Deciding what form of company to start can be very difficult. Including liability, costs, taxation issues, and more, there are many factors to consider when determining the type of business entity you wish to form. One type of business entity that many people find advantageous is the LLC or limited liability company.
As you’ll see further below, for more reasons than one, limited liability companies come with many different benefits for those who start them. Regardless of the benefits, starting your own LLC requires you to follow a plethora of steps, which is the case whether you are in Arizona or otherwise. That said, today we’re here to provide you with a step-by-step guide on how to start an LLC in Arizona.
How to Start an LLC in Arizona: Step by Step
As you are about to see, technically speaking there are only five steps to starting an LLC in California. They’re not overly difficult, and it won’t cost you that much money either.
However, in order for your application to start an LLC to be accepted, you’ll have to follow all of the information and detail that we provide below with great caution. You can’t miss anything!
1. Choose and Register an LLC Name
Perhaps one of the most important steps to starting an LLC in Arizona is choosing a name for the business. There are quite a few things that you need to keep in mind when choosing a name for your Arizona LLC.
Ensuring Your LLC Name Meets Arizona’s Requirements
- The state of Arizona requires all companies in the form of an LLC to contain the words limited liability company, limited company, or any abbreviations, including LLC, L.L.C, LC, or L.C in the name. These words or abbreviations must appear somewhere in the company name.
- Your limited liability company’s name in Arizona may not include any words that could imply a state relationship, such as credit union, university, or bank.
- A limited liability company in the state of Arizona may also not include any acronyms or words that could confuse your business with any sort of government entity, such as FBI, FDA, NSA, or anything else of the sort.
Besides those three main points, another important factor to consider is that the name of your LLC has to be free. You cannot name your business with a name that is already in use by any other business in the state of Arizona. Therefore, you want to check with the Arizona Corporation Commission, specifically the business name database, to see whether or not the business name you wish to use is already in use or if it is free.
Read more on: Is My Business Name Taken? How to Check?
Trademark and Domain Name Check
On that note, you may also want to check to see if the name is trademarked. If there is a federal trademark on the business name you wish to use, you may want to avoid it in order to avoid legal issues. Furthermore, if you ever want to become a brand on a national level, then you’ll want to trademark your own name as well.
Not only should you check to see if your business name is available in your state, but you should check the domain or URL as well. In today’s age, having a website for your business is very important, and the name of your website should exactly match the name of your business.
Therefore, you should not choose a business name or the domain name is already taken by another, as this can cause confusion. Therefore, doing a domain name check is useful on this front.
What’s really beneficial is that in the state of Arizona, if you’ve chosen a name, but you’re not quite ready to file the paperwork yet, you can always reserve the name for your LLC. The state of Arizona will determine whether or not the chosen name for your LLC is acceptable, and along with the small fee, allows you to reserve it for a full 120 days.
2. Designate an Agent of Service for Your LCC
In terms of how to start an LLC in Arizona, the next step after choosing your name is to choose an agent, otherwise known as an agent of service.
All companies in the state of Arizona, whether an LLC or otherwise, have to designate an organization or purpose that is allowed to accept legal and other important documents, as well as tax documents. In the state of Arizona, this person is called a statutory agent, although in most other states this is known as a registered agent.
Either way, the statutory agent you choose has to be a resident of Arizona with a physical street address or have a business located in Arizona, and has to sign a file known as a statutory agent acceptance form with the Arizona Corporation Commission. You can be your own registered agent for your limited liability company, you can hire another person to do so, you can hire a service designated to do so, or you can hire an attorney.
3. File the Articles of Organization
In order to be officially registered as a limited liability company in the state of Arizona, you have to go to the ACC and file the articles of organization. The articles of organization are specific legal documents that allow you to form a limited liability company. You should be able to find the form using the link above.
Once your articles of organization are approved by the ACC, you then have an official limited liability company.
There are various pieces of information that you must include with your articles of organization, including the legal name of the limited liability company, the physical address, the statutory agent, the management structure, and details in regard to the members and owners.
At this point, you’ll also need to indicate whether you are forming a standard LLC or a professional LLC. If we are talking about a standard LLC, this is made-up of one or more members who are forming a company to engage in nonprofessional activities.
A professional LLC on the other hand consists of members who are professionals and are performing services that require some sort of licensing by the state.
The easiest way to do this is by filling out the online form, although you can also print it out and mail it in. The following is the mailing address:
Arizona Corporation Commission, Examination Section
1300 W. Washington St.
Phoenix, Arizona 85007
You may also fax the paperwork to (602) 542-4100 for regular service or to (602) 542-0900 for same-day service.
Running a Notice of LLC Formation
Once the state of Arizona reviews your articles of organization and accepts them, your LLC should officially be active.
Also within 60 days1 of the formation of your LLC, you must publish a notice of LLC formation. It should runs in a local newspaper with general circulation.
If you fail to do this, your LLC will be dissolved. The cost of running a notice of LLC formation in Arizona is anywhere between $30 and $300.
4. Create the LLC’s Operating Agreement
Although the state of Arizona doesn’t officially require LLC’s to form an operating agreement, it is a good idea. An operating agreement helps to ensure limited liability to company assets. It also helps to define relationships between the company and members. An Arizona business can use an operating agreement to record how the business should function.
Other plus of the operating agreement is that about legal disputes, the courts will know what procedures to follow. If you don’t have an operating agreement in place, during disputes, Arizona will refer to its own laws and regulations.
Furthermore, Arizona requires all LLCs to define their management structures. That’s why it is a good thing to explain in an operating agreement. It helps prevent disputes over responsibilities from arising. There are a variety of pieces of information that you should include in an operating agreement, including the following:
- Voting procedures
- Management structure
- Financial accounting
- Transferring ownership
- Daily operations,
- LLC mission statement
5. Obtain Your EIN
The final step in the process of starting an LLC in Arizona is to obtain your federal tax identification number. It is also known as your EIN or employee identification number.
The Internal Revenue Service assigns all companies this nine-digit number. It is used for tax purposes, as well as for identification purposes.
For the record, only companies that have more than one member need to have an EIN. If you are a single member limited liability company, then you could always use your Social Security number.
With that being said, it’s still a good idea to get an EIN, even if you are a single person. It still provides you with some extra benefits.
For instance, getting a business loan and starting a business bank account is much easier when you have an EIN. Once you have your EIN, you officially have a limited liability company that operates legally.
Conclusion
As you can see, starting a LLC in Arizona is not overly difficult, as long as you follow the steps. If you manage to follow all of them, then you should have no issues forming an it.
- This means 60 days after the state approves your articles of organizations. ↩︎
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