Do you think you are prepared to progress with your business opportunity? Setting up a Limited Liability Company (LLC) in Arizona is useful in putting up a robust business, safeguarding the owner’s assets, and maximizing tax savings.
In this article, we will discuss how to create an LLC for your company in Arizona, state-by-state. From coming up with the correct name to the brochure and application, we have you here.
Okay, let’s get started and be ready to form an LLC in Arizona.
What are the Benefits of an Arizona LLC?
LLCs are further favored by the general business setting in Arizona which serves to convince business persons to form LLCs. Here are some key advantages of forming an LLC in Arizona:
Protection of personal assets: As an LLC member, one’s personal belongings or assets will not be attached or charged in the event (if) there is a business debt and other liabilities.
Tax Options: The State of Arizona permits an LLC to adopt either a form of taxation as a corporation or as a pass-through entity like that of a sole proprietorship or partnership.
Weak Annual Compliance Requirements: There are also quite a few diamonds operational in the State of Arizona that LLCs will have to fulfill continuingly concerning annual compliance.
Qualifications for Foreign Qualification: However, if you are not in Arizona and would like to make some transactions in the state then foreign qualification will be necessary for your LLC.
Step 1: Name Your LLC
Your business identity rests upon the correct selection of a name for your LLC. That is the most important stage to do.
Requirements:
Distinct Name: The name of your LLC cannot be identical or similar to that of other entities registered in Arizona. This aids in preventing conflict with other business owners.
Inclusion of “LLC”: The name shall bear the words “Limited Liability Company”, “LLC” or “L.L.C.” per the legal requirement of indicating the nature of the business.
Avoid Restricted Words: Some phrases like ‘bank’, ‘insurance’, or ‘university’ may be prohibited and may need approval from relevant authorities after submitting the required documents.
How to Check:
Search the Arizona Corporation Commission’s (ACC) database to see whether the desired LLC name is available or not. This facility aids you in ensuring that the name you propose is unique and conforms with the state laws.
Step 2: Appoint a Registered Agent
A Statutory Agent is also called a Registered Agent and is an essential requirement for your LLC. This person or entity is permitted to receive legal paperwork concerning your LLC and is hence responsible for handling those important documents.
Requirements:
- He/she must be residing in Arizona and have a physical non-po box, and street address This is to make sure that there is a place where papers can be served where there is certainty.
- Documents must be received at the registered office during normal business hours to ensure that any legal documents will be served and processed appropriately
This can be achieved by utilizing External Commercial Registered Agent services to ensure adherence to these needs and to allow for ease of management of this responsibility.
Step 3: File the Articles of Organization.
You will need to file the articles of organization with the Arizona Corporation Commission (ACC) as this is necessary to officially register your LLC. This stage also assists in providing concrete registration of the business entity and is very essential in the process.
Required Details:
- LLC Name: As mentioned in Step 1.
- Statutory Agent’s Name and Address: As appointed in Step 2.
- Management Structure: Specify if the LLC is a member-managed entity or manager-managed entity in determining who among the members will have control in the running of the business.
- Duration: Indicate if the LLC will continue to operate unless stated otherwise.
Filing Options:
- Online Submission through ACC eCorp portal. This is the preferred method for the majority of people as it is fast and very easy.
- By submission of the dug form to the ACC. This is for those who do not like online submissions.
Filing Fee:
- The normal filing fee is fifty, which is the processing fee for the application that has been submitted.
- Customers who wish to pay an extra $35 have an option for faster processing or ‘Expedited Processing’.
Step 4: Draft an Operating Agreement
Although not compulsory under Arizona law, drafting an Operating Agreement is worthwhile. The Operating Agreement is a document defining how the LLC will be governed and its activities carried out to avoid ambiguity and conflicts arising.
Key Understanding:
- Member Contributions: State what each member contributed to their LLC, i.e. money, property, or services.
- Profit and Loss Distribution: Provide the basis for sharing profit and loss among the members.
- Management Responsibilities: State what each member or manager stands responsible for, possibly including the rights and obligations of each.
- Voting Rights: Explain how voting will be done on matters that concern the business undertakings of the members.
- Procedures for Adding or Removing Members: Explain the process of changing the membership composition in the LLC.
An Operating Agreement serves to avoid future friction and safeguard the business operation affording legible limits within which operations will be conducted.
Step 5: Order an EIN
An EIN is mandatory for tax identification and for facilitating the opening of a business checking account. This will be the number utilized for all tax matters as well as for financial transactions.
Application Process:
- Over the Internet using the IRS website where an application for EIN is made instantly and an EIN is also received instantly.
- Mail filing IRS Form SS-4 as an Application for Employer Identification Number is a process that takes approximately 4 weeks for people who prefer or need to use regular mail applications.
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Step 6: Publish a Notice of LLC Formation
In Arizona, all new LLCs are required to issue for some time Notice of LLC Formation in the newspaper within the locality where the LLC’s statutory agent is situated. This requirement helps keep the community informed about new businesses.
Publication Requirements:
- It should be published for a minimum of three consecutive weeks in a designated legal newspaper to ensure proper public notice.
- Such notice has to be done within sixty (60) days after the filing of the Articles of Organization to comply with the Articles of Corporation and the law of the state.
Affidavit of Publication:
- After the required publication is done the newspaper publishes an ‘affidavit’ that is known as an affidavit of publication in which every entity must keep it in their records as evidence of fulfillment.
Step 7: Comply with Tax and Regulatory Requirements
Checking the liabilities of all tax and any other regulatory compliance is an essential aspect of the smooth running of your LLC.
State taxes:
- Make Additional state tax registration under the Arizona Department of Revenue if applicable to not hammer taxes were the rules against.
- Join the Arizona Department of Revenue for state tax registration purposes. Depending on the nature of your business you may be required to register for sales tax (transactional privilege tax) or other related tax depending on your business model and activities.
Business licenses and permits:
- Seek Information for Additional Permits: The additional permits will be checked with the relevant county residing authorities to confirm whether any further brigades are obligatory for your LLC and all the city’s laws are being observed.
Conclusion
Creating an LLC in Arizona entails meeting several requirements, including selecting a catchy name, putting accounts in order, and availing publications. If you follow this detailed guide, your LLC will be created properly and you will avoid future challenges.
Are you all set? If you want to avail your LLC formation-related custom assistance, you may seek helpful guidance from a business lawyer, or another specialist. Their knowledge will make the task easier and eliminate your worries. All the best in your new business!
Nabin Adhikari
