How to Form a Arizona LLC in 10 Steps
An LLC or Limited Liability Company is a normal business structure. Having an LLC means that one person or many people can own portions of your business. Each of your members will receive company profits made by your LLC. Unlike corporations, LLCs don’t file individual tax returns. One positive thing about LLCs is that they have a reduced risk for liability exposure for owners.
Forming a Limited Liability Company is a straightforward process, but there are several steps you'll want to follow.
1. Choose Your Company Name.
Your business needs to have a new name. It needs to be one that no other business can legally use. At SunDoc, we can also run your name search or reserve your LLC name for a fee. At the very least, your name needs to be free to use within the State of Arizona. You can use the USPTO website to check registered trademarks of your potential name.
2. Understand the LLC Organizer Requirement.
An organizer is the person or company that drafts your LLC. By preparing on-line with us, SunDoc Filings will be your organizer. If you choose to prepare and upload your filing with SunDoc, you can name your own organizer.
3. Designate a Registered Agent.
For your Articles of Organization, all LLCs must also have registered agents. This can be a firm or an individual. (See #6 for more information). Our article, Registered Agent Service can also explain more about the registered agent role.
4. Decide Your Ownership and Management Structure.
For your Articles of Organization, you will need to state how your LLC is going to be managed. That is, will you be managed by all members or will you have multiple managers or just one manager? You need to know whether you’ll be managed by members or managers.
5. Create an Operating Agreement.
In Arizona, you don’t need to have an Operating Agreement. In Arizona law, default conditions will signify the default Operating Agreement. Still, make sure this default agreement works best for your LLC.
For your company records, you will need an Operating Agreement if you plan on having a manager-managed LLC. That’s because the law in Arizona states that the only way for manager-managed LLCs to be valid in the eyes of the law is for them to be declared as such in both the Operating Agreement and the Articles of Organization.
Your Operating Agreement is important. It essentially drives your business.
The Operating Agreement also manages your business’ working capital, creates a governance, and manages the payments of profits. Essential issues voting, liability, money, and fiduciary constraints are taken care of with the Operating Agreement.
In some situations, it might be smart to speak with an attorney as well.
6. File the Articles of Organization.
You’ll need to have a document called the Articles of Organization as well. Arizona law requires that you file this document. It is one page and will include all of your business’ details. The moment that your company is really created is when the Secretary of State of Arizona accepts your Articles of Organization.
There are several things you’ll need to have on-hand before filing your Articles of Organization.
First, you’ll pay a filing fee. You will need the legal name of your company (not already taken by anyone else) too, and you’ll need a company address as well. You will also need your registered agent and LLC organizer names, and you’ll need to state your desired method of management. In Arizona, you don’t need to have a newspaper of record publication or filed member names.
Would you rather have a filing service handle all of this for you? If you’d like to save time and energy, We can file your Articles of Organization on your behalf at SunDoc.
7. Obtain an EIN and Open a Business Bank Account.
Congratulations! At this point, you have a registered LLC in the state of Arizona.
Now, you need an EIN. This stands for Employer Identification Number, and if you have more than a single member in your LLC, you have to file for an EIN with the IRS. It doesn’t matter whether or not you have employees. We are happy to file for you at SunDoc, or by yourself, you can file with the IRS.
Keep in mind that many banks will want you to have an Employer Identification Number too. This is so that they can open a business account for you.
Naturally, you’ll want to open up a business account as soon as you form your LLC. It’s wise to use a business account instead of your personal account. Either way, always keep all business-related receipts. This is also a good time to find a reputable attorney.
8. Pay Arizona State Taxes.
Every year (including the year your LLC begins), you will be required to pay an annual tax. This is what you must pay to conduct business in the State of Arizona; however, it is not an income tax. You will have to start collecting sales tax if you plan to sell goods in Arizona too. You can find more state tax information on the State of Arizona’s tax web site.
9. Determine Necessary Licenses and Permits.
Most Arizona companies are required to have one or more business licenses or permits to operate at the city or county level. Use Arizona's one-stop resource CalGOLD to find the requirements for your business. It’s important to check CalGOLD even if you think your business is exempt. You may be surprised to discover what’s required. Operating without the proper license or permit can result in expensive fines.
10. File an Annual Report.
LLCs in Arizona do not have an annual report filing requirement.
Important Notice: It is beyond the scope of this article to discuss your potential insurance needs, or matters relating to employees. You should consult an attorney or accountant with any questions about legal or financial matters. Please note that nothing in this article can be construed as legal, tax or accounting advice.
For additional learning, please visit Arizona LLC FAQs.
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