Arizona Domestic LLC: Everything You Need to Know
An Arizona Domestic LLC is a type of limited liability company recognized by the state of Arizona. The other type of LLC is the foreign LLC. 3 min read
What Is an Arizona Domestic LLC?
An Arizona Domestic LLC is a type of limited liability company recognized by the state of Arizona. The other type of LLC is the foreign LLC. Both function as LLCs in that they are pass-through entities that benefit from the limited liability corporations have. Domestic LLCs do business in the state it filed to become a LLC in. Most small LLCs that conduct only local business are domestic LLCs. If your LLC conducts business in other states, it is a foreign LLC.
Frequently Asked Questions
How are domestic LLCs taxed in Arizona?
Single member domestic LLCs are taxed as sole proprietorships unless it requests otherwise. This means that the owner pays taxes for the business on their personal tax filings. If the owners of an LLC opt to be taxed as a corporation, the business entity pays income tax. LLCs with high net earnings typically benefit in terms of lower taxes if taxed as a corporation.
Do other states recognize domestic LLCs?
Arizona is one of the few states that designate domestic versus foreign LLCs.
Does “foreign” in foreign LLC refer to a foreign country?
Currently, LLCs formed in foreign countries are not recognized in the United States. Foreign simply refers to the fact that your LLC operates in a different state than the one it is registered in. If you get sued in another state where you conduct business, you will be required to defend the lawsuit in that state if you did not register as a foreign LLC in your actual state.
How do you know if your LLC's business in another state makes it a foreign LLC instead of a domestic LLC?
If your LLC meets some of the following criteria, it is likely a foreign LLC.
- Has a business bank account in a different state.
- Sell products or services in a different state, including through an agent, representative, or distributor.
- Owns property in a different state.
- Holds meetings in a different state.
- Has business operations, such as a manufacturing plant or a retail store, in a different state.
Who is eligible to serve as a statutory agent?
Statutory agents for Arizona domestic LLCs can be:
- Arizona residents
- Domestic corporations or LLCs
- Foreign corporations with the correct authorizations
Steps to Become an Arizona Domestic LLC
1. Choose a unique name for your domestic LLC before you file any LLC documents with the state of Arizona.
- Confirm that your chosen LLC name is available by checking the Arizona Corporation Commission's online business name database.
- Your LLC's name must include one of the following: Limited Liability Company, LLC, L.L.C., L.C., or LC.
- If you want to reserve your LLC name without immediately filing your Articles of Organization, the name may be reserved for up to 120 days if you fill out the Arizona Corporation Commission's Application to Reserve Limited Liability Company Name.
2. Create an Articles of Organization document.
- Filing the Articles of Organization with the state is what officially creates your LLC.
- Your Articles of Organization must include:
- Name of LLC
- Address of LLC
- How long the LLC has existed
- Names of Members (and Managers, if applicable)
- Addresses of Members (and Managers, if applicable)
- Signature of registered agent
3. Register your domestic LLC with the state of Arizona.
4. Pay the filing fee to become a domestic LLC.
5. Publish your LLC's Articles of Organization in a local newspaper.
- You must publish your Articles of Organization within 60 days of getting approval for your Arizona domestic LLC from the Arizona Corporation Commission.
- The publication must be published three times consecutively.
- The list of acceptable newspapers is listed on the website maintained by the Arizona Corporation Commission.
6. Select a statutory agent for your Arizona domestic LLC.
- In other states, this is called a registered agent.
7. Draft an operating agreement to manage your LLC.
- Although not legally required by the State of Arizona, this critical document outlines how members interact with the LLC and how the organization runs.
8. Register for an EIN.
- Even if you create a single member LLC, you should have an EIN for conducting business with others. It is more secure than using a social security number.
- You need an EIN to open a bank account, hire employees, or engage in wholesale operations.
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