Starting an Arizona LLC
An Arizona Limited Liability Company (LLC) is a business structure that offers personal liability 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.
1. Arizona LLC Name
Before filing your Arizona LLC’s Articles of Organization with the Arizona Corporation Commission (AZCC), you’ll need to search your Arizona LLC Name in the state’s database to make sure your desired business 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: Arizona Business Entity Search Page
LLC Designator: As per the Arizona LLC Act section 29-3112, your LLC name must end with a proper designator. The following are the only ones that are allowed:
- 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:
- 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.
2. Arizona LLC Statutory Agent
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.
If your Arizona Statutory Agent will be a person:
- they must be a resident of Arizona
- they must have a physical street address
(a PO Box can’t be used)
If your Arizona Statutory Agent will be a company:
- they must be registered to do business in Arizona
- they must have a place of business in Arizona
- they must have a physical street address
(a PO Box can’t be used)
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 on your privacy (whether or not your address is on public records) and if your LLC will need to meet the newspaper publication requirement.
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.
Note: Options #1 and #2 are not applicable if the person isn’t a resident of Arizona (for example, you live in Idaho but want to set up an LLC in Arizona).
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).
Northwest is registered to do business in Arizona, they have a place of business in Arizona, and they have a physical street address in Arizona (they meet all of the requirements).
Special offer: If you hire Northwest to form your LLC ($39 + state fee), they’ll include their Registered Agent service free for the 1st year.
3. Arizona LLC Articles of Organization
The Arizona LLC Articles of Organization (Form L010) is the document that creates your Arizona LLC.
Method of filing: You can file your Articles of Organization online or by mail.
Arizona LLC filing fee: $50
(Learn more about all the Arizona LLC Costs)
Our recommendation: We recommend the expedited online filing ($85) since there is less paperwork and the approval time is only 1 day.
If you’re okay with spending $85 to get your LLC approved in 1 day:
File your LLC online and don’t upload a signed Statutory Agent Acceptance form or any other documents during the online filing. Your Statutory Agent can then accept their position by clicking an email link sent by the AZCC. Therefore, as soon as the Statutory Agent clicks the acceptance link, your LLC will be approved.
If you only want to spend $50 and don’t care about approval time:
You can file your LLC online or by mail. Both methods have a 14-16 business day approval time. If you file online, you need to upload a signed Statutory Agent Acceptance form. If you don’t upload the form, the system won’t let you select a $50 filing fee at checkout.
Note: Filing times may take longer due to the current global situation and government delays. Please see how long does it take to get an LLC in Arizona.
File your LLC online: Arizona Corporation Commission: eCorp registration
File your LLC by mail: Along with your Articles of Organization, you must also mail 3 additional documents:
- Related article: Member-managed vs Manager-managed LLC
Prepare a check or money order and make it payable to the “Arizona Corporation Commission”. If you send $50, approval time is 14-16 business days. If you send $85, approval time is 7-9 business days.
Mail your documents to:
Arizona Corporation Commission
1300 West Washington Street
Phoenix, Arizona 85007
Arizona LLC approval documents: After your Arizona LLC is approved, you’ll receive the following two documents:
- Approval Letter
- Notice of Publication
Approved Articles of Organization: The AZCC doesn’t send you a copy of your approved Articles of Organization. You’ll need to download this (for free) from their database. Go to AZCC eCorp: Entity Search, search your LLC name, click “Document History” (bottom of page), and click “Articles of Organization”.
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
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:
- If you have an SSN or ITIN, you can apply for an EIN online
- 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
- 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
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 any Arizona LLC 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 where your Arizona LLC Statutory Agent holds a physical street address.
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 the physical street address of your Arizona LLC Statutory Agent is in Pima or Maricopa county, you don’t have to publish an ad in the newspaper.
If your Arizona LLC Statutory Agent holds a physical street address in any other county, then you must publish an ad in a newspaper in that county.
The reason for this is House Bill 2447 and changes that went into effect in 2017. Arizona LLCs with Statutory Agent addresses located in Pima or Maricopa county are published on the AZCC website… therefore, this fulfills the newspaper publication requirement for you. And you don’t have to worry about publishing any ads in the newspaper.
8. Arizona Business License & Permit
Your LLC may need an Arizona Business License. Arizona has three types of business licenses for LLCs. 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.
We recommend contacting your county, city, and/or town for more information.
The Arizona Commerce Authority has two helpful directories:
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 Arizona Commerce Authority has more information on how to obtain a Regulatory (Professional/Special) License, as well as other licenses and permits your Arizona LLC may need: Arizona Commerce Authority: Business Licensing
The Arizona Commerce Authority also has a checklist to help to make setting up your LLC and getting the required licenses and permits a little bit easier: Arizona Commerce Authority: 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
The below is a general overview and doesn’t include all the taxes you may be responsible for. Arizona LLC 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.
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). This is true for all Arizona LLCs.
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.
- Arizona Department of Revenue: Category – Individual
- Arizona Department of Revenue: Individual Income Tax Forms
- Arizona Department of Revenue: Individual Income Tax Highlights
- Arizona Department of Revenue: Form 140 – Resident Personal Income Tax Form (Fillable)
Arizona Partnership Income Tax Return (Form 165): Applies to Multi-Member LLCs. For most, it’s due by March 15th each year.
- Arizona Department of Revenue: Partnership Forms
- Arizona Department of Revenue: Partnership Highlights
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.
- Arizona Department of Revenue: Corporate Income Tax Forms
- Arizona Department of Revenue: Corporate Income Tax Highlights
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.
- Arizona Department of Revenue: Corporate Income Tax Forms
- Arizona Department of Revenue: Corporate Income Tax Highlights
- Arizona Department of Revenue: Arizona S Corporation Income Tax Return
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 a Transaction Privilege Tax.
You can get your TPT license here:
Arizona Department of Revenue: Transaction Privilege Tax
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 you get your TPT License Number, you can then download and complete the Arizona Resale Certificate (Form 5000A).
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 (or EIN Confirmation Letter 147C)
- 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.
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
Debit card: The bank will give you a debit card when you open the account.
Credit card: You can also get a business credit card to earn points, miles, and other rewards.
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 set up 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 Department of Economic Security (DES)
Arizona Department of Economic Security
Arizona Department of Economic Security: Contact Us
602-542-4791 (8am to 5pm)