Arizona LLC

This is a step-by-step process of forming an Arizona LLC, including choosing a compliant business name to registering the business, and filing the paperwork and fulfilling the continuing legal obligations.

1. Name Your Arizona LLC

Finding the appropriate name of your LLC is a step that should be taken seriously. The name of your business must be the name that people can easily remember and the one that reflects what your business is all about and in line with the State of Arizona naming policies.

Methods of Selecting a Name of the Business

There are several methods that you can use in the naming process:

Define Your Business Idea: This is a clear description of what you will make or sell then come up with a name.
Request Feedback: solicit the input of individuals whom you can trust and who are aware of your vision.
Search Online: Determine the availability of domain names and social media addresses and search similar businesses.
Business Name Generators: Business name generators help get the idea going, but they do not supersede making intelligent choices of branding.

Your brand is your business name and that is what the customers first see of your enterprise, therefore, you should not rush up on this part.

Availability of Checks in Arizona

After a list of name ideas, check on the availability on Arizona Corporation Commission (ACC) database. One should not only look at the exact matches but also check on the names that may be closely similar as Arizona needs the LLC names to be easily differentiated.

Arizona: LLC name should include the term Ltd Liability Company or an approved short name (LLC or L.L.C.) and must not include any words that may cause your LLC to be mistakenly identified with any state agency.

Moreover, the name might not contain such words as corporation, incorporated, association, or abbreviations of these words. The name of your LLC should also be but not like any other business name registered in Arizona.

Check Federal Trademarks

Once the state availability is confirmed, search the US Patent and Trademark Office (USPTO) database to confirm that there is no federal level trademark on the name.

Name Reserve Your Arizona LLC

Once you have made sure that the name is available, it is better to reserve your LLC name.

How to Reserve a Name:

Go to the eCorp system of Arizona Corporation Commission (ACC).
Develop an online profile in case you do not have one.
Name Select an Entity Name.
Fill out application online and make payment.

In Arizona, the cost of name reservation is $45. This will involve a $10 filing charge and a $35 expedited processing charge.

Name of Business / Trading Name

When you need to use a name that is not the legal name of your LLC, then you are required to use a DBA otherwise referred to as trade name in Arizona.

Why Register a DBA?

To present new services or products to a new brand.
To receive money and open bank accounts in another name of business.

Background: JJ has developed Waffles LLC, but can use JJ Muffins as a trade name.

How to Register a Trade Name:

Register Trade Name with Arizona Secretary of State through the Internet.
Pay the $10 filing fee

The trade names should be registered on the internet, they are registered within several weeks and last five years.

2. Select a Statutory Agent

Arizona expects all LLC to designate a statutory agent to accept legal papers, tax bills and formal letters on behalf of the company.

Requirements of Statutory Agent

The statutory agent must:

Be at least 18 years old
Physical street address in Arizona.
Be accessible within the normal business hours.
The agent should be allowed to conduct business in Arizona in case the agent is a business entity.

You can be your own statutory agent, or it is convenient, private, and reliable to employ professional services of many LLC owners.

3. Decide Your Management Organization

The two structures of Arizona LLC are member-managed and manager-managed, and the proper structure will depend on the extent to which the owners would want to be involved in the daily operation.

Member-Managed LLC

Members are involved in the daily running.
Most suitable to small LLCs that are actively owned.

Manager-Managed LLC

The members choose one or several managers to manage.
Optimal in cases where external investors are passive.
Managers can be members and non-members.

Arizona is one that will demand you to indicate the management structure in your Articles of Organization.

4. Request Corporation Commission of Arizona to file Articles of Organization

In order to establish your LLC officially, you will have to submit Articles of Organization to Arizona Corporation Commission.

Information Required

LLC name
Principal office address
Name of statutory agent, address.
Statutory office address
Management structure
Mailing address and name of the members or managers.

Once the form has been filled in, ensure that you go through all the details before paying.

The filing fee is $50. When you file online you would be normally informed in seven to nine business days. Mails may take up to three weeks to be processed.

Arizona Corporation Contact Commission Information

Phoenix Office:
1300 W. Washington Street
Phoenix, AZ 85007

Tucson Office (Walk-ins):
400 W. Congress Street
Tucson, AZ 85701

Phone: (602) 542-3026
Email: answers@azcc.gov

5. Write an Operating Agreement

An Operating Agreement stipulates the internal organization and the rules of operation of your LLC.

An operating agreement is not a legal requirement in Arizona, although it is highly encouraged, even the single-member LLCs.

Common Operating Agreement Provisions

Name and address of LLCs (LLC name and address of the principal address)
Duration of the LLC
Statutory agent details
Ownership percentages
Voting rights and management power.
Distribution of profit and loss.
Amendments of the members and changes.
Resolution of dispute procedures.
Rules of record-keeping and communication.

In spite of templates being found online, it is advisable to have them reviewed by a lawyer to make sense and be enforceable.

6. Register Your Employer Identification Number (EIN)

The IRS issues an EIN which is used in tax reporting and identification.

You must obtain an EIN if:

Your LLC has a membership greater than one.
You plan to hire employees
Corporate taxation you choose.

According to the IRS, the responsible party must be listed on the application of EIN, and such a person has to be an individual with control over the LLC.

Any EIN application, mailed, sent by fax or online, should have the name and Taxpayer Identification Number (SSN, ITIN, EIN) of the true principal officer, general partner, grantor, owner, or trustor of the entity. This individual is known as the responsible party by the IRS. The party concerned is the one who is in control, manages or directs the entity and its funds and assets. The party responsible should be a natural person with exception being government entities.

7. Secure Business Permits and licenses

The federal, state, and local level licenses may be necessary depending on the business activities.

Common Requirements

Licenses on regulated industries on a federal level.
Arizona Commerce Authority state license.
Transaction Privilege Tax (TPT) License in case of the selling of taxable goods or services.
County/city business licenses.

The inability to get the right licenses may lead to fines or closure of the business.

This should be done as a crucial requirement to the formation of LLC and, therefore, you should inquire the offices of your state and local governments to determine all the licenses and permits that you require.

8. Determine Your Tax Status

The default treatment of LLCs is to treat them as pass-throughs.

Default Tax Treatment

Single-Member LLC: LLC is taxed in the same way as a sole proprietorship; the income is declared on Schedule C.
Multi-Member LLC: The taxation is the same as a partnership; the income is passed through via Form 1065.

Optional IRS Elections

C-Corporation: LLC makes payment of corporate tax; dividends are taxed to the owners.
S-Corporation: The owners will get salary and distributions which can possibly minimize self-employment taxes.

Both options have varying tax implications and are to be looked at.

LLC Overview in Arizona - Addition Requirements

Open a Business Bank Account

It is important to keep business and personal finances apart to ensure that the liability is covered and to have an easy time in bookkeeping.

Apply to get a Business Credit Card

A business credit card assists in credit establishment to the business and control of start up and operating costs.

Get Business Insurance

The common insurance plans are:

General liability
Professional liability (E&O)
Workers' compensation
Machinery and equipment insurance.
Commercial auto
Business Owner's Policy (BOP)

Maintain LLC Records

Keep copies of:

Articles of Organization
Operating Agreement
Licenses and permits
Contracts and accounting.

None Annual Reporting Requirement

Arizona does not expect LLCs to submit annual reports and annual state filing fees.

Arizona LLC FAQs

Starting an Arizona LLC involves several costs. Reserving a business name costs $45, while filing the Articles of Organization costs $50. If you plan to operate under a DBA, the filing fee is $10. Business license costs vary depending on your location and industry. While Arizona does not require annual LLC reports, certain businesses may still incur renewal or licensing fees.

You can search for an Arizona LLC using the ACC eCorp Entity Search. Enter the business name or entity number to view the LLC's status, filing history, and statutory agent details. For DBAs, check the Secretary of State's Trade Name database.

To file a DBA (trade name), confirm the name's availability using the Secretary of State's search tool, then submit the online Trade Name Application and pay the filing fee. Processing typically takes a few weeks, and trade names must be renewed every five years.

To convert an LLC to a Professional LLC (PLLC), file Articles of Amendment with the Arizona Corporation Commission, update the business name to reflect "PLLC," pay the filing fee, and ensure all required professional licenses are active and current.

An Arizona LLC name must include "Limited Liability Company" or an approved abbreviation, be distinguishable from other registered names, avoid restricted banking or government-related terms without approval, and not mislead the public or infringe trademarks.

Online filings generally take a couple of weeks to process, while mail filings take longer due to delivery and handling times. Expedited processing is available for faster approval.

Arizona LLCs are typically taxed at the owner level. Members pay federal income tax and Arizona state income tax on their share of profits. LLCs selling taxable goods must collect Transaction Privilege Tax, and those with employees must handle payroll and withholding taxes. LLCs that elect corporate taxation are subject to corporate income tax rules.

No, Arizona does not require LLCs to have an operating agreement. However, without one, the LLC is governed by default state rules. A written operating agreement provides clarity, reduces disputes, and strengthens liability protection.

Yes, you may serve as your own statutory agent if you have a physical Arizona address and are available during business hours. However, your address becomes public record, which is why many owners choose professional statutory agent services.

Acting as your own statutory agent costs nothing. Professional statutory agent services typically charge an annual fee, depending on the provider and level of service.

How to Start your own LLC in Arizona