This article is for people who want to form an LLC in Arizona themselves. It explains in 6 steps how to get an LLC in Arizona (i.e., the Arizona LLC requirements). It is for people who want a do-it-yourself LLC. The primary Arizona LLC benefit is asset protection by: (i) creating a shield between the business of the LLC and its owners to protect the owners from liabilities that arise from operating the business, and (ii) preventing a creditor of an owner from getting assets owned by the LLC.
Note: The info-graphic in the video summarizes the six steps required to form an Arizona LLC. Each step is explained in great detail below.
Warning: Arizona’s New LLC Act Harms Members of LLCs that Lack a New Law Compliant Operating Agreement
We offer two different new Arizona LLC law compliant Operating Agreements: (1) $297 for a one member LLC or an LLC owned by a married couple, or (2) $497 for a multi-member LLC. To hire us to draft a custom new Arizona LLC law compliant Operating Agreement complete our online questionnaire.
a. Make Sure the Name Does Not Infringe on a Federal Trademark
Finding a good name for your new Arizona limited liability company can sometimes be the most difficult piece of the formation puzzle. Ideally, you want a name that: (i) will afford strong federal trademark protection, but will not infringe on anybody’s trademark or service mark, (ii) will be easy for your customers to remember, (iii) will describe your products or services, and (iv) will allow you to obtain .com, .net., .org, .biz and .info domain names. For information on obtaining domain names, see How to Obtain a Domain Name that Does Not Infringe on a Trademark.
One way to check if your desired company name will infringe on a federally registered trademark or service mark is to search your prospective name and variations thereof on the searchable database of the United States Patent & Trademark Office.
Unfortunately, obtaining a strong trademark that describes your product or services is frequently not possible. These two goals are in conflict. Most clients of trademark lawyers want a trademark that describes their products or services. For example, if I have a bar and grill called Rick’s Bar & Grill, it describes my business, but federal trademark law grants a lower level of protection to marks that are merely descriptive of the products or services. People like descriptive trademarks because they are descriptive. Trademark lawyers prefer marks that are arbitrary such as Apple® when used to identify computer products or fanciful marks such as Xerox® because these types of marks provide the highest level of trademark protection.
b. Confirm the Name is Available by Checking the Arizona Corporation Commission’s Name Database
Warning: Before you file the Articles of Organization to form your new Arizona LLC you must do an Arizona LLC search to check the Arizona Corporation Commission’s name database to determine if your desired name is available. You must do an Arizona LLC search for available names before filing the LLC’s Articles of Organization. If your LLC Arizona search finds that your desired name is not available the ACC will reject the Articles of Organization if you file the Articles of Organization with the rejected name.
Go to the ACC’s Entiy search page then: (i) enter the desired name in the Entity Name field, (ii) click on button titled “Name Availability Check.” The ACC’s name checker will do an Arizona LLC lookup for your desired name and tell you if the name is available or not available.
Note: Always do an LLC Arizona lookup to determine if your desired name is available.
2. Select the Arizona LLC’s Statutory Agent
Every Arizona limited liability company or LLC qualified to do business in Arizona must have and maintain a statutory agent (aka resident agent in some states) located in Arizona. The purpose of a statutory agent is to give notice to the public of a person or entity authorized by the company that can be served with legal documents as the agent of the company. The statutory agent is the person or entity that can be served with a summons and complaint filed in a lawsuit.
The statutory agent must be one of the following:
An adult individual who resides in Arizona.
A domestic company formed under Arizona corporate law.
A foreign company authorized to transact business in Arizona.
A limited liability company formed under Arizona law.
A limited liability company authorized to transact business in Arizona.
The statutory agent must have an Arizona street address rather than a post office box. The person or entity that will be the statutory agent must complete and sign the Arizona Corporation Commission’s Statutory Agent Acceptance form.
A member of the LLC who has an Arizona address frequently acts as the member’s Arizona LLC.
3. Prepare & File the Articles of Organization with the Arizona Corporation Commission
Here are two ways to file for LLC Arizona and create a new Arizona LLC.
a.Hire an Arizona LLC attorney who has formed 7,800+ LLCs.
b.Cost to Form an Arizona LLC Online to Form a Do-It-Yourself Arizona LLC for $50 or $85.
Option 1: Form the Arizona LLC the Easy Way Online
The quickest, easiest and cheapest ($85) way to form an Arizona limited liability company is to create the LLC yourself in a 10 – 15 minute data input session using the Arizona Corporation Commission’s online efile Arizona LLC formation system. To form a new Arizona LLC using the ACC’s online efiling method follow Richard Keyt’s detailed 10 step guide in his article called “How to Form an LLC in Arizona Online in 10 Minutes 2021.” This online filing uses the ACC’s LLC Arizona forms system.
Option 2: Arizona LLC Filing Requirements to Form an Arizona LLC the Hard Way Using Old Fashioned Paper Forms
The “organizer” must complete, sign and file the Arizona Corporation Commission’s two page fill in the blanks Articles of Organization Arizona. If you use this ACC form you must also complete and submit both of the following documents:
When you are ready to file the paper form Articles of Organization for your new Arizona LLC, hand deliver or mail the following to the ACC:
the completed and signed Articles of Organization
the completed cover sheet
cash or check to pay the filing fee. See the next section for fee information
File your Articles of Organization and pay the filing fee at either of the following ACC locations:
1300 W. Washington, 1st Floor, Phoenix, AZ 85007.
ACC offices are open Monday – Friday, 8:00 a.m. to 5:00 p.m., except holidays. You may mail thel the Articles of Organization, a coversheet and a check for the filing fee to the ACC. The ACC does not accept credit cards with paper filings.
Make a copy of the Articles of Organization of your Arizona LLC that you submit to the ACC and retain the copy in your company file. I recommend that when you file your Articles of Organization, you submit an extra copy and ask the ACC to stamp the extra copy to show the date the ACC received the Articles of Organization. This extra copy can be shown to other parties (such as a bank when you open a bank account) before you receive the final approved Articles of Organization from the ACC.
4. Pay the Filing Fee
When you submit your Articles of Organization, you must also pay the filing fee, which is $50. You can pay the fee with cash or your check.
You may also pay an extra $35 for expedited review service. I recommend that you pay the extra $35, which will cause the ACC to review your Articles of Organization within the shortest time period possible. If you do not pay the extra $35 it could take up to a month for the ACC to approve or reject your Articles of Organization. See the ACC’s latest Articles of Organization processing times. The Arizona LLC cost if you form the Arizona LLC yourself is the filing fee of $50 or $85.
When the articles are approved, the date of approval reverts back to the date the articles were filed. The problem with using regular review service rather than the expedited review is that it can substantially reduce the time remaining to publish a Notice of Publication and deliver the affidavit of publication to the ACC if your LLC must publish a Notice of Publication.
The good news is that once you form your Arizona LLC there are no additional or annual Arizona llc filing fees or Arizona llc taxes.
5. Publish a Notice of Publication in an ACC Approved Newspaper (Maybe)
If the LLC’s statutory agent’s address is outside Maricopa County or Pima County then a notice of the filing of the Articles of Organization shall be published in a newspaper of general circulation in the county of the statutory agent’s street address for three consecutive publications. The notice must contain the following information:
1. the name of the limited liability company that complies with Arizona Revised Statues Section 29-3112.
2. the principal address, which may be the same as the mailing address of the company’s statutory agent.
3. the name and street and mailing addresses in this state of the company’s statutory agent.
4. whether the company is a manager-managed limited liability company or a member-managed limited liability company and either of the following:
(a) if the company is a manager-managed limited liability company, the name and address of each manager and the name and address of each member who owns a twenty percent or greater interest in the capital or profits of the company.
(b) if the company is a member-managed limited liability company, the name and address of each member of the company.
An affidavit evidencing the publication may be filed with the Commission.
If the LLC’s statutory agent’s address is outside Maricopa County or Pima County you may wait to publish until the ACC approves the Articles of Organization to prevent wasting the publication costs if the articles are rejected.
The cost to publish depends on the newspaper, the county in which the newspaper is located and the length of the Notice, but you should budget $55 – $85. Caution: The Yuma Daily Sun is the only ACC approved newspaper in Yuma County so it grossly over charges for legal publications. In the past, this newspaper charged me three times more to publish in Yuma County than what I paid in Maricopa County for similar publication.
Failure to Comply with the Publication Requirements
If your LLC is required to publish and it fails to timely publish the Notice of Publication, the ACC may revoke the charter of the company, which causes it to die and cease to exist.
6. Members Sign an Operating Agreement that Eliminates the Harmful Provisions of Arizona’s New LLC Law
***** This is the end of the LLC formation process. *****
After forming your LLC there are several additional important tasks the LLC may need to complete. These important post-formation tasks are:
A. Members Should Sign an Operating Agreement that Eliminates the Harms Caused by Arizona’s New LLC Law
The best and easiest time to adopt an Operating Agreement is when the company is formed. I have seen too many sad member disputes that could have been avoided with a good Operating Agreement. An Operating Agreement is like insurance, i.e., if you never need it, you don’t miss it, but if you need it and don’t have it, you may suffer greatly.
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I have tow Operating Agreements:
the $297 Operating Agreement for a single member LLC or a two member LLC owned by a married couple, or
the $497 Operating Agreement for a multi-member LLC.
To purchase an Operating Agreement for your Arizona LLC submit our online Operating Agreement Preparation Questionnaire or call me, Richard Keyt at 480-664-7478 and give me your LLC information. Look at the questionnaire and you will see that large number of questions we ask means you get a customized agreement that contains the provisions you want. Nobody else offers such a comprehensive custom Operating Agreement.
B. Obtain a Federal Employer Identification Number from the IRS
Most newly formed companies must obtain a federal employer identification number. Banks require this ID number for bank accounts. If the company will have employees and pay wages, it must file payroll tax returns and pay payroll taxes using the ID number. A company obtains a federal ID number by completing IRS Form SS-4 (pdf), Application for Employer Identification Number, and filing it with the Internal Revenue Service. See also the Instructions for Form SS-4 (pdf) and IRS Publication 1635 (pdf), Understanding Your EIN – Employer Identification Number.
You should apply for an EIN early enough to have your number when you need to open a bank account, file a tax return or make a tax deposit. You can get an EIN over the phone by calling the Tele-TIN phone number for your state, which for Arizona entities is 1-800-829-4933. Before calling the IRS, fill in the IRS Form SS-4 as best you can because the IRS may ask you to refer to it while on the phone and may ask that you sign and mail or fax a copy of the form to the IRS within 24 hours. The person making the call must be authorized to sign the form or be an authorized designee.
You may also obtain a federal EIN online in a matter of minutes from the IRS website.
After completing the IRS’ online questionnaire, the IRS’ website will immediately issue an EIN. Online EINs are available Monday – Friday 7 am – 11 pm Eastern Standard Time without the need to file any paper document with the IRS. The online EIN is a provisional EIN, but it will be the permanent federal employer identification number for your business unless voided by the IRS. The IRS may void an EIN obtained online if: (i) the name and social security number of the principal officer do not match Social Security Administration records, or (ii) the business has already been assigned an EIN. Keep a record of your application for an EIN. Be sure to print your SS-4 application after the EIN is assigned and keep a paper copy for your records. You can do this by clicking the “Print Form” button after receiving your EIN.
Applications for a federal EIN for LLCs must provide the following information in the online Form SS-4: (i) the LLCs exact legal name in box 1 ending with LLC without punctuation, (ii) the type of entity for tax purposes in box 8a (i.e., will the LLC be taxed as a partnership, sole proprietorship, or corporation), and (iii) type the words single or multi member LLC in box 8a on the line called Other, but do not check the Other radio button.
Third parties may also request EINs via the internet on behalf of a taxpayer. A third party who obtains an EIN for another party must retain a completed copy of the IRS Form SS-4 signed by the taxpayer and the signed statement authorizing the third party to file the online application.
If you prefer, you can fax a completed Form SS-4 to the appropriate service center (215-516-3990 for Arizona), and they will respond with a return fax in about one week. If you do not include a return fax number, it will take about two weeks. If you apply by mail, send your completed Form SS-4 at least four to five weeks before you need your EIN.
Note for Single Member LLCs: A single-member LLC that intends to be taxed as a sole proprietorship does not need an EIN and generally should not file IRS Form SS-4. Generally, the LLC should use the name and EIN of its owner for all federal tax purposes. However, the reporting and payment of employment taxes for employees of the LLC may be made using the name and EIN of either the owner or the LLC. If the LLC-applicant indicates in box 13 of IRS Form SS-4 that it has or expects to have employees the IRS will assign the single-member LLC its own EIN.
C. Elect the LLC’s Form of Federal Income Taxation
One of the major reasons to form a limited liability company is that the LLC may chose how it will be taxed for federal income tax purposes. Subject to certain limitations, an LLC may be classified for federal income tax purposes as: (i) a sole proprietorship, (ii) a partnership, (iii) a C corporation, or (iv) an S corporation. Whether an LLC can select a particular federal tax classification depends on the number and type of members. For a detailed explanation of the four ways an LLC can be taxed see Arizona LLC attorney and former CPA Richard C. Keyt’s article called “How are LLCs Taxed?”
A single member LLC may elect to be classified as a sole proprietorship, a C corporation or an S corporation. Multi-member LLCs may elect to be taxed as a partnership, C corporation or S corporation. The LLC, however, may not elect to be taxed as an S corporation unless it meets all requirements applicable to S corporations. If the LLC does not elect its classification by filing IRS Form 8832 (pdf), the IRS assigns a default classification of partnership (for multi-member LLCs) or sole proprietorship (for single member LLCs).
Even though it is owned by two members, an LLC that is owned solely by a husband and wife as community property may be taxed as a sole proprietorship or as a partnership. The couple may elect either form of taxation. IRS Revenue Procedure 2002-69 states that the IRS will accept the married couples’ choice to be taxed as a sole proprietorship or as a partnership.
In general, the difference between being taxed as a corporation and being taxed as a partnership is that partnerships are not taxpaying entities and corporations (other than S corporations) are. The profits, losses and other tax items of an LLC taxed as a partnership are passed to the members of the company prorata according to their ownership and included on the members’ federal income tax returns. By electing to be taxed as a partnership for federal income purposes, a multi-member company can avoid the double tax that can occur with a corporation when the corporation has taxable income.
The LLC may elect to be taxed as a partnership or as a corporation for federal tax purposes by filing IRS Form 8832 (pdf), Entity Classification Election. For more information, see IRS Publication 542 (pdf), Corporations, and IRS Publication 541 (pdf), Partnerships.
Before electing how your Arizona LLC will be taxed, you should consult with your accountant because the election will have significant economic consequences. Facts and circumstances applicable to each new Arizona LLC will influence the taxation election that is best. An erroneous tax election can be very expensive.
D. Get Arizona Department of Revenue ID Numbers & Transaction Privilege Tax Licenses
If your Arizona LLC will engage in an activity that is taxable under the Arizona transaction privilege tax statutes, it must apply for a transaction privilege tax license for each business location before engaging in business. If the Arizona LLC will pay wages to employees, it must obtain an Arizona withholding number and an Arizona unemployment number. To obtain a transaction privilege tax license, an Arizona withholding number or an Arizona unemployment number, the Arizona LLC must complete and file an Arizona Joint Tax Application with the Arizona Department of Revenue. For licensing questions on transaction privilege or withholding call (602) 542-4576 or 1-800-634-6494 (from area codes 520 and 928). For questions on unemployment tax call (602) 248-9396 or email the Arizona Department of Economic Security.
E. Starting a New Business in Arizona
The following list contains links to web sites that have additional information about and resources related to starting a new business in Arizona:
Call 480-664-7478 NOW if you want an LLC to: (1) prevent creditors of your business or investment real estate from taking your personal assets, and (2) asset protect your personal assets from debts, liabilities and lawsuits.
Arizona LLC attorney Richard Keyt (practicing business law in Arizona since 1980) offers three LLC formation packages and prices: $397 (Bronze package), $597 (Silver package) & $997 (Gold package). For a detailed explanation of the LLC formation services we provide for each of the three packages see “Contents of Our Bronze, Silver & Gold LLC Formation Packages.”
Pay with your major credit in our secure online site for a Bronze ($397), Silver ($597) or Gold ($997) LLC package.
Although it is relatively easy and inexpensive to form an Arizona LLC and the information in this article tells you how to do it, I recommend that you consult an Arizona business attorney when forming an Arizona LLC because there are many issues that may require legal advice and action. For example, when offering to issue and issuing membership interests and securities, all LLCs must comply with federal and applicable state securities laws. It may be advisable to file trademark applications with the U.S. Patent & Trademark office to protect your trademarks and/or service marks. Forming the new Arizona LLC is just the “tip of the iceberg” with respect to operating a business in the LLC form.
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