A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Arizona. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Arizona law, an LLC’s name must contain the words “Limited Liability Company” or the abbreviations “LLC,” “L.L.C,” “L.C.,” or “LC.” A professional LLC’s name must contain the words “professional limited liability company” or the abbreviations “P.L.L.C.,” “P.L.C.,” “PLLC,” or “PLC.” Your LLC’s name must be distinguishable from the names of other business entities already on file with the Arizona Corporations Commission. Names may be checked for availability by searching the Arizona Corporation Commission business name database.
An available name may be reserved for 120 days by filing an Application to Reserve Limited Liability Company Name with the Arizona Corporation Commission (available on the Corporation Commission website). The form may be completed and filed online or by postal mail. The filing fee is $10 if done by mail or $45 if performed online ($10 filing fee plus $35 expedite fee).
Every Arizona SMLLC must have a statutory agent (most other states call this a registered agent). A statutory agent is an individual or business entity that agrees to accept legal papers on behalf of the SMLLC. The statutory agent can be: (a) an individual who is a permanent, full-time Arizona resident, (b) a domestic corporation or an LLC, or (c) a foreign corporation or an LLC authorized to do business in Arizona. The statutory agent must have a physical street address in Arizona. The statutory agent must accept the appointment in writing, which is done by completing and submitting the Statutory Agent Acceptance form with the Articles of Organization.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
An Arizona LLC is created by filing Articles of Organization with the Arizona Corporation Commission.
The articles must include:
The articles may be completed and filed online. Alternatively, you can obtain a copy of the Articles of Organization form on the Arizona Corporation Commission website and file it by postal mail. Be sure to submit the Statutory Agent Acceptance form with your Articles of Organization.
The filing fee is $50 (an additional $35 fee is charged for expedited processing).
An LLC operating agreement is not required in Arizona, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo’s Online LLC. If an operating agreement is created, it need not be filed with the Articles of Organization.
There is no newspaper publication requirement for LLCs based in Maricopa or Pima counties. The Corporations Commission publishes LLCs formed in these counties on its website, which automatically satisfies the publication requirement. For LLCs based in other counties, a Notice of LLC Formation must be published within sixty 60 days after the Corporations Commission approves the filing of your LLC’s Articles of Organization. The notice must be published in a newspaper of general circulation in the Arizona county where it does business for three consecutive publications.The LLC may be subject to dissolution if it fails to publish. Filing an affidavit of publication is not necessary.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN. If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN). This is so even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses. Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the city in which the business is located (or county if you are in an unincorporated area). For state licenses, check the Arizona Department of Commerce Licensing Guide.
State taxes. In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you’ll need to register with the Arizona Department of Revenue (DOR). For most purposes, you can register online or on paper (Form JT-1/UC-001, Arizona Joint Tax Application). For more information on state LLC tax registration, check Nolo's article Arizona LLC Annual Filing Requirements.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Arizona Corporation Commission. You can conduct a name search for free on the Arizona Corporation Commission website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Arizona does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
All LLCs organized outside of Arizona must register with the Arizona Corporation Commission to do business in Arizona. Foreign LLCs must appoint a registered agent for service of process that is physically located in Arizona. To register, file by postal mail an Application for Registration of a Foreign Limited Liability Company. A certificate of existence or similar document from the LLC’s home state must be filed with the Application. The application does not need to be published. The filing fee is $150.
Before filing the application, make sure the LLC’s name is available in Arizona by checking the Arizona Corporation Commisstion business name database. If the name is not available, the foreign LLC must adopt a fictitious business name in Arizona. A copy of the company’s resolution adopting the fictitious name must be filed with the Application. The foreign LLC must also appoint a statutory agent as described in Section 2.
For most formation purposes, a Arizona single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Arizona are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Arizona and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Arizona state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a Arizona PLLC, see our article, How to Form a Professional LLC in Arizona.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take in How to Dissolve an LLC in Arizona.