Starting an LLC in Arizona: Everything You Need to Know
Starting an LLC in AZ is the process of creating a limited liability company, a type of business that provides its owners with personal liability protection.3 min read
Starting an LLC in Arizona is the process of creating a limited liability company, a type of business that provides its owners with personal liability protection and pass-through taxation in which profits and losses are reported on each owner's individual tax return. Small business owners can use this entity to protect their personal assets from seizure due to business debts and obligations.
An LLC can have one or more owners, known as members, and can be owned by individuals, other LLCs, foreign entities, and/or corporations. Arizona LLCs are formed through filing the necessary forms and meeting requirements set forth by the Arizona Corporate Commission.
Naming Your LLC
Before filing the paperwork to create your Arizona LLC, you'll need to come up with a unique name for your business venture. It must follow these state naming guidelines:
- Includes LLC, L.L.C., or Limited Liability Company
- Does not include the words corporation, associated, or incorporated or their abbreviations
- Does not contain restricted words such as university, attorney, or bank unless licensed individuals are involved and additional approval has been sought
- Does not contain words such as treasury, FBI, or secret service that could cause confusion between your LLC and a state or federal agency
When you've chosen a name, you can reserve it for up to 120 days for a $10 filing fee. Before doing so, however, search the online database maintained by the Corporation Commission or contact them directly to make sure the name you want is not already in use in Arizona. You should also make sure the URL for your preferred name is available and purchase the domain so that you can build a website for your business.
Choosing a Statutory Agent
Arizona LLCs must designate a statutory agent to send and receive legal paperwork on behalf of your business, including state filings and service of process. The statutory agent can be an Arizona resident or corporation registered to do business in the state. It can be an LLC member or a firm hired for this purpose. The statutory agent must have a street address in the state, not a PO box or other mailbox. He or she must be age 18 or older, be a full-time resident of Arizona, and have a permanent address. He or she must sign the Statutory Agent Acceptance form.
Filing Articles of Organization
To create your Arizona LLC, you'll need to submit articles of organization to the state's Corporate Commission along with a cover sheet, statutory agent acceptance form, filing fee, and an attachment detailing the LLC's member/management structure. The articles of organization requires you to complete your LLC name and business address, the name and address of your statutory agent, the lifespan of the business if not perpetual, whether your LLC will be managed by members or hired managers, and the name and signature of the member who is submitting the filing.
The filing fee for articles of organization is $50 with an extra $35 fee for expedited processing in five business days. Standard processing can take up to 30 business days. You can submit the forms online, mail them to 1300 W. Washington St., Phoenix AZ 85007, or fax them to 602-542-4100.
After submitting your forms, you'll receive an approval or rejection notice via postal mail or email. If your application is rejected, your LLC is still created but you must update the articles to conform to regulations as indicated within 20 days or the LLC will be terminated.
Publishing Notice of Formation
New LLCs must publish a notice of organization in an approved newspaper in their county for three consecutive weeks, except those located in Maricopa County or Pima County. When your LLC is approved, you'll receive information about publishing your notice and must comply within 60 days. Failure to do so may result in the dissolution of your LLC.
Creating an Operating Agreement
Although Arizona does not legally require new LLCs to create an operating agreement, multi-member LLCs should have this document in place to outline the business's operating and ownership procedures. The operating agreement is legally binding and governs member roles and responsibilities, management structure, voting rights, procedures for admitting and removing members, dissolution procedures, and procedures for amending the original operating agreement.
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