Arizona LLC

Last updated on

How to Form an LLC in Arizona

Quick Start Guide ← you are here
This Quick Start Guide is a brief overview of how to form an LLC in the Arizona.

Detailed Lessons:

 

Arizona LLC Costs:
Arizona LLC formation: $50 (regular) or $85 (expedited)
Arizona LLC annual report: none

Need help?
Hire a reliable service to form your Arizona LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

Matt Horwitz LLC University Founder

Hi there, my name is Matt Horwitz and I’m the founder of LLC University®.

We’ve put together a free guide on how to form an LLC in Arizona. We hope you find it helpful!

To form an LLC in Arizona, you can either follow the Detailed Lessons above (step-by-step instructions), or you can follow our Quick Start Guide below on this page (a brief overview of all the steps).

If this is your first time setting up an LLC in Arizona, we recommend that you follow the Detailed Lessons above. Please make sure to follow them in order.

How to Form an LLC in ArizonaAn Arizona Limited Liability Company (LLC) is a business structure that offers personal liablity protection in case of a lawsuit. In the event your Arizona LLC is sued, your personal assets (like your home, vehicles, and bank accounts) will be protected.

You can use an Arizona LLC to run a business or you can use your LLC to purchase assets, such as real estate, vehicles, boats, and aircraft.

To form an LLC in Arizona, you can:

  • follow the Quick Start Guide on this page (a brief overview), or
  • follow the Detailed Lessons above (step-by-step instructions)
Need to save time? Hire a professional to form your LLC in Arizona: Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

1. Arizona LLC Name

• Before filing your Arizona LLC’s Articles of Organization with the Arizona Corporation Commission (AZCC), you’ll need to search the state’s database to make sure your desired LLC name is available for use.

• Your Arizona LLC name must be unique and distinguishable when compared to existing businesses registered in the state.

• Search your LLC name using the Arizona Business Entity Search Page:
https://ecorp.azcc.gov/EntitySearch/Index

LLC Designator: As per the Arizona LLC Act section 29-602, your LLC name must end with a proper designator. The following are the only ones that are allowed:

  • LC
  • L.C.
  • LLC
  • L.L.C.
  • Limited Company
  • Limited Liability Company

Tip: If you’re not sure which designator to use, “LLC” is the most common. It’s also the easiest to recognize.

• Your Arizona LLC name cannot include a designator that makes it sounds like a different type of legal entity:

  • Inc.
  • Incorporated
  • Corp.
  • Corporation
  • LP
  • LLP
  • Non Profit
  • Non Profit Corporation

• Far too many people rush the LLC formation process and then later want to change their Arizona LLC name. While you can change your LLC name later (by filing an amendment), the process can be a major pain. You’ll need to change your LLC name with the IRS, the bank, and the Arizona Department of Revenue. For this reason, we recommend reading how to come up with a good business name so you don’t have to change your LLC name later.

• Arizona LLC Name statutes:
LLC Act sections 29-602, 29-804, 29-845

2. Arizona LLC Statutory Agent

• The AZCC requires you to list a Statutory Agent in your LLC’s Articles of Organization.

An Arizona Statutory Agent is a person or company who agrees to receive notices, legal mail, and court documents (called Service of Process) in the event your LLC is sued or involved in a court case.

• Most states use the term “Registered Agent”, however, Arizona and a few other states call them “Statutory Agents” or “Resident Agents”. They all mean the same thing. The official term in Arizona is “Statutory Agent”.

• Your Arizona Statutory Agent must have a physical street address located in the state (PO Boxes are not allowed) where Service of Process and other documents can be received.

Who can be your LLC’s Arizona Statutory Agent?

(Note: As we mention in our Arizona Statutory Agent lesson, who you choose as your LLC’s Statutory Agent will have an impact your privacy as well as whether or not you’ll need to meet the newspaper publication requirements.)

In Arizona, you have 3 options for who can be your LLC’s Statutory Agent:

Option #1 is for you to be your LLC’s Statutory Agent.

Option #2 is for a friend or family member to be your LLC’s Statutory Agent.

Option #3 is to hire a Commercial Statutory Agent. Hiring a Commercial Statutory Agent is a good idea if you want to keep your address off public records or if you don’t have an address in Arizona.

Commercial Statutory Agent: If you want to hire a Commercial Statutory Agent in Arizona, we recommend Northwest Registered Agent ($125 per year).

Northwest has great customer service and has been in the business for over 20 years. Any mail that is sent to your LLC will be scanned by them and uploaded to your online account. They’ll also let you use their office address throughout your LLC filing in order to keep your address off of public records (and to avoid the newspaper publication requirement).

Special offer: If you hire Northwest to form your Arizona LLC ($39 + state fee), they’ll include their registered agent services free for the 1st year.

• Arizona Statutory Agent statutes:
LLC Act sections 29-604, 29-605, 29-806

3. Arizona LLC Articles of Organization

Arizona LLC filing form: Articles of Organization (Form L010)

Arizona LLC filing fee: $50 or $85, depending on how fast you want your LLC approved.

Method of filing: You can form an LLC in Arizona online or by mail.

Our recommendation: We prefer the online filing as the approval time is a little bit faster and the process is easier to complete.

File your LLC by mail: Along with your Articles of Organization, you must also mail to the state 3 additional documents:

Then prepare a check or money order (for $50 or $85) and make it payable to the “Arizona Corporation Commission”. Mail your documents to: Arizona Corporation Commission, 1300 West Washington Street, Phoenix, Arizona 85007.

File your LLC online: https://ecorp.azcc.gov/AzAccount/Register

Approval times: Both the online filing and mail filing have similar approval times, however the online filing is quicker by a few days (since you don’t have to wait for mail time). Regular filings ($50) take 22 business days for AZCC approval. Expedited filings ($85) take 9 business days.

Arizona LLC approval: Once your Arizona LLC is approved, you’ll receive the following 2 documents (by mail or email, depending on how you formed your LLC) from the AZCC:

  • Approval Letter
  • Notice of Publication

• Regardless of whether you form your Arizona LLC online or by mail, the AZCC doesn’t send you a copy of your Articles of Organization. You’ll need to download this (for free) from their database. Search your LLC name on eCorp, click “Document History” (bottom of page), and then click “Articles of Organization”.

Arizona Articles of Organization statutes:
LLC Act sections 10-122, 10-202, 10-501, 10-502, 10-504, 10-3122, 29-604, 29-605, 29-632, 29-851

Need to save time? Hire a professional to form your LLC in Arizona: Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

4. Arizona LLC Operating Agreement

• An Arizona LLC Operating Agreement is a written contract among the LLC Members that spells out who owns the LLC and how much of the LLC they own. Your Arizona LLC’s Operating Agreement will also document how your LLC is managed, how profits are split, how taxes are paid, and more.

• An Operating Agreement should be put in place for both Single-Member LLCs and Multi-Member LLCs located in Arizona.

• Having an Operating Agreement for your Arizona LLC helps prove that the company is a separate legal entity from its owners. This helps maintain the personal asset protection provided by your LLC and is very beneficial to have if you ever end up in court.

Internal Document: An LLC Operating Agreement is an “internal document”, meaning, you don’t have to send a copy to the AZCC, the Department of Revenue, the IRS, or any other government agency. Just need to keep a copy of the Operating Agreement with your LLC business records and give a copy to any other LLC Member, if applicable.

Download an Arizona LLC Operating Agreement: We provide free Arizona LLC Operating Agreement templates that you can download on this page: Arizona LLC Operating Agreement

• Arizona Operating Agreement statutes:
LLC Act sections 29-3105, 29-3106, 29-3107

5. Apply for an EIN for your Arizona LLC

• An EIN (Employer Identification Number) is obtained from the IRS after your Arizona LLC is approved by the AZCC.

• An EIN is also called an EIN Number, FEIN, Federal Employer Identification Number, or a Federal Tax ID Number. They all mean the same thing.

• It’s helpful to think of your Arizona LLC’s EIN Number as its “social security number”. It helps identify your LLC to the IRS for tax and filing purposes.

• Your Arizona LLC’s EIN will also be used when you open an LLC bank account, register your LLC for taxes, and process employee payroll (if applicable).

How is an Arizona LLC taxed: The IRS doesn’t have a specific tax classification for LLCs and instead, an Arizona LLC can be taxed 4 different ways with the IRS; 2 of which occur by default (they occur simply by obtaining your LLC’s EIN), and 2 require a special election be made (a form must be filed after you obtain your LLC’s EIN). We recommend reading how is an LLC taxed before applying for your EIN.

Wait for LLC approval: Don’t apply for an EIN until your Arizona LLC is approved by the AZCC.

An EIN is free ($0): The IRS will issue an EIN to your LLC at no cost.

Husband and wife LLC: If you are forming a 2-Member husband and wife LLC in Arizona you can elect a special type of taxation called a Qualified Joint Venture. This allows a 2-Member husband and wife LLC to be treated as a Sole Proprietorship instead of a Partnership for tax purposes.

EIN Responsible Party: This will be the IRS’s “contact person” when you apply for your Arizona LLC’s EIN. If you have a Single-Member LLC, you will be the Responsible Party. If you have a Multi-Member LLC, any LLC Member can be the Responsible Party. For more information, please see EIN Responsible Party for LLC.

How to apply for an EIN: There are 3 ways to apply for an EIN for your Arizona LLC:

  1. If you have an SSN or ITIN, you can apply for an EIN online
  2. If you apply for an EIN online and you get an error message, you’ll need to apply for an EIN with Form SS-4 instead
  3. If you don’t have an SSN or ITIN, you can still get an EIN for your LLC by following these instructions: how to get an EIN without an SSN or ITIN

IRS statutes (Code of Federal Regulations, Title 26):
24.47, 25.169, 40.361, 301.7701-3, 301.7701-12, 301.6109-1, 422.112

6. Arizona LLC Annual Report

No LLC Annual Report in Arizona: Unlike most states that require LLCs to file an Annual Report and pay an annual fee, the AZCC doesn’t require Arizona LLCs to file any Annual Reports.

• Again, there are no annual fees or reports that need to be filed with AZCC, however, that doesn’t mean you don’t have to pay taxes or meet obligations with the Arizona Department of Revenue (details a few sections below).

7. Newspaper Publication Requirement

• Arizona is 1 of only 3 states that require LLCs to publish an ad in the newspaper after they are formed.

• Although this is somewhat antiquated (since the original purpose was to “notify the public”), it is still a state requirement for most* LLCs in Arizona.

• Within 60 days of your Arizona LLC being approved, you must publish an ad in a newspaper for 3 “runs” (publications). 3 runs usually take about 1-2 weeks, depending on the newspaper. The newspaper must be located in the same county as your LLC’s Known Place of Business.

• Once your ad has run, the newspaper will send you proof/verification; a document called an Affidavit of Publication. Although it’s optional, it’s best practice to then record that Affidavit of Publication with the AZCC. This is free. We have instructions here: Arizona LLC publication requirement

Approved newspapers: Here is a list of approved Arizona LLC newspapers from the AZCC.

Most* Arizona LLCs: If your LLC’s Known Place of Business is in Pima or Maricopa county, you don’t have to publish an ad in the newspaper. If your LLC’s Known Place of Business is in any other county, then you must publish an ad in the newspaper. The reason for this is House Bill 2447 and changes that went into effect in 2017: LLCs in Pima and Maricopa county are published on the AZCC website, therefore fulfilling the statutory requirement and making publishing an ad in the newspaper no longer required.

8. Arizona Business License & Permit

• Arizona has three types of business licenses. Some, none, or all of them may apply to your Arizona LLC:

  • Transaction Privilege Tax (TPT)
  • Local Business License
  • Regulatory (Professional/Special) License

Transaction Privilege Tax: Commonly referred to as a sales tax (although it really isn’t), the Transaction Privilege Tax (TPT) is a tax on sellers for the privilege of doing business in Arizona. The amount of tax varies by the location of your LLC. Additional info is below in the next section.

Local Business License: Arizona doesn’t impose a state business license, however, your LLC may need a local business license from the county, city, or town it is located or does business in. Furthermore, you may also need a permit depending on your business activities. The Arizona Commerce Authority (ACA) keeps a directory of counties, cities and towns here: https://www.azcommerce.com/small-business/quick-links/citytown-offices

Regulatory or Professional License: Your LLC will need this license if it offers professional services (law, medicine, accounting, etc.) or does business in a regulated industry (firearms, mining, drilling, etc.)

• The ACA has more information on how to obtain a Regulatory (Professional/Special) License, as well as other licenses and permits your Arizona LLC may need: https://www.azcommerce.com/small-business/quick-links/business-licensing/

• The ACA also has a checklist to help to make setting up your LLC and getting the required licenses and permits a little bit easier: https://www.azcommerce.com/small-business/categories/i-am-ready-to-start-my-business-in-arizona

• If you don’t want to make the calls and do the research to determine your licensing requirements, we recommend using IncFile.

9. Arizona LLC Taxes

Income tax: You are responsible for paying income tax to the federal government (IRS) as well as to the state of Arizona (Department of Revenue).

Federal income taxes: By default, LLCs are “pass-through” entities, meaning that the LLC doesn’t pay its own taxes, but rather, the profits or losses “flow through” to the owners and the owners have the responsibility of reporting and paying federal taxes. Exceptions to this are if you elect to have your LLC taxed as a Corporation (C-Corp or S-Corp).

• The IRS doesn’t have an “LLC tax classification”; therefore, LLCs are taxed based on the number of Members they have.

Single-Member LLC: Taxed like a Sole Proprietorship. Most will list their LLC’s income on a Schedule C as a part of their personal 1040 federal tax return.

Multi-Member LLC: Taxed like a Partnership. The LLC files an informational return (Form 1065), but the LLC doesn’t pay taxes. Instead, the LLC issues a K-1 to each Member (showing their portion of profits) and then each Member lists that income as a part of their personal 1040 federal tax return.

Arizona Resident Personal Income Tax Return (Form 140): Applies to all LLCs whose Members are residents. For most people, this is due by April 15th each year.

Individual Income Tax Forms
More information on Form 140

Arizona Partnership Income Tax Return (Form 165): Applies to Multi-Member LLCs. For most, it’s due by March 15th each year.

– Partnership Tax Form
More information on Form 165

Arizona Corporation Income Tax Return (Form 120): Applies to LLCs taxed as a C-Corporation. Tax rate is currently 4.9%. For most, this is due by April 15th each year. However, this type of taxation is not very common.

– Corporate Tax Forms
– More information on Form 120

Arizona S-Corporation Income Tax Return (Form 120S): Applies to LLCs taxed as an S-Corporation. Tax rate is currently 4.9%. For most, this is due by March 15th each year.

– Corporate Tax Forms
– More information on Form 120S

Estimated Taxes: Depending on how your LLC is taxed and what your tax liability is, there is a good chance you may need to file quarterly estimated tax payments.

Transaction Privilege Tax (TPT): All LLCs engaged in selling retail goods or engaging in certain services need to pay Transaction Privilege Tax and get a TPT License.

Need help with sales tax/TPT? If you need help with your sales tax filings, we recommend using TaxJar.

Reseller Certificate: If your Arizona LLC will buy goods from other businesses for the purposes of resale and/or manufacturing, you can avoid paying Transaction Privilege Tax by presenting the seller/vendor with your LLC’s Reseller Certificate. After your get your TPT License Number, you can then complete Form 5000A (Arizona Resale Certificate).

Other taxes: The above is a general overview and doesn’t include all the taxes you may be responsible for. Taxes vary widely and depend on many factors, such as how your LLC is taxed, where it’s located, who the owners are, if there are employees, and your industry. Other types of taxes in Arizona include (but are not limited to) payroll taxes, unemployment taxes, and industry-specific taxes.

We recommend working with an accountant: We recommend working with an accountant in Arizona to make sure you properly file your federal, state, and local taxes.

10. Arizona LLC Bank Account

• Once the IRS has issued an EIN Number to your Arizona LLC, you can open a business checking account.

• It’s best practice to have a business checking account for your Arizona LLC in order to maintain your personal liability protection. Using a personal bank account for your LLC is called “commingling of assets” and this can lead to personal liability issues if you end up in court.

• Having a separate business bank account for your Arizona LLC also makes record-keeping easier for accounting and tax purposes.

• Since banks in Arizona all have their own rules and regulations, we recommend calling a few banks to determine the following:

  • minimum initial deposit
  • minimum balance requirements
  • monthly maintenance fees (if any)

Required Arizona LLC paperwork: In order to open a business bank account for your Arizona LLC, you’ll likely need to have the following:

  • Articles of Organization (stamped and approved)
  • Approval Letter from AZCC
  • EIN Confirmation Letter from the IRS
  • Photo ID (driver’s license and/or passport)
  • Operating Agreement (usually not needed, but good to bring anyway)

Note: Call the bank ahead of time and double-check what documents are required.

For more details: Please see the following article: business bank account for an LLC.

LLC Members: If you have a Multi-Member Arizona LLC, all Members that want to be on the bank account should be present when opening the account.

Debit card and credit cards: Most banks will provide a business debit card on the spot after the bank account is opened. If not, they’ll usually mail the debit card within 1 to 2 weeks.

• If you want to get a business credit card, we recommend browsing cards at www.creditcards.com

Non-U.S. residents: If you are a non-US resident that has formed an LLC in Arizona, you can still open a U.S. business bank account. Please see this lesson: opening an LLC bank account for non-US residents

11. Arizona Business Phone Number

Instead of giving out your cell phone number (or home telephone number), it might be a good idea to get a separate business phone number for your Arizona LLC.

We recommend getting a phone number from Phone.com. They have the most affordable plans and good customer service.

You can get a local Arizona telephone number or you can get a “1-800” number for your business. Phone.com lets you setup call forwarding to any number you like, create pre-recorded messages, and you can get your voicemails sent right to your email.

Getting a separate phone number for your Arizona LLC is also a good idea if you’d like to keep your actual phone number off of those annoying “public record” websites.

Arizona State Agencies

Arizona Corporation Commission (AZCC)
(LLC filing)
Website: https://www.azcc.gov/divisions/corporations/
Phone: 602-542-3026 (8am to 5pm)
Email: [email protected]

Arizona Department of Revenue (DOR)
(AZ taxes)
Website: https://azdor.gov/
Phone: 602-255-3381 (8am to 5pm)

Arizona Department of Economic Security (DES)
(AZ employers)
Website: https://des.az.gov/
Phone numbers: Contact us

Matt Horwitz on LinkedinMatt Horwitz on TwitterMatt Horwitz on Youtube
Matt Horwitz
Founder & Educator at LLC University
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! We teach people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your entrepreneurial journey.

26 Comments

  1. Sally Carlton February 25, 2018

    Hello Matt. From what I am reading it’s best to form the LLC in the state the property is in.

    Our scenario. We live in Indiana but have purchased property in Arizona as an investment property not a second residence.

    Thank you,
    Sally Carlton

    reply
    • Matt Horwitz February 25, 2018

      Hi Sally, yes, that is correct. The LLC should be formed in the state where the property is located since that is where you are legally doing business. Hope that helps.

      reply
      • APB March 20, 2018

        Are they required to also the Arizona LLC as a foreign LLC, and form an LLC in Indiana where they live?

        reply
        • Matt Horwitz March 27, 2018

          Hi APB, usually no, unless it’s California. They would not need to register the Arizona LLC as a Foreign LLC in Indiana. And they would not need to form a Domestic LLC in Indiana (if they form a Domestic LLC in Arizona). The business is being done in Arizona, so that’s where the registration should take place. Here’s a related article: Domestic LLC vs Foreign LLC. Hope that helps.

          reply
  2. Scott March 25, 2018

    I have a client who develops apps and operates as a sole proprietor, in New York. He is considering forming an LLC, but is afraid of the costs of registering in New York, namely advertising requirements. Is there any reason why he should not register the LLC in Arizona (only a $50 filing fee),and apply to do business in New York? Do the operations need to be done in Arizona?

    reply
    • Matt Horwitz March 26, 2018

      Hey Scott, yes, there are many reasons why he shouldn’t register outside of New York, since that is where he is legally doing business. Check out “best state for LLC” for more info. If he forms an LLC in Arizona, but is doing business in New York, he’ll have to register the Arizona LLC as a Foreign LLC in New York. Also, if he follows our New York LLC course (follow the lessons in order), we explain how to save money on the newspaper publication costs. Hope that helps :)

      reply
  3. Michael March 31, 2018

    Hi Matt
    My friend and I live in California. We want to register an Arizona LLC to pool money together and invest in a startup. The startup is losing money for the next 3 years at least. Do we need to register a foreign LLC in CA in this case? We don’t operate any business in CA.
    Thanks

    reply
    • Matt Horwitz April 8, 2018

      By the very nature of residing in California, if you form an LLC out of state, you’ll be required to register as a Foreign LLC and file annual franchise tax and other tax filings with the California Franchise Tax Board (or you can just form a Domestic LLC in CA to begin with). Whether or not you gain or lose money, or have lots of activity or none at all, it doesn’t matter. California law, both corporate law and tax law are written in such a manner in which by the very nature of living in California and making a phone call about your Arizona (or other state) LLC, you’re “doing business” in California. So although you think you don’t operate a business in California, the state things otherwise. Hope that helps.

      reply
  4. TOM CALGARO April 3, 2018

    My Arizona LLC company sells home seller leads to retail merchants and insurance companies nationwide. Does my LLC have to file as a foreign LLC in other States?

    reply
    • Matt Horwitz April 8, 2018

      Hey Tom, no, likely not, unless you are “doing business” in those states. “Doing business” has much more to do with where you are operating from, not where your clients are. Hope that helps.

      reply
  5. Cris April 23, 2018

    Hi Matt,
    I use to live in Florida and New Jersey. Currently living abroad mostly traveling but also running an online travel agency(and other mostly online projects which allows working remotely). Although a non resident I need to register an Arizona LLC(or wherever makes more sense) to gain access to some large cruise lines tools for travel agents(it’s their requirement to be registered in US). However the business is operated online(various countries depends where we are ) and won’t operate in a particular US state. What are your thoughts on this? How non residents should register a LLC in this case? or should I go for it as sole proprietor?
    Many thanks

    reply
    • Matt Horwitz April 27, 2018

      Hey Cris, we don’t recommend a Sole Proprietorship over an LLC for liability reasons (see LLC vs sole proprietor). Do you file income taxes at the state level? Since you’re likely not doing business in any particular state by the nature of you residing/living there, you likely have all states open to you. And the decision should then be more influenced by taxes, so we recommend speaking with an accountant to discuss strategy. Hope that helps.

      reply
  6. Diana May 7, 2018

    Hi Matt,

    I have a TIN for my DBA, and now want to “convert” to LLC. Will the IRS transfer the current TIN, or will I need to get a new one? The business name isn’t changing, except to add LLC.

    Thanks much!!

    reply
    • Matt Horwitz May 16, 2018

      Hi Diana, the IRS will not automatically transfer the EIN from the DBA to your LLC. You can transfer the EIN by sending a letter to the IRS. More info here: convert Sole Proprietorship to LLC. Or you can cancel the EIN and then get a new one for your LLC. Cancelling and then getting a new EIN is usually easier and guarantees “cleaner” records (less confusion). Hope that helps.

      reply
  7. Tiey M July 15, 2018

    Good morning Matt,

    In “2016” I received certified mail stating that 25% of a previous job wages were going to be garnished, but I had already changed employment. After research I discovered that in “2010” a judgement was filed in Santa monica, CA civil court against me. I never received any previous notification. The judgment was for some apartment the I never lived in. I’m living in the state of Arizona. I have not heard anything about this matter since 2016. My question is if I open a business account with my new LLC, will they be able to freeze my account, because my ssn is attached to my business checking account? and if the judgement was filed in “2010′ is there some sort of statue of limitations? I thought it was 7 years in California.

    Thanks

    reply
    • Matt Horwitz August 12, 2018

      Hi Tiey, we’re not able to comment on questions such as this as you’ll need to speak to an attorney. Thank you for understanding.

      reply
  8. Dave July 29, 2018

    Hey Matt, I live outside the United States and run a logistics/freight company, I am considering forming an LLC and looking at Arizona, Wyoming, Delaware and Texas. Presently, we don’t make any income in the USA as all our clients purchase items in the USA and ship out to countries in Africa and Asia. Where would you advice, we form our LLC? Considering filling fees, annual reports and taxes.

    Presently, we use a 3rd party logistics company operating out of Texas and Georgia to get shipments out of the USA would this have any influence on where we should form our LLC?

    Thank you

    Great job by the way

    reply
    • Matt Horwitz August 14, 2018

      Hey Dave, I would recommend looking further into tax considerations (federal and state). If you’re a non-US resident, you may have Effectively Connected Income (ECI) and/or there is a chance you may be “engaged in trade or business with the U.S.” via an independent agent. If you’re a US citizen, it’ll depend on how you file your federal return, where your tax residency is established, and more. However, this is not a subject we get into so you’ll need to speak with an accountant and/or an attorney. Thank you for your understanding.

      reply
  9. Unknown August 21, 2018

    Hello Matt,

    I’m considering forming an LLC for a small game studio. If I had a partner in another state, does it matter which state the LLC is formed? No sales would occur for quite a while and when they do, it would only be on an online marketplace. Also, in Arizona, is there ever a renewal for the LLC or is it always considered “active”.

    reply
    • Matt Horwitz August 31, 2018

      You can usually pick either state unless there is substantially more business activity taking place in one state versus the other. An Arizona LLC has no annual report requirements or annual fees that need to be paid to the Arizona Corporation Commission (AZCC) and therefore, you’re correct, it will perpetually be in existence. Hope that helps!

      reply
  10. Justin September 2, 2018

    Hi.

    I’m a Canadian citizen/resident, looking to form a LLC in the US.

    Can a non-US citizen form a “domestic LLC” in Arizona with a Arizona Statutory agent — use their address as the principal business address?

    Thanks

    reply
    • Matt Horwitz October 12, 2018

      Hey Justin, yes, a non-US citizen can form a Domestic LLC in Arizona using the Commercial Statutory Agent’s address as the LLC’s Known Place of Business (if said Commercial Statutory Agent allows), however, LLCs owned by Canadians usually face double taxation (the IRS and the CRA). We don’t know the details, but I’d discuss this with a professional who works both sides of the border. I believe another entity may be a better choice from a tax perceptive. Feel free to share any findings if you’d like. I’m curious to hear what you come up with. Thanks.

      reply
  11. Talbot September 12, 2018

    Hello Matt,

    Is there any benefit to creating personal LLCs for each member of a new LLC that we will be creating together? I have heard people state that having this extra level of ownership increases protection against liability but are there also tax benefits? I hope this question makes sense lol.

    Thanks

    reply
    • Matt Horwitz October 16, 2018

      Hi Talbot, we’re not sure about any tax benefits from this. We recommend speaking to a few accountants. Feel free to share any findings if you’d like. Thanks.

      reply
  12. JuanM October 31, 2018

    Matt,

    Excellent guides, thank you. I am forming an LLC with 2 partners in order to passively invest into a fund that invests in Real Estate. My research says that because we are passive investors, we would not trigger “doing business” in any particular state. We’ll be subject to state taxes in states where the fund generates rental income from properties. However, state taxes shouldn’t guide where we form the LLC, rather, the “doing business” principle should because that’s what would trigger us having to register the LLC in other states. Because of this scenario, we are looking to form the LLC in a state with the lowest fees possible, even if we have to hire a registered agent (Arizona, New Mexico, or Idaho). Is this consistent with your understanding of LLC filings?

    reply
  13. ElayliahL November 3, 2018

    Hello Matt,
    First thank you for the wealth of information on your site.

    I am a current independent contractor working with multiple companies all from the comfort of my home. And since I am legally considered being in business for myself as a independent contractor I have definitely decided to create a single member LLC in Arizona the state I reside in, for the benefits the llc offers. Here is my question:

    As your article states I might need certain business license and permits for operating my business. Do I need a business license or permits since I’m working from home as a Independent cntractor? Would i be breaking zoning laws if i form an llc & work from home as a independent contractor? Could i be kicked out of my apartment for working as a independent contractor and owning a llc for said independent contractor business?

    reply

Leave a Comment