How to start an Arizona LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members’ personal assets, like their house or car, are usually safe. 

Arizona defines an LLC as “an entity that is formed under this chapter or that becomes subject to this chapter under article 10 of this chapter or section 29-3110" (Arizona Revised Statute Title 29). That means an LLC in Arizona is a company created within the state or a company that becomes subject to Arizona’s state regulations surrounding LLCs (Title 29, Chapter 7).

If that sounds like a lot of legal jargon – that’s because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in Arizona?

You may want to register for an LLC in Arizona when:

• You own or want to start a business in Arizona, or want to expand an existing business into Arizona, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of Arizona. 
• You own or want to start a business, and want to register in Arizona to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in Arizona if I live in another state?

Any LLC that does business in Arizona must file with the State of Arizona. Arizona does not outline any specific actions that constitute transacting business, however, these actions, among others, are not considered to be doing business in Arizona:

• Maintaining, defending or settling any proceeding.
• Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs.
• Maintaining bank accounts.
• Maintaining offices or agencies for the transfer, exchange and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities.
• Selling through independent contractors.
• Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.
• Creating or acquiring indebtedness, mortgages and other security interests in real or personal property.
• Securing or collecting debts or enforcing mortgages and security interests in property securing the same.
• Owning, without more, real or personal property.
• Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature.
• Transacting business in interstate commerce.
• Being a limited partner of a limited partnership or a member of a limited liability company.

LLCs based in Arizona are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in Arizona

1. Find a unique name for your Arizona LLC

The state of Arizona requires that the names of all LLCs in the state:

• Include the term "LLC" or "Limited Liability Company," also known as an "entity designator." 
• "L.L.C." and the abbreviations "LC" and "L.C." are acceptable.
• Do not contain the words "association," "corporation," "incorporated," or an abbreviation of those words.
• Are not too similar to existing LLCs in the state. You can search on the state’s database to make sure.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in Arizona and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In Arizona, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide an Arizona address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have an Arizona address) or choose one to do that service for you (if you are not located in Arizona or would like an extra layer of privacy).

5. Register your LLC with the state of Arizona

Once you have a business name and registered agent, you can register your business as an Arizona LLC with the state of Arizona by filing your Articles of Organization. This document may be referred to informally as an LLC's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

6. Get an Employer Identification Number (EIN)

Arizona LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

Congratulations! After you have completed all these steps, you have formed your Arizona LLC.

What to do after forming an Arizona LLC

There are a few steps you need to take to maintain your Arizona LLC:

1. Create an Operating Agreement: while not mandatory, this is very advisable. We can help you create your Arizona LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Publish a Notice of Organization in a local newspaper: you must publish a notice of your LLC's organization within 60 days of forming in a local newspaper for three consecutive publications.
4. Maintain a local business location: it is a requirement to maintain its principal office in Arizona.
5. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.

An LLC is one of the easiest businesses to maintain. In the state of Arizona, there are no requirements for annual reports or other yearly maintenance.

What is needed to keep records for my Arizona LLC

The state of Arizona has no statutes requiring the recordkeeping of any specific documents pertaining to your LLC, but it may be helpful to keep documents regarding governance, management, taxes and other important affairs for your LLC.

Still have questions? Rocket Lawyer can help you with the process of forming an Arizona LLC. Get started today!
 

  

Key takeaways Registering an LLC in Arizona can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in Arizona if you do regular business there, like selling things or having employees. After starting your LLC, it’s advisable to create an Operating Agreement and hold a first meeting. You will also need to publish a Notice of Organization in a local newspaper, maintain an office in Arizona, and pay your taxes. Keep records of your Arizona LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report