Arizona Business Registration: Everything You Need to Know
Arizona business registration is the process you must go through to set up a company in the state, such as selecting your business type and business name.3 min read updated on February 01, 2023
Arizona business registration is the process you must go through to set up a company in the state, including deciding what type of business you want to run and selecting a name. To offer your products or services legally, you may also need to apply for a variety of business licenses from several agencies.
Naming Your Business
One of the first decisions you need to make is whether to operate under your own name or create a business name. If you choose to register a trade name, you pay a fee of $10 every five years.
Corporations and LLCs in Arizona are not allowed to have the same name, so your options may be restricted. It's therefore a good idea to check with the Arizona Secretary of State to see if the name you're planning to use is already registered.
Choosing Between a Corporation and an LLC
If you decide to establish a corporation, you'll be creating an independent legal entity. Although it can be more expensive to set up a corporation, one of its main benefits is that your personal assets are protected in the event of the corporation being sued.
You'll have to do the following to establish a corporation in Arizona:
- Pay a $60 fee to set up the corporation
- Print the corporation's articles of organization for three weeks in a row in a local newspaper
When the corporation is up and running, you'll also need to appoint a board of directors, take minutes, and organize meetings for shareholders.
An LLC requires less organization. In addition, you can choose whether to have the LLC taxed like a sole proprietor or a corporation. To set up an LLC in Arizona, you must:
- Pay a $50 fee to form the LLC
- File the articles of Organization with the Arizona Corporation Commission
- Print the articles of organization in a newspaper in the county where you'll be doing business
To make the most of your company, writing a business plan is essential. While plans are often written in order to attract investors or secure loans, they can also help you to begin putting your business idea into practice.
How you structure your business plan is up to you, but here are some sections you should include:
- An executive summary providing a brief overview of your business plan
- A section on what products or services your company will offer to customers, and what your goals are
- A profile of your management team and staffing needs, including employee costs
- A marketing plan to attract new customers to your business
- A financial projection, including sales estimates, start-up expenses, and balance sheets
Licenses and Regulations
Many businesses need to apply for an employer identification number (EIN). This number identifies your company for tax purposes and allows you to open a bank account. If you've chosen to set up a sole proprietorship or LLC with you as the lone member of staff, you can use your Social Security Number instead.
In addition, there's a good chance you'll have to register for State of Arizona Transaction Privilege Tax (TPT) when you're setting up a business in Arizona. The TPT is calculated based on the sales of your business.
Financing Your Business
Securing financing for your new business may prove to be one of your toughest tasks. If you're looking to get a start-up loan from a bank, it's likely their decision will be influenced most by your personal credit. You have several other possibilities, including:
- A small Business Administration loan guarantee to help you get a bank loan
- Small business grants from the government
- Peer-to-peer lending, which involves you taking out a personal loan
Registering a Foreign LLC
If your LLC was set up according to regulations in another state, it will be known as a foreign LLC in Arizona. However, you still need to register it with the state if you're conducting business in Arizona.
If your LLC is physically present in Arizona, it can be compelled to collect sales taxes on transactions with Arizona residents. The term physical presence is usually taken to mean that you have either a warehouse, store, salesperson, or office in Arizona.
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