LLCs in Arizona are affordable and easy to form. As with other states, the State of Arizona has some unique LLC requirements.
Interested parties must register with the Arizona Corporate Commission by filing the necessary forms, paying the necessary fees and meeting all naming and formation requirements.
The specifications required of LLCs in Arizona are:
Registering Your LLC
LLCs are required to file Articles of Organization with the Arizona Corporate Commission and submit with it a cover sheet, member/manager-structure attachment, Statutory Agent Acceptance form and the necessary filing fee. The Articles of Organization must include the following information:
- LLC’s name
- Registered agent’s/statutory agent’s name, address and completed acceptance form, M002
- Business address
- Indicate type of management, such as manager-managed or member-managed
- Organizer’s name, address and signature
All forms must be submitted with the necessary filing fee. Upon approval by the Corporate Commission, a letter will be sent to the statutory agent containing instructions regarding the publication of the notice of LLC formation. Publication of the notice upon approval is required.
Forms and Fees
LLC registrants are required to complete and submit Articles of Organization, to the Corporate Commission. There is a $50 filing fee that must be paid upon submission of the documents. Fees can change, check with the Arizona Corporate Commission for the most recent requirements.
Timeline for Registration
Unfortunately, in Arizona, there is no next-day or same-day processing. The usual processing time for documents is between six to nine working days. If you opt to avail of the expedited services, for an additional fee, the processing time is reduced to three to five working days.
LLC naming requirements can be confusing. However, the easiest way to make sure that your LLC name will be approved is to make sure that it is distinguishable from other LLCs and includes specific words required of LLCs. You may opt to have a preferred name checked for availability before filing your LLC formation documents.
To form an LLC, a registrant must first file their Articles of Organization with the Corporate Commission. All submissions must be accompanied by a $50 filing fee and the other required documents: cover sheet, member/manager-structure attachment and the Statutory Agent Acceptance form. Fees can change, check with the Arizona Corporate Commission for the most recent requirements.
Next, an LLC with more than one member is strongly advised to have a limited liability operating agreement among its members. This operating agreement contains the terms entered into by the members of the LLC and governs such critical items as the roles of each member, voting rights, who manages the LLC, how members are admitted or removed, dissolution of the LLC and procedures for amending the LLC operating agreement itself.
Please note that LLCs offering a specific professional service are obligated to contact the necessary licensing boards as mandated by state law.
Starting an LLC in Arizona
Before deciding to form an LLC in Arizona, you must understand what an LLC is and if it is a viable business structure for your company. To begin, an LLC is a business structure that has flexible organization, is privy to tax efficiencies, and provides limited liability for its members. Members may include individuals, corporations, other LLCs and foreign entities. One benefit of an LLC is that there is no maximum number of members. An LLC is also known as a ”hybrid” business structure in the sense that it brings together elements of a corporation and limited liability partnerships.
Here are some tips to help you put together what you need to begin the registration process:
1. Decide on a name for your business. You can choose any name as long as it ends with “Limited Liability Company” or any variant of its abbreviations—e.g., L.L.C. or LLC.
Names may be reserved for up to 120 days. You may file a name reservation application, which must be accompanied by the $10 filing fee, with the Corporate Commission online or by mail. Be sure to include in the application the name to be reserved, entity type, applicant’s name and address and the applicant’s dated signature. Prior to filing a name reservation application, you may have the preferred name checked for availability, either by searching the Corporation Commission online database or by contacting the Corporation Commission directly.
2. Assign an agent for service of process (also referred to as the resident agent). Registered agents, sometimes called a statutory agent in Arizona, are individuals or corporations authorized to do business in the state and which have permanent addresses in Arizona. Registered agents accept legal documents on behalf of the LLC and make sure its members are notified.
3. Get an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
4. Create an operating agreement. Although LLCs in Arizona are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Arizona recognizes limited liability company operating agreements as governing documents.
5. Familiarize yourself with the LLC’s continuing legal obligations. These continuing legal obligations vary with each state.
Filing an LLC and Fees
Following are the forms and fees that are required when starting an LLC in Arizona:
1. Forms. Those looking to form an LLC in Arizona will have to file their Articles of Organization with the Corporate Commission. The Articles of Organization must be submitted with the required filing fee and other required documents.
2. Fees. The filing fee for Articles of Organization is $50. Fees can change, check with the Arizona Corporate Commission for the most recent requirements.
3. Limited liability company operating agreement. Although the LLC operating agreement is not filed with the Corporate Commission, it is a good idea to have one in place for LLCs with more than one member. This should be kept on file by the registered agent.
4. Taxes. LLCs in Arizona are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your LLC, the tax responsibilities are as follows:
a) An LLC treated as a limited liability partnership. These LLCs are required to file Form 1065, U.S. Return of Partnership Income, and to show equal distribution of profits, losses and credit on a Schedule K-1 with the IRS.
b) An LLC treated as a C corporation for federal tax purposes. These LLCs are required to file Form 8832, Entity Classification Election, and must opt to be taxed as a corporation. Next, they must file Form 1120, U.S. Corporation Income Tax Return, with the IRS.
c) An LLC treated as an S corporation. These LLCs are required to file Form 1120S, U.S. Corporation Income Tax Return, accompanied by a report from each owner expressing the equal distribution of profits, losses and credit with the IRS.
d) An LLC treated as a sole proprietorship. These LLCs must report all business income and expenses via the sole proprietor’s personal income tax returns, Schedule C (Form 1040), Profit or Loss from Business, with the IRS.
You should always make sure to acquaint yourself with the state laws regarding taxation. Your LLC may be subject to other taxes depending on the kind of services your LLC may offer.