968% of the net income is included in the LLCs tax return. If you decide to be taxed as a corporation, the minimum tax to be paid is $50.
The state taxes are between 2.59% and 4.5% depending on the income of the business. Those who are paying self-employment tax need to pay 15.3% of their income.
Final Word: How to Start An LLC In Arizona
There are very few states in the United States where you can get such a good deal as registering your LLC in the state. The state has one of the best economic environments for business development with costs and strong economic growth. Above are the steps that you need to know how to start an LLC in Arizona. With these facts in place, you will be sure that you have protection for your assets as well as protection of your business name. Good luck with your venture.