Arizona offers several advantages for any new limited liability company (LLC), including a low $50 filing fee, no annual reporting requirements, and no franchise tax. However, entrepreneurs still need to follow specific steps to ensure proper formation, from naming the LLC to securing an Arizona business license and local permits.
How to get an Arizona LLC in 7 steps
Before jumping into each step, here’s an overview of everything you’ll do in order to start your LLC:
- Conduct an Arizona business name search and choose one for your LLC.
- Appoint a statutory agent (also known as a registered agent).
- Prepare and file articles of organization with the Arizona Corporation Commission (ACC).
- Create an operating agreement for your AZ LLC (optional but recommended).
- Publish notices in relevant newspapers.
- Obtain an employer identification number (EIN) and open a business bank account.
- Register for Arizona state taxes and applicable registrations.
1. Name your Arizona LLC
You'll need to choose a name to include in your articles before you can register your limited liability company with the ACC. Names must comply with Arizona's naming requirements and be distinguishable from other entities filed with the ACC and Arizona Secretary of State (SOS). The following are the most important requirements to keep in mind:
- Your Arizona business name must include the words Limited Liability Company, LLC, or L.L.C.
- Your name must be different from existing businesses in Arizona. You can do a search through the ACC website to determine if a particular business name is in use. It’s also recommended that you search for similar-sounding names (e.g., Phoenix Pharmacy vs. Phoenix’s Pharmacy) to rule out any close matches.
- The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.
For more information, check out the complete listing of Arizona LLC naming requirements. In addition, you might consider reserving your business name through the ACC to hold it for up to 120 days. This might be a good idea if you’re not quite ready to establish your LLC but want to prevent others from taking it, though you’ll need to pay a $45 fee.
2. Choose your statutory agent
Arizona requires you to appoint an in-state statutory agent (also called a registered agent in other states) for your LLC. A statutory agent can be a person (including yourself or an employee of your LLC) or an entity that offers a registered agent service, provided they meet the following criteria outlined by the ACC:
- If an individual, the agent must have an address in Arizona and be at least 18 years old.
- If an entity, the agent must be authorized to transact business and have an address in Arizona.
- The agent must be on-site and available to accept documents during regular business hours.
- The statutory agent must accept the role in writing, which can be done by filling out the Statutory Agent Acceptance form with the Articles of Organization.
A statutory agent receives service of process and other official legal documents and notices on behalf of your Arizona LLC. While there’s no fee to appoint a statutory agent, you’ll still need to pay for their services (if you work with a third party), which may cost between $50 and $300 annually in Arizona.
3. Prepare and file articles of organization
The articles of organization is a document that officially establishes your LLC in Arizona, and you’ll file it with the ACC. This process is relatively straightforward and can be completed online through the ACC’s eCorp website or by mail. You'll need the following information with either method:
- Your AZ LLC name and address
- Indication of whether you have a professional or regular LLC
- If a professional LLC, description of services offered
- The name and address of your statutory agent
- Management structure (i.e., manager or member-managed LLC)
- The person forming the LLC is required to sign the Articles.
Once you file your articles, the ACC will review the filing and issue a decision. If the articles are approved, the LLC becomes a legal business entity, and the state will issue a certificate. Eventually, you’ll use this to apply for and obtain an employer identification number (EIN), business licenses, and business bank account.
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4. Create an operating agreement
Arizona LLCs are not required to file an operating agreement, which outlines the way your LLC will conduct business. Still, it’s an essential component of any successful business, so you should strongly consider creating one.
The operating agreement can include, but is not limited to, the following:
- Your AZ LLC's name and principal address
- Name and address of your statutory agent
- Purpose of the business
- The way profits and losses will be divided
- Procedure for admitting new members, as well as outgoing members
- Management of the LLC
- Indemnification and liability clauses
Having a readily accessible, written operating agreement is helpful for various reasons, especially to resolve disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, Arizona courts make determinations based on state law, not necessarily what is in the best interest of the LLC and its members.
5. Complete publication requirements
Arizona requires most LLCs to publish a Notice of Formation for three consecutive weeks in an approved newspaper in the county of your LLC's statutory agent. A notice of formation will list the following:
- The LLC's name
- The statutory agent's name and address
- The LLC's principal business address
- Whether the LLC is manager-managed or member-managed
- The name and address of the LLC's manager or each member of the LLC
Afterward, it’s advisable to file an affidavit of publication with the ACC to confirm you completed the Arizona LLC publication requirement. However, LLCs formed in Maricopa or Pima counties are not required to meet publication requirements.
6. Get an Employer Identification Number and open a business bank account
An Employer Identification Number (EIN) is a unique nine-digit code assigned by the Internal Revenue Service to identify your LLC for tax purposes. While not always required for Arizona single-member LLCs with no employees, obtaining an EIN is generally recommended to keep your personal and business finances separate.
The purpose of an EIN is to assist with the following:
- File and manage taxes at the state and federal levels.
- Open a business bank account.
- Hire employees.
You can obtain your EIN by mail or online through the IRS for free. Once you’ve secured a federal tax identification number, you can start to look into business bank accounts for your LLC. You can typically find options through the big banks (i.e., Wells Fargo, Chase, or Bank of America), as well as regional or local banks near you in Arizona.
7. Register for taxes and Arizona business licenses
As pass-through entities, LLC members typically report income taxes on their personal returns—unless they elect to be taxed as a corporation. However, there are several other tax and licensing considerations for Arizona LLCs.
- TPT license. LLCs selling certain products or services in Arizona may need to apply for a Transaction Privilege Tax (TPT) license, which is similar to a sales tax. However, this depends on your business activities, so be sure to check with the Arizona Department of Revenue (DOR).
- Employment taxes. If you have or plan on hiring employees, you’ll need to register with AZTaxes.gov using your EIN to set up employment tax withholding. Additionally, you must register with the Arizona Department of Economic Security (DES) for unemployment insurance tax.
- Business licenses and permits. You also may need specific licenses for your LLC, though Arizona doesn’t require a general business license. You can check with the Arizona Commerce Authority to identify the exact state or local licenses you’ll need.
If you’d like assistance, LegalZoom can look into all these licenses and permits for you and identify which ones your business needs to operate.
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Next steps after forming your Arizona LLC
Registering your LLC gives you a legal foundation to conduct business in Arizona. Still, you’ll typically need to complete a few additional steps to get up and running, including the following:
Register a domain name
In today’s digital age, having an online presence is crucial for most businesses. Even if you don't think you'll need a webpage, there’s a chance you will in the future. At the very least, you should reserve the option of having one in the future by buying your domain name now. Before finalizing your LLC name, it's a good idea to check if the URL is available.
To do this, visit a domain registrar like GoDaddy or Google Domains. Search for your desired domain name (or an abbreviated version if a long name) followed by the appropriate extension (e.g., .com or .org). If you skip this step, however, you risk losing your domain name to another business with a similar name.
Get business insurance
While specific needs vary by industry and business size, you’ll likely need to acquire some form of business insurance, such as:
- General liability insurance for common business risks
- Professional limited liability company insurance to cover claims of negligence
- Workers’ compensation for work-related injuries and illnesses, which is mandatory in Arizona for businesses with employees
- Applicable property insurance for physical assets, including buildings, equipment, and vehicles
You can research quotes yourself or consult a licensed insurance agent in Arizona to identify which insurance plans you’ll need to protect your LLC.
Ongoing requirements
Unlike many states, Arizona doesn’t have annual LLC filing fees or reporting requirements. However, you must still comply with tax obligations, including filing and paying any applicable state and local taxes (not to mention federal income tax).
In addition, your LLC must maintain a statutory agent in Arizona at all times. In the event you need to change agents, you’ll need to submit a statement of change for $5 (or $40 for expedited processing). It’s also a good practice to review and update your LLC’s information with the ACC as needed.
Obtain a certificate of good standing
While not mandatory, obtaining a certificate of good standing (also called a certificate of existence) might be beneficial for your Arizona LLC. This document confirms your LLC’s legal standing and active registration with the ACC. It may be required when seeking loans, opening bank accounts, or moving to other states.
To obtain one, visit the ACC’s website and request the certificate online. The fee is currently $10 (or $45 for expedited processing).
Consider a foreign LLC
If you ever plan on conducting business in other states, you may need to register as a foreign LLC in those jurisdictions. This typically involves filing the necessary paperwork and paying the required fees in each state where you wish to operate. You might also need to provide a certificate of good standing from the ACC and appoint a registered agent in the new state(s).
Still, foreign LLC requirements and costs depend on the state, so research each jurisdiction’s specific rules or consult a business attorney for advice.
The cost of forming an LLC in Arizona
All things considered, you’ll pay at least $50 to start your LLC. However, the total costs can increase to $1,000 or more, especially if you need specialized permits for your Arizona LLC.
Immediate formation costs
- Filing fee (articles of organization): $50 ($85 for expedited processing)
- Registered agent: $0 to $300 (self-appointed vs. professional registered agent services)
- Reserve your business name (optional): $10 ($45 for expedited processing)
- Publication costs: $30 to $300, depending on the newspaper, but this isn’t required in Maricopa and Pima counties.
Additional costs
- Business licenses and permits: $10 to $300 or more (for reference, the TPT starts at $12)
- Business insurance: $70 to $100 per month, depending on business needs and coverage type(s)
- Filing a trade name (DBA): $10 ($45 for expedited online filing)
- Certified copies of documents: $10 to $15, depending on the requested documents
You might also pay fees for any corrections or revisions you submit to the ACC, so be sure to check the schedule of fees for an accurate estimate.
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How to start your Arizona LLC with LegalZoom
We’ve shown you the complete process to start an LLC in Arizona, but why not save time and launch your LLC in only three steps with LegalZoom? Here’s how it works:
- Tell us about your business. Fill out our questionnaire with basic information about your LLC.
- Let us handle the paperwork. Using your answers, we’ll prepare and file all the necessary documents with the Arizona Corporation Commission.
- Get your LLC documents. Once approved, we’ll send you your finalized AZ LLC paperwork along with helpful next steps to get your business going.
The best part is you can start your LLC with us for as low as $0 + the Arizona filing fee of $50. That way, you can focus less on the paperwork and more on setting up your venture to succeed in the Grand Canyon State.
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FAQs
What are the benefits of registering an LLC?
LLCs offer personal asset protection (unlike sole proprietorships), flexible management structures, and pass-through taxation. LLCs also have fewer formal requirements than corporations, which makes them ideal for small businesses that want to protect their assets with less administrative work.
How long does it take to set up an LLC in Arizona?
New Arizona LLC applications may take between 13 and 15 business days to process, whether you file online or by mail. Those who pay for expedited processing can generally expect a response within four to six business days.
Do I need a business license for my AZ LLC?
Arizona doesn’t require a general state business license, but many cities and counties require local licenses. Check with your local government authorities or the Arizona Commerce Authority to clarify which ones you’ll need.
What taxes does an LLC pay in Arizona?
In Arizona, LLC members report their share of profits on personal tax returns unless they opt to be taxed as a corporation. In addition, LLCs may need to pay Arizona transaction privilege tax (similar to sales tax), unemployment insurance tax if they have employees, and any applicable local taxes.
Rudri Bhatt Patel contributed to this article.
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