Startup Guide to Filing an Arizona LLC

Want to launch your business as a limited liability company (LLC)? Arizona, with its business-friendly climate and scenic state parks, could be the right place. In fact, The Motley Fool rated the Grand Canyon State among the top 10 states to start your small business in 2021.

To create an LLC in Arizona, you’ll need to follow certain steps. And, if you want to take advantage of the liability protection and tax benefits of an LLC while avoiding delays and costly fines, you’ll need to follow those steps carefully.

Trying to follow all the rules for creating an LLC in Arizona can be trickier than dodging wildlife on the Beeline Highway. But don’t sweat. This guide can help you with setting up an LLC in Arizona.

How to Start an LLC in Arizona

To form your LLC, you must register your business in Arizona with the Arizona Corporation Commission (ACC). This process enters your new company into the public record. It provides the information necessary for the state to communicate with and regulate your new limited liability company.

You’ll also need to choose a statutory agent. Your Arizona statutory agent receives legal notices and official correspondence from the state.

After you file the required paperwork, you’ll still have some other boxes to check. For example, you’ll likely want to draft an operating agreement and register your company with the IRS. The state also requires you to publish notice of your LLC in Arizona in an approved newspaper.

AZ LLC in 7 Steps

Below, we’ll show you how to start an LLC in Arizona with seven key steps:

1. Name your LLC
2. Appoint an Arizona Statutory Agent
3. File Articles of Organization
4. Create an operating agreement
5. Apply for an EIN
6. Meet the publication requirement in Arizona
7. File the Arizona beneficial ownership information report

We’ll also include some other helpful information to set up your LLC for success. Along the way, we’ll also show you how our services can further cut through the red tape so you can get to the more enjoyable parts of running your new business.

Note that these guidelines are for starting a domestic LLC, which is one started within the state you’re residing in. A foreign LLC is one that originated in a different state. To register a foreign LLC in Arizona, you would complete a registration statement for a foreign LLC and follow a different process.

Step 1: Name your AZ LLC

The first step is to name your limited liability company. This can be the most fun step, but picking the perfect business name is more than just branding. Without a unique name, the ACC won’t let you register your business.

You’ll need to decide what to call your company before forming your LLC and submitting the necessary paperwork. Otherwise, you might have to start over. Come up with several name options in case your first choice isn’t available.

Official Naming Requirements for Arizona LLCs

You’ll have to follow Arizona’s requirements (A.R.S. § 29-3112) for LLC names:

• Your LLC’s official name must be unique in the state of Arizona. If a business is already using the name you prefer, you’ll need to go with another option. Name search engines aren’t perfect, so we recommend also calling the ACC at (602) 542-3230 to double-check your name’s availability.

• Your LLC name can’t contain the words “association,” “corporation,” “incorporated,” or an abbreviation of those words. Certain other words, such as “bank,” “credit union,” and “trust,” require prior approval.
• Your Arizona LLC name must end with some form of the phrase “LLC.” Your options are “limited liability company,” “limited company,” or one of the following abbreviations in uppercase or lowercase letters: “L.L.C.,” “LLC,” “L.C.,” or “LC.”

Reserving a Business Name in Arizona

Once you select a name, consider reserving it so that nobody else can take it before you form your business. To do this, you can use our name reservation service, which will save your chosen limited liability company name for 120 days.

Within that window, you should have enough time to file your Articles of Organization and form your LLC.

Get a domain name for your business

A strong online presence begins with a good domain name. When selecting your LLC’s name, consider its web domain availability to ensure your business is easily found and remembered online. Use our domain name search tool to find an available URL that aligns with your LLC’s name. Also, check if corresponding social media handles are available, as this aids in cohesive branding across platforms. Our service can assist in securing your domain name and setting up domain privacy for your business’s website.

Trademarking Your Arizona LLC’s Name

Even if the ACC shows that your business name is available in the state database, that doesn’t necessarily mean you’re clear to use it. Business names can be trademarked on both the federal and state levels.

For federal trademarks, check the search engine on the U.S. Patent and Trademark Office website to see if someone’s already trademarked your desired name.

For Arizona trademarks, you can search the Arizona Secretary of State website page for trademarks. If your desired name is untrademarked, you can consider applying for a trademark of your own.

Filing for a DBA in Arizona

If you plan to do business under a name different from your LLC’s legal name, you’ll need a DBA or “doing business as” name in Arizona. DBAs also need to be registered via the Secretary of State’s website.

Businesses sometimes use a DBA, known as a “trade name” in Arizona, if they want to open a store under a different name or launch a new product line without starting another business.

Step 2: Appoint an Arizona statutory agent

Every Arizona LLC must appoint a statutory agent, known in some states as a “registered agent.” This agent serves as your LLC’s official point of contact with the government, responsible for receiving legal and official notices in person. The agent should be available during business hours at a physical address in Arizona (not a P.O. box) to receive these notices and relay them to your LLC’s leadership. Note that this address doesn’t have to be the same as your LLC’s principal office.

Who can be a statutory agent in Arizona?

An Arizona statutory agent can be an individual residing in Arizona or a business entity authorized in Arizona with a physical location in the state. The appointed agent must officially accept this role in writing via a Statutory Agent Acceptance form, submitted with your LLC’s Articles of Organization.

Consider using a statutory agent service for your AZ LLC

Using statutory or registered agent services like ours allows you to avoid the scenarios above and helps ensure you’re in compliance with the law. Plus, using a statutory agent service means that you won’t have to change your agent’s address with the state if your place of business relocates to another part of Arizona.

Arizona LLC owners get an added benefit from our statutory agent service: All but two counties in Arizona require you to meet a publication requirement when forming your LLC (more on that below). When you use our service, our Arizona office is located in one of the two counties that don’t require publication, meaning you avoid the hassle and costs of the state’s publishing requirement.

Step 3: File Arizona Articles of Organization

File your Articles of Organization with the Arizona Corporation Commission. Once approved, this step officially creates your Arizona LLC.

Filing government documents like this can be intimidating, which is why our service exists. With our business formation plans, we handle the filing for you to make sure it’s done quickly and correctly the first time. But, although we can do this for you, we’ll show you how the process works below.

Articles of Organization Filing Options

By Mail or In-Person

You can submit the Articles of Organization to the Arizona Secretary of State’s office. The mailing and physical address for filing is:

Secretary of State, Business Services Division
1700 W Washington St Fl 7
Phoenix, AZ 85007-2808

Ensure you include the required filing fee with your submission. Checks should be made payable to the Arizona Secretary of State.

Online Filing through eCorp

For a more convenient and faster filing process, consider using the eCorp system offered by the Arizona Corporation Commission.

Creating an eCorp Account for Online Filing

To file your Arizona Articles of Organization online, you’ll need to create an eCorp account on the Arizona Corporation Commission website and pay a $50 fee. Visit the Arizona Corporation Commission’s eCorp portal at eCorp.azcc.gov.

How fast can I form my Arizona LLC? 

If you file online, you can expect your LLC paperwork to be processed in approximately 2 – 3 weeks; filing by postal mail will take considerably longer because of the time in transit. However, Arizona has options for expediting your LLC formation:

Expedite: For an additional $35, you can have your paperwork processed in three to five business days.

Next day: For an additional $100, you can have your filing reviewed by the close of business the following day.

Same day: For an additional $200, your documents will be processed on the same day, provided they’re received by 10 a.m.

Two-hour: For an additional $400, your filing can be reviewed within two hours of receipt, providing it’s received by 3 p.m.

Information Needed for Arizona Articles of Organization

Have the following information handy before you complete your Articles of Organization:

• Your Arizona LLC’s name
• Your statutory agent’s name and address. A separate agent Acceptance form (M002) must be signed and submitted along with these Articles of Organization.
• Whether your LLC will be a professional LLC (for lawyers, medical professionals, and other professional services)
• The mailing address for your business (this can be different from the registered address)
• An election as to whether your LLC will be member-managed or manager-managed. A member-managed LLC is governed by the owners of the LLC, who are called “members”; a manager-managed LLC is managed by a manager who is appointed or hired by the owners.
• The signature of the LLC’s organizer

Member-Managed or Manager-Managed?

Like many states, Arizona asks you to decide how you plan to govern your LLC, by the members/owners (member-managed) or by a manager (manager-managed).

Most LLCs choose to be managed by the members because they only have a few owners or just one. In those cases, it usually makes sense for the LLC owner(s) to do member-management because they’re running the business themselves. All of the owners are sharing in running the business and making decisions for it.

But some LLCs prefer to appoint or hire a manager instead. In the manager-managed option, one or more LLC members can be appointed to make management decisions, or someone from outside the LLC can be hired to manage the company.

Manager-management can be helpful when some of the members only wish to be investors in the company as opposed to running the business and making decisions about it. LLCs with many members also sometimes find it easier to have a manager because it’s difficult to get all the members together to make decisions.

You only need to file your Articles of Organization once. However, if you end up making any changes down the road — such as replacing your statutory agent or switching your management type — you’ll need to file Arizona Articles of Amendment with the ACC along with a fee.

If you do need to file an amendment, we have an amendment filing service that can handle it for you as well as our Worry-Free Compliance service, which includes two amendment filings every year.

Why would I delay my Arizona LLC filing date?

Some entrepreneurs, especially if it’s near the end of the calendar year, will delay their LLC filing date to January 1 of the coming year. This way, they can avoid the hassle and cost of having to pay taxes on an LLC in the current year. This is especially true if the future LLC owners don’t need to establish the company right away.

Ordinarily, if the Arizona Corporation Commission approves your filing, the filing effective date will be the date you submitted it. This is true even if it takes longer than that for the state to examine it and mark it as filed. In other words, if you submit your filing on July 1, but the state doesn’t approve it until July 30, your LLC effective date would still be July 1.

But you also have the option to tell the state that you want your effective date to be at a later time. You can choose to have your LLC’s effective date be up to 90 days past the date you submit the filing.

This is something else we can help you with. When you form your LLC in Arizona with us, we give you the option of paying an extra fee to have your LLC’s effective date delayed. (This service is only offered from October to January.)

Professional LLCs

When completing the Articles of Organization, you’ll be asked whether you’re forming a professional LLC (PLLC) in Arizona. Arizona law says that those in certain licensed professions (think doctors, lawyers, architects, engineers, etc.) who want to offer their services under an LLC structure may do so only as a professional LLC.

If you’re in such a profession, check with the agency or board that licenses your profession to see if it requires you to form a PLLC. Note that we at ZenBusiness don’t handle PLLC formations at this time.

Step 4: Create an Arizona operating agreement

Next, create your Arizona operating agreement to spell out how your LLC will be organized and operated. Though this isn’t a legal requirement, it provides many benefits and helps you avoid future hassles.

An operating agreement (OA) clearly defines the terms of ownership and management for an LLC.  And, without one, you’ll be subject to Arizona’s default rules for LLCs, which might not reflect the wants of yourself and the other members.

Benefits of AZ LLC Operating Agreements

Here are some of the benefits an OA offers to owners of an LLC:

• Agreements help prevent and resolve conflicts between LLC members by clearly indicating the powers and privileges of each member.
• Creating an OA empowers you to customize your business’s rules and procedures to serve your LLC’s interests, requirements, and expectations.
• An agreement can define your LLC’s management structure. While some companies choose to be member-managed, others designate a manager to run day-to-day operations.
• An OA helps separate your business from your personal assets in the courts’ eyes, further sheltering your savings from legal liability.
• A well-drafted agreement specifies the rules and procedures to guide the LLC if you want to add or remove members from the business.
• It creates a plan of succession for when a member passes away, which is useful even for single-member LLCs. The agreement can stipulate what happens to that member’s portion of the business.

What should I include in my LLC operating agreement?

Here are some basic items you may want to include in your LLC’s OA:

• Ownership allocation: While many LLCs split ownership evenly among the members, Arizona law permits business owners to allocate ownership and profits however they wish. For example, if you have a multi-member LLC, you could decide that one member has 60% ownership, while the other two members each have 20%.
• Management regime: In Arizona, you can choose to have your LLC managed by its members or a manager — you’ll have to specify in your Articles of Organization.
• Authority to act on behalf of the business: Who can take action on the business’s behalf? Who can sign checks for the LLC? Who’s in charge of negotiating major agreements? What percentage vote is required for routine and major decisions? Your agreement should clearly outline each individual’s responsibilities and authorizations.
• Admitting new owners: If your business is successful, you might invite new individuals or businesses to join your LLC as business partners. If you want to admit new members into your LLC, your agreement should specify the requirements and processes to join the membership. You’ll also want to lay out the procedure for removing members, buying out their interest, and repaying them for any remaining debt.
• Dissolution and winding up: At some point, you may want to close your business and move on to something new. Your OA can make this easier by including provisions for dissolving and winding up the LLC. Common issues upon dissolving a business include selling the business’s assets, paying off debt, and distributing remaining profits among the existing members. You’ll also need to file Articles of Dissolution with the Arizona Corporation Commission.

Unsure as to how to start creating an OA for your LLC? We offer a customizable template to help get you started.

Do I need an operating agreement if I’m the only owner?

Because it seems like most of the things in your OA are geared toward avoiding disputes among the LLC members, you might think you don’t need one for a single-member LLC. But potential investors, future business partners, and others may want to see your OA.

Some banks won’t let you open a business bank account without one. Your OA can also spell out what you want to happen to the business if you die or become incapacitated.

Further, occasionally someone will take an LLC owner to court to try to prove that the owner and the LLC are the same entity so that they can go after the owner’s personal assets. If that happens, having an OA in place is one more thing to further demonstrate to the court that the owner and the LLC truly are separate.

Step 5: Apply for an EIN

Register your LLC with the federal government by getting an Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number, from the Internal Revenue Service (IRS).

An IRS Employer Identification Number is like a Social Security number for your business, allowing your business to hire employees, apply for a business bank account, and pay taxes. Most LLCs are required to have an EIN, especially those with multiple members or employees.

Sometimes a single-member LLC with no employees or excise tax liabilities can forego having an EIN and use the owner’s Social Security number instead. But even these LLCs will likely need an EIN to open a business bank account.

You can get your LLC’s EIN through the IRS website, by mail, or by fax, but if you’re not fond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.

Step 6: Meet the Arizona LLC publication requirement

You must meet Arizona’s publication requirement for LLCs. New LLCs must publish a notice of LLC formation in one of Arizona’s approved newspapers in three consecutive publications, starting within 60 days of receiving notice from the Arizona Corporation Commission.

The notice must include the following information:

• LLC name and address
• Name and address of your LLC’s statutory agent
• Whether your LLC is member-managed or manager-managed
• Names and addresses of managers or members, depending on the management structure

After the three consecutive publications, the newspaper will send you and the ACC an Affidavit of Publication, proving that your LLC has met the requirement. At this point, you’re all finished. Just make sure to keep the affidavit for your records.

Forming an LLC in Maricopa or Pima Counties

If you’re forming an LLC in either Maricopa or Pima counties, things are easier: You don’t need to meet the publication requirement if you live in either of those counties. Instead, the Arizona Corporation Commission posts notice of your LLC formation on the ACC’s Public Notice Database.

This is free, so you also save money on publication costs. If you choose to use our statutory/registered agent service, our Arizona office is located in Pima County, meaning you avoid the requirement and the associated fees altogether.

Step 7: File the beneficial ownership information report

Beginning in 2024, LLCs (and some other small businesses) have a new filing requirement at the federal level: the beneficial ownership information report, or BOI report. This report was introduced by the Corporate Transparency Act, which aims to prevent companies from hiding illicit financial activities with shell corporations. That’s because a BOI provides information about a company’s beneficial owners. 

A beneficial owner of a company is anyone who exerts substantial control over the business, holds 25% or more of the ownership interest, or receives significant economic benefit from the business. When you file a BOI report with the Financial Crimes Enforcement Network (FinCEN), you’ll provide the name, address, and identifying information for each beneficial owner. 

Arizona doesn’t have a state version of the BOI, so you’ll only file with FinCEN. You can file online for free by submitting the online form or uploading a PDF. If you form your LLC in 2024, you’ll need to submit the BOI within 90 days of getting your Articles of Organization approved by the Arizona Corporations Commission. LLCs formed prior to January 1, 2024, must file by January 1, 2025. All LLCs formed in 2025 and beyond will need to file within 30 days of approval. 
For more info, please see FinCEN’s website. Our BOI report filing service can easily tackle this step for you.

Next Steps After Forming Your LLC

1. Register for Arizona Business Taxes

Before you conduct business activity that’s taxable in Arizona, you’re required to register with the Arizona Department of Revenue for transaction privilege tax (TPT) and withholding purposes.

The Arizona TPT is a tax on a vendor for the privilege of doing business in the state. A TPT license, also known as a sales tax, resale, wholesale, vendor, or tax license, is required for any business that sells a product or service in Arizona that’s subject to the TPT.

Taxes For Employers

If you hire employees, you’ll need to register for payroll taxes, pay unemployment tax, and provide workers’ compensation insurance for your employees.

In addition to federal unemployment tax, in Arizona you’ll need to apply for an Unemployment Insurance Tax Account Number. You do this by registering with the Arizona Department of Economic Security (DES) and the Arizona Department of Revenue (ADOR). You register with both agencies simultaneously by completing an Arizona Joint Tax Application (form JT-1/UC-001) and submitting it to the License and Registration Section of ADOR. The DES will determine whether or not you’re liable for paying Arizona Unemployment Insurance taxes.

You’re also required to report the new hires to Arizona’s New Hire Reporting Center.

2. Open a business bank account with your EIN

Once you’ve secured an EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is critical for sorting out your finances at tax time and helps you avoid commingling funds.

Commingling funds makes your taxes more difficult and could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities (that is, they want to sue you not just for your business assets, but also your individual assets).

Manage your AZ LLC’s finances and payments

We offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.

For further help managing your new business’s finances, try ZenBusiness Money. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.

3. Consider LLC Taxation Options

Default Taxation: By default, single-member LLCs are taxed as sole proprietorships, and multi-member LLCs as partnerships. This structure is favored for avoiding double taxation.

Considering S Corp Status: Electing to be taxed as an S Corporation can potentially reduce self-employment taxes. This structure allows you to split your income between salary and business profits. However, be mindful of the closer scrutiny and specific qualifications associated with S Corps.

C Corporation Taxation: Electing C Corp status involves double taxation but offers a wider range of tax deductions.

Due to the complexity of tax laws, consulting with a tax professional is advisable to choose the best structure for your LLC.

4. Annual Reporting

Unlike most states, Arizona doesn’t require LLCs to file an annual or biennial report. Consequently, there’s also no annual report fee.

Arizona-Specific Tax Credits and Incentives for LLCs

In Arizona, LLCs can take advantage of a variety of tax credits and incentives, each designed to encourage business growth in specific areas:

• Quality Jobs Tax Credit: Rewards businesses for creating qualifying jobs with specific wage and insurance requirements.
• Research & Development Tax Credit: Encourages innovation by providing benefits for LLCs engaged in research and development activities.
• Renewable Energy Tax Incentive: Promotes sustainable practices by incentivizing investments in renewable energy.
• Angel Investment Tax Credit: Offers benefits for investments made in small business entities.

To leverage these incentives, it’s important to evaluate which ones align with your LLC’s operations and growth plans. Compliance with each program’s requirements is crucial, and consulting with a tax professional can help you understand the application process and maximize the benefits. Strategically using these tax credits can lead to significant savings and should be considered a part of your business’s growth strategy. Reinvesting these savings into your business can further fuel expansion and innovation.

For more detailed information on these incentives, the Arizona Commerce Authority provides resources on the Quality Jobs Tax Credit, Research & Development Tax Credit, Renewable Energy Tax Incentive, and the Angel Investment Tax Credit. These resources offer in-depth knowledge about each incentive, including eligibility criteria and the application process, aiding LLC owners in navigating Arizona’s tax incentive landscape.

Alternative Business Structures in Arizona

LLCs aren’t the only business structure available to you in Arizona. Here are some others:

Sole proprietorship: This is a simple business structure composed of only one person; it requires no registration with the state. The problem with sole proprietorships is that they offer no liability protection for your personal assets. If someone sues the business, they can go after your personal savings, home, car, etc.

General partnership: A general partnership operates like a sole proprietorship, but it has multiple owners. Like a sole proprietorship, it offers no personal liability protection.

Corporation: Like an LLC, this structure exists apart from its owners. It offers the strongest liability protection. However, corporations are subject to “double taxation,” in which profits are taxed twice, once at the corporate level and again when they’re distributed to the individual shareholders as dividends. Corporations also have more formalities and red tape than other business structures.

Limited partnership (LP): An LP is a type of partnership where there is at least one general partner who operates the business but has unlimited liability for any business debts; the limited partners only have liability up to the amount they’ve invested in the business.

Limited liability partnership (LLP): An LLP is similar to an LP, except that all of the partners have limited liability. In an LLP, partners also have liability protection from the errors of other partners. Unlike LLCs, LLPs require that management duties be equally divided among the partners.