Checklist: How to Start an Arizona LLC Using eCorp’s Online efiling (10 Easy Steps) 2018

Checklist: How to Start an Arizona LLC Using eCorp’s Online efiling (10 Easy Steps) 20182018-10-05T09:45:37+00:00

by Richard Keyt and Richard C. Keyt, Arizona LLC attorneys who have formed 6,200+ Arizona LLCs. See our 134 five star Google & Facebook reviews.

Patricia Barfield, Director, Corporations Division, of the Arizona Corporation Commission said in late 2016 that more than 60% of the people who are starting an Arizona LLC use the ACC’s online e-file Articles of Organization system. On May 20, 2018, the ACC’s new online eCorp digital filing and document retention system went live. This new e-filing system is intended to replace the old fashioned paper filing system, but creating an Arizona LLC can still be done using paper forms.

The ACC’s e-filing system for forming an Arizona llc is easy and quick. It is 100 times easier than filling out, printing, signing and submitting the four pdf documents needed to file the Articles of Organization the old-fashioned paper based way.

Here is a summary of how the new Arizona LLC online e-file system works:

  • Complete and submit your Arizona LLC information using the online e-file system.
  • Pay the $50 regular filing fee or the $85 expedited filing fee with your credit card.
  • Wait for the ACC to approve or reject your submission. See the current review times.
  • If your LLC’s known place of business is not in Maricopa County or Pima County it must publish a notice of publication in an ACC approved newspaper in the county in which the LLC has its place of business.

See the benefits people get when they buy our Bronze ($397), Silver ($597) and Gold ($997) LLC packages.

How to Form an Arizona LLC Online Using eCorp

This is a step by step guide that explains how to start an Arizona LLC online in 5 – 10 minutes using the Arizona Corporation Commission’s new e-filing system called eCorp. Each step is explained in detail and contains pictures that show the corresponding screens on the ACC’s eCorp / e-file pages.

  1. Access the Arizona Corporation Commission’s eCorp Web Page & Register
  2. Step 1 Entity Search
  3. Step 2 Entity Information
  4. Step 3 Statutory Agent
  5. Step 4 Known Place of Business
  6. Step 5 Principal Information
  7. Step 6 Organizer Information
  8. Step 7 Upload Document
  9. Step 8 Signatures
  10. Step 9 Review
  11. Step 10 Done

About the + Toggles Below

Click on a + symbol below or the text to the right of the + symbol to open a toggle to read the information in the toggle.

Warning: Arizona’s New LLC Law Will Govern New LLCs & PLLCs

If you are forming a new Arizona LLC make sure that the new LLC’s Operating Agreement has language in it that complies with current LLC law and the new Arizona LLC law that replaces current Arizona LLC law on September 1, 2019. Read “Arizona’s New LLC Law” and subscribe to our free new LLC law email newsletter. The new law will govern your new Arizona LLC.

You do not want to have to purchase a new Operating Agreement after Arizona’s new LLC law becomes effective because your Operating Agreement only complies with the repealed Arizona LLC law. An Operating Agreement drafted for the new LLC law is particularly important if your LLC will have multiple members because the new LLC law contains many provisions that need to be modified or eliminated by an Operating Agreement. All the LLCs we form include an Operating Agreement that complies with current Arizona LLC law and Arizona’s new LLC law when it becomes effective.

How to Hire Us to Form an LLC or Prepare a Custom Operating Agreement

Hire us to form an LLC for $397, $597 or $997 (see our LLC formation packages) by completing our online LLC formation questionnaire. P.S. We are $195 cheaper than Legalzoom for similar LLC formation services.

Access the ACC’s eCorp Web Page & Login or Register

Go to the Arizona Corporation Commission’s online e-corp web page. If you have previously registered with the ACC enter your email address and password. If you have not previously registered with the ACC you must create an eCorp account by clicking on the green rectangle that says “Register.” Next enter your name, email address and password.

While on your dash board page click on the text “Online Services” on the top line.

Click on the text “Frequent User” even if you are not a frequent user because the instructions below will guide you as you complete the online filing.g system.

If You Are Forming an LLC

Click on the radio button to the left of the text that says “Limited Liability Company” then click on the blue button at the bottom right that says “Next.”

If You Are Forming a Professional LLC

Click on the radio button to the left of the text that says “Professional Limited Liability Company” then click on the blue button at the bottom right that says “Next.”

Step 1. Entity Search

If You Reserved a Name

If you reserved a name for your LLC select the “Yes” radio button to the right of the text that says “Have you reserved a name for this entity?

Enter the name reservation ID you got when you reserved the name in the field to the right of the text “Reservation ID:.”

If You Did Not Reserve a Name

If you did not reserve a name for your LLC select the “No” radio button to the right of the text that says “Have you reserved a name for this entity?

Enter the LLC or PLLC Name

Enter the name of the LLC or PLLC in the field to the right of the text “Entity Name.” Click on the blue button that says “Search.”

The ACC’s system will do a search and tell you if the name is available or not available. If the name is not available, enter text for a different name and Search again. A slight variation in the name such as adding the letter S at the end of a word may make the name available.

If the name is available, click in the blue button on the bottom right that says “Next.”

Step 2. Entity Information

On this page you will enter the information for the company’s Articles of Organization. The information you enter on this page will be available to the public.

Entity Information

To the right of the text that says “Entity Email Address” enter the email address to which the Arizona Corporation Commission will sent the approved or rejected Articles of Organization and any other correspondence about the company.

If you enter an email address the will be asked “Are you sure? By providing an entity email address, the entity consents to received official Notices from the ACC by email to that email address. Select “I agree” if you accept.

Effective Date

To the right of the text “Effective Date” you will see today’s date. The date in this field will be the effective date of the new company. If you want the company to be effective (born) in the future enter the desired date, but it cannot be more than 90 days in the future.

Ignore the “Effective Time” field.

Character of Business

Put your cursor in the Character of Business field. You can select the type of business that best describes the new company’s business, but I recommend you select “Any legal purpose.”

Duration

Select “Perpetual (forever)” or “The Entity’s life period will end on this date:” If you select the second choice then enter the termination date of the company in the field to right of this text.

Click in the blue button on the bottom right of the page that says “Next.”

Step 3. Statutory Agent

The new company must have a statutory agent. The statutory agent is what most states call a resident agent. The Statutory Agent does not have general authority to act for the LLC. The Statutory Agent’s purpose and authority is to accept service of process (lawsuits) on behalf of the LLC.

The Statutory Agent can be a member and/or manager of the LLC. A Statutory Agent can be an individual, or an Arizona corporation or LLC, or a foreign corporation or LLC that is authorized to transact business in Arizona. An LLC cannot be its own Statutory Agent – it must appoint someone apart from itself. For example, the LLC can appoint one of its members or managers in his or her capacity as an individual as the statutory agent, but cannot appoint the LLC itself as the statutory agent. If an entity is appointed as Statutory Agent, its name must match exactly the name as shown in the records of the Arizona Corporation Commission.

If an individual is appointed as the statutory agent, that individual must be a permanent, full-time resident of the State of Arizona and must have a permanent, full-time physical or street address in the State of Arizona. The mailing address, if any, of that individual statutory agent must also be in Arizona.

The person or entity you select to be the company’s Statutory Agent (“SA”) must officially accept the appointment by accessing their email and following instructions in that email. The SA has 7 days after you pay and submit he online Articles of Organization in which to accept the appointment via email. If the Arizona Corporation Commission does not receive the auto-confirmation that the SA has accepted the appointment to be the company’s SA, the Articles of Organization that was submitted electronically will be rejected automatically, without review or examination, on the 8 days after payment.

To hire our firm to be your LLC’s statutory agent for $99/year simply complete our online Statutory Agent Questionnaire. When you pay our fee you will get a link to a partially completed pdf Statutory Agent Acceptance form signed by KEYTLaw that you can upload when you e-file your Arizona LLC’s Articles of Organization.

Option 1: Using an Arizona Corporation Commission Registered Statutory Agent

Answer yes or no to the question “Is your Statutory Agent an existing business registered with the Arizona Corporation Commission?

If the statutory agent will be a person or entity that is registered with the Arizona Corporation Commission answer yes to the above question then search for the person or entity. When the search finds the statutory agent, select the statutory agent.

If the Statutory Agent mailing address is different from the agent’s physical address select yes then enter the Statutory Agent’s mailing address.

Option 2: Using a Statutory Agent that is Not Registered with the Arizona Corporation Commission

If the statutory agent is not registered with the Arizona Corporation Commission to be a statutory agent then answer no to the question “Is your Statutory Agent an existing business registered with the Arizona Corporation Commission?”

To designate a person or entity to be the company’s statutory agent select individual or entity then click on the blue button with the text “Create Agent.”

Enter all the information for the person or entity that will be the statutory agent into the fields. When done, click on the blue button at the bottom with the text “Done.”

You will be taken back to the Statutory Agent page. Click on the button on the bottom right that says “Next.”

Step 4. Known Place of Business

The company must have a known place of business address. IThe address MUST be: in Arizona and a street or physical address. The known place of business address MAY be the same as the Statutory Agent’s street address.

Warning: The known place of business address cannot be a U.S. post office box or a PMB (personal mailbox). This means no UPS or similar facility addresses.

Enter the company’s known place of business in Arizona then click on the blue bottom on the bottom right that says Next.

How to Purchase KEYTLaw, LLC’s Address Service.

If you do not have an Arizona address or you have an Arizona address, but you don’t want the address to be on the ACC’s public records and website purchase our firm’s address service for $100/year by completing our online Statutory Agent Questionnaire.

Step 5. Principal Information

The owners of an Arizona limited liability company are called members. Arizona LLCs must have at least one member. Arizona LLCs must be member managed or manager managed. When the LLC is formed its Articles of Organization must state that the LLC is member managed or manager managed. In this Step 5 you must select member managed or manager managed.

A member and a manager can be a person, an entity, a trust or an estate. A manager does not have to be a member (owner). If the LLC is member managed then all members (even a 1% member) have management powers and can sign contracts on behalf of the LLC and bind the LLC to legal obligations. If the LLC is manager managed then members do not have any management powers. Instead, only managers have management powers and can sign contracts on behalf of the LLC and bind the LLC to legal obligations.

Under the new Arizona LLC Act that replaces Arizona’s current LLC law on September 1, 2020, there will be significant liabilities that are levied on members and managers of Arizona LLCs unless the LLC members sign a good Operating Agreement that eliminates the new fiduciary duties. To learn more about Arizona’s new LLC law go to my web page called “Arizona’s New LLC Law.”

If any member of the LLC is a married resident of Arizona that member needs to understand the following about Arizona community property law:

  • All property acquired by either spouse while they are married is automatically community property unless one spouse acquires it as a gift or by inheriting it.
  • If the LLC is member managed, Arizona LLC law requires both spouses to be listed as members in the LLC’s Articles of Organization.
  • If the LLC is manager managed Arizona LLC law requires both spouses to be listed as members in the LLC’s Articles of Organization if they own 20% or more of the LLC’s profits.
  • If the Articles of Organization names only one spouse when both spouses own the LLC interest as community property the failure to name one of the spouses in the Articles of Organization does not cause the omitted spouse to lose any ownership interest in the LLC.
  • If a married Arizona resident wants to own an interest in an LLC as separate property when he or she is a member of an LLC, that person must get the non-owner spouse to sign a document called a “Disclaimer” by which the non-owner spouse disclaims any ownership interest in the LLC.

Community Property vs. Community Property with Right of Survivorship

Arizona has two types of community property: (i) community property, and (ii) community property with right of survivorship. The difference between the two forms of community property is:

  • When an Arizona couple owns an asset as community property (no survivorship) and one spouse dies the one half community property interest of the deceased spouse may not be inherited by the surviving spouse. If the deceased spouse had a will or a trust the deceased spouse’s interest in the LLC will be inherited by the heir(s) named in the will or the trust which could be somebody other than the surviving spouse. If the interest of the deceased spouse is not owned by a trust an expensive, time-consuming and public Superior Court probate may be necessary to transfer the interest of the deceased spouse to the heir(s).
  • When an Arizona couple owns an asset as community property with right of survivorship and one spouse dies, the one half community property interest of the deceased spouse transfers automatically to the surviving spouse without the need for a probate.

For an Arizona married couple who want the interest of a deceased spouse to transfer automatically to the surviving spouse without the need for a probate they must own the asset as community property with right of survivorship, not as community property, which is the default ownership method when an Arizona couple acquires an asset as community property. Arizona community property law requires a married couple to satisfy the following requirements if they want to own an asset as community property with right of survivorship:

  • The spouses must sign a document in which they consent to own the asset as community property with right of survivorship.
  • The document signed by both spouses must contain this statement: Spouse 1 and Spouse 2 agree they are acquiring the asset as community property with right of survivorship, not as community property and not as joint tenants with right of survivorship.

Bottom line for Arizona Married Couples Who Want their LLC Interest to Go to Surviving Spouse

If you are an Arizona resident who owns an interest in an Arizona LLC and you want the membership interest to transfer automatically to the surviving spouse if a spouse dies, both spouses need to sign an Operating Agreement that satisfies the two requirements set forth in the preceding paragraph. If you purchase our LLC Operating Agreement it will satisfy both requirements an cause an automatic transfer of the membership interest of the first spouse to die to the surviving spouse without the need for a probate. To hire us to prepare a custom Operating Agreement for your Arizona LLC for $197 (for a married couple) or $497 for a multi-member LLC) complete and submit our Operating Agreement Questionnaire.

Arizona LLC law requires that the Articles of Organization of every Arizona LLC state that the LLC is:

  • Member managed, or
  • Manager managed.

The type of management determines who has the legal power to sign contracts on behalf of the LLC and take action that causes the LLC to incur legal obligations. If your LLC is member managed then ALL members (even a 1% member) have management power and may sign contracts on behalf of the LLC and cause the LLC to incur legal obligations. If the LLC is manager managed no member has any management powers. Instead, all management powers are vested in the people and/or companies or trusts that are designated by the members as managers.

A member can be both a member and a manager. Managers do not have to be members.

If the LLC adds or removes a manager it must file an amendment to its Articles of Organization with the Arizona Corporation Commission. If you want us to prepare and file this type of amendment for $255 (includes the $60 expedited filing fee) complete and submit our Amendment to Articles of Organization Questionnaire.

This explanation is only for LLCs that will be member managed. If your company will be manager managed skip this explanation and go to the next explanation.

Select the Management Type

To the right of the text “Management Structure” put your cursor on the drop down field that says “Select Management Structure” and click. Select “Member-Managed.”

Enter the Names & Addresses of All Members of the LLC

Arizona LLC law requires that the name and address of EVERY member be listed in the Articles of Organization. The information you are submitting online is for the LLC’s Articles of Organization. Enter the name and address of every member on this page. Each time you enter all the information for a member click on the text at the bottom center that says “Add Principal.”

Select the radio button that says “Individual” if the member is a person or “Entity” if the member is not a person. Enter the name and address of every member of the LLC. Member’s addresses can be any where in the world. If a member is married and owns the membership interest with his or her spouse list each spouse as a separate member.

Click on the text “Select Title” to the right of the word “Title.” Select “Member” for every member. To the right of the title field is a field called “Date of Taking Office.” This field is optional. If you want to insert the date a member became a member type the date in this field or use the calendar.

Note: If the address of a member is the same as the company’s place of business address check the box to the left of the text “Same as Known Place of Business Address.”

When you are done entering all the member information click on the blue button on the bottom right that says “Next.”

To learn more about Arizona married couples owning their interest in the LLC as community property, community property with right of survivorship or separate property click on the + icon above that is to the left of the text “Warning for Married Members: Community Property vs. Separate Property

This explanation is only for LLCs that will be manager managed. If your company will be member managed skip this explanation and go to the previous explanation.

Select the Management Type

To the right of the text “Management Structure” put your cursor on the drop down field that says “Select Management Structure” and click. Select “Manager-Managed.”

Enter the Names & Addresses of All Members Who Own 20% or More of the LLC’s Profits

Arizona LLC law requires that the name and address of EVERY member of the LLC who owns 20% or more of the LLC’s profits be listed in the Articles of Organization. Do not enter information for any member who owns less than 20%. The information you are submitting online is for the LLC’s Articles of Organization. Enter the name and address of every 20% or greater member on this page. Each time you enter all the information for a member click on the text at the bottom center that says “Add Principal.”

Select the radio button that says “Individual” if the member is a person or “Entity” if the member is not a person. Enter the name and address of every member who owns 20% or more of the profits of the LLC and every manager of the LLC. Members’ addresses can be any where in the world. If a member is married and owns the membership interest with his or her spouse list each spouse as a separate member.

Click on the text “Select Title” to the right of the word “Title.” Select (i) “Member” for every 20% or greater member who is not a manager, (ii) “Member and Manager” for every 20% or greater member who is a member and a manager and (iii) “Manager” for managers that are not members.

To the right of the title field is a field called “Date of Taking Office.” This field is optional. If you want to insert the date a member became a member type the date in this field or use the calendar.

Select “Member” for every member. To the right of the title field is a field called “Date of Taking Office.” This field is optional. If you want to insert the date a member became a member type the date in this field or use the calendar.

To learn more about Arizona married couples owning their interest in the LLC as community property, community property with right of survivorship or separate property click on the + icon above that is to the left of the text “Warning for Married Members: Community Property vs. Separate Property

Click on the text “Add Principal” after you enter the data for each member and manager to add the information to the Arizona Corporation Commission’s online database.

When you are done entering member and manager information click on the blue button on the bottom right that says “Next.”

Step 6. Organizer Information

An organizer is the person signing the company’s Articles of Organization. The organizer is not required to be part of the LLC or PLLC in any other way, i.e., the organizer does not have to be a member or a manager. The organizer may be an already-existing entity , but the LLC or PLLC you are forming cannot be its own organizer.

The company must have at least one organizer. It could have more than one organizer, but normally there is no need for more than one organizer. If the company will be issuing membership interests that are state securities then the company may want to have each investor be an organizer of the company. For more on this topic read Richard Keyt’s article called “New Arizona Law Exempts LLC Organizers from Arizona Securities Laws.”

Select “Individual” or “Entity.” Enter the name and address information for the organizer. After you have entered an organizer click on the blue icon on the bottom middle of the page that has the text “Add Organizer.”

When all organizers have been entered click on the blue button with the text “Next” at the bottom right of the page.

Step 7. Upload Document

This page gives you the option to do one of the following:

  • Use the information you submitted to prepare the Arizona Corporation Commission’s form Articles of Organization, or
  • Upload your own custom Articles of Organization in Adobe pdf format that will replace the ACC’s form Articles of Organization.

If you want to use the Arizona Corporation Commission’s form Articles of Organization that contains the information you submitted do nothing on this page other than clicking on the blue button on the bottom right that says “Next.”

If you want to upload custom Articles of Organization answer “yes” to the question “Do you want to use the eCorp Articles as your official document submitted for filing?” then click on “Browse” and upload your Articles of Organization. The maximum file size is 50 megabytes. After uploading your Articles of Organization click on the blue button on the bottom right that says “Next.”

Step 8. Signatures

Each organizer must digitally sign the Articles of Organization. Enter the name of an organizer to the right of the text that says “Organizer Signature.” Check the box that says “I Agree” then click on the blue button with the text “Add.”

The organizer is agreeing to the following:

“By typing/entering my name, I intend to affix my electronic signature acknowledging that this electronic document is submitted in compliance with Arizona law. I certify that the information on the electronic document is true, complete, and accurate as of the date the electronic filing is submitted.”

After you have entered all organizer information click on the blue button on the bottom right that says “Next.”

Step 9. Review

Review all the information you entered. If you want to change anything click on the “Edit” text then edit the information. When you are satisfied all the information is correct click on the blue button on the bottom right that says “Next.”

Step 10. Done

You have two payment options.

1. Pay $50 for regular Arizona Corporation review
2. Pay $85 for expedited ACC review.

The difference is a long time for the Arizona Corporation Commission to review your electronic filing or the really really long time to review the filing. We recommend you pay the additional $35 for expedite review of your filing.

See the current ACC document review times.

If you want expedited review select “Expedite” under the text “Processing Options.”

Click on the blue button on the bottom right that says “Add to Shopping Cart” and pay the fee with your credit card.

Print the ACC’s page that confirms you paid for your company and submitted the information. Save it as one of your company’s important records.

Tasks to Perform After Submitting the Articles of Organization

A. Newspaper Publication. If your LLC’s known place of business is in Maricopa County or Pima County the LLC does not have to publish a Notice of Publication in a newspaper. If the LLC’s address in not in one of those two counties the LLC must publish a Notice of Publication in an ACC approved newspaper in the county in which the LLC’s place of business is located. The ACC will send publication information to the address of the LLC when it approves the Articles of Organization.

B. Employer ID Number. Get an Employer ID Number for the LLC from the IRS. The LLC needs its own EIN. It’s easy to get using the IRS’ online wizard.

C. Open a Bank Account. The LLC needs its own bank account. To open a bank account a member or manager of the LLC must go to a bank with ID and give the banker a copy of the approved Articles of Organization and the LLC’s employer ID number.

D. Set Up the Books. You must create a bookkeeping system for the LLC’s financial records. We recommend QuickBooks. Most accountants can set up the books for you. Our bookkeeper is CPA for Hire, P.C. We use its online QuickBooks service. Call Joy Jaske, CPA, at 480-437-9022 or email her at info@cpaforhire.com.

E. Sign an Operating Agreement. Although an Operating Agreement is not required by Arizona LLC law, we recommend that all LLCs have a properly worded Operating Agreement signed by all of the members. The Operating Agreement signed by the sole member of a single member LLC shows a court that the member is treating the LLC like a business rather than a hobby. Multi-member LLCs that do not have a good Operating Agreement signed by all of the members are asking for big trouble. Without an Operating Agreement members of a multi-member LLC do not have anything in writing that says what percentage of the LLC they own.

Richard Keyt's Reasons Why All Arizona LLCs Need an ALLCA Compliant Operating Agreement

If you have an existing Arizona LLC or will form one in the future the LLC needs an Operating Agreement drafted by an experienced Arizona LLC attorney with provisions that comply with Arizona's new LLC law effective September 1, 2019.  Current Arizona LLC is being replaced.

Multi-Member LLC Alert:  All multi-member Arizona LLCs need an Operating Agreement drafted to eliminate the many liability creating statutes contained in Arizona's new LLC Act.  The new LLC law levies duties on members and managers the violation of which can cause a member or manager to incur financial liability.  Multi-member Arizona LLCs need an Operating Agreement that eliminates these liability traps and makes the company a limited liability company rather than a liability company.

Here are some reasons why all Arizona LLCs need an ALLCA compliant Operating Agreement:

To learn more about the importance of Operating Agreements read our articles called:

We charge $247 for a custom Operating Agreement for a single member LLC or an LLC owned only by a married couple. Our fee for a custom Operating Agreement for a multi-member LLC is $497. To hire Arizona LLC attorneys who have prepared 6,200+ Operating Agreements to draft a custom agreement for your LLC submit our online Operating Agreement Questionnaire.

Contact Arizona LLC Attorneys Richard Keyt or His Son Richard C. Keyt

If you have questions about forming an Arizona LLC call Arizona LLC attorneys Richard Keyt (480-664-7478) or his son former CPA Richard C. Keyt (480-664-7472). They don’t charge to answer questions about forming or operating Arizona limited liability companies.