How to decide on a name for your Arizona LLC? Every business needs a good name. Advertising and marketing concerns are important. But the name must meet the legal requirements as well.
You should start by reviewing Arizona Revised Statutes section 29-3112 to ensure your desired LLC name complies with the law. Every Arizona LLC name must include one of the following:
The name must be unique and distinguishable from existing businesses. You can use Arizona’s online Entity Search to find out what names are already taken. You should avoid using exact matches as well as closely-related names.
It’s also important to only use certain terms if authorized to do so. This applies to many highly-regulated industries, such as banking. Misleading the public and holding your LLC out as something it isn’t will create many problems.
Using a doing business as (DBA) name provides a lot of flexibility. Arizona calls these trade names. For example, “Gilbert Landscape Services LLC” could operate under “Gilbert Premier Lawn Care.”
Now is a also good time to consider the available domain names (URLs) for your business’s online presence. Even if you don’t want to launch a website right away, reserving a matching domain name for your business can avoid future setbacks.
What is a statutory agent? All businesses need to provide a primary contact to handle important notices. Many states call this the registered agent. Arizona calls it the statutory agent.
The main purpose for the statutory agent is to receive service of process. If your LLC gets sued, the paperwork goes to the statutory agent. As you can imagine, you need to handle this role with care.
You may appoint yourself to serve as the statutory agent or registered agent. But many seasoned business owners avoid doing so. Instead, they hire registered agent services to take the burden off their shoulders.
Serving as your own statutory agent has some advantages, including:
But there are some flaws to appointing yourself, such as:
We recommend using a statutory agent or registered agent service. By doing so, you can stay clear of many problems and focus on your business. The service will sort your mail and keep your address confidential.
Statutory agent or registered agent services are quite affordable. They cost around $100-$150 per year. Attorneys can charge up to $500 per year for the same service.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
How do I file the Articles of Organization? Pay close attention to this important step. It is what transforms your business from an idea into a real legal entity. The LLC does not exist until you file the Articles of Organization with the Arizona Corporations Commission.
It’s a common belief that it’s necessary to hire an attorney in order to complete this step. But the process is likely much easier than you think.
Section 29-3201 provides the legal requirements. In short, the Articles of Organization for every Arizona LLC must include:
To make the process easier than ever, Arizona provides a fillable form. Be prepared to pay a $50 fee. Arizona also provides the estimated processing times for LLC formation filings. Non-expedited filings can take as long as 15 business days.
If the delay doesn’t fit your desired timeline, you can pay for faster service. An extra $35 fee gets you Expedited service. This usually lowers the processing time to less than five business days. You can also select one of these options:
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
How do I meet the publication requirement? Before the internet era, it was common to publish certain legal matters in local newspapers. While most locations in the United States have removed this step, Arizona still requires it.
Under Arizona law, there are two methods for meeting the LLC publication requirement:
For the companies that must pay for the publication, the typical cost is usually between $30 to $300. You need to complete this step within 60 days of filing the Articles of Organization.
Does my Arizona LLC need an operating agreement? Operating agreements are contracts between LLC members. They dictate how the LLC functions and handles many situations.
Arizona does not require LLCs to have an operating agreement. But experienced business owners execute one anyway. Operating agreements help protect businesses and personal interests.
Without one, the LLC falls back to state law when disputes arise. These might not have the results you desire. Instead, you can create an operating agreement customized to your needs. Review section 29-3105 to see what an operating agreement can have.
The best operating agreements cover any situation the LLC might encounter. This includes:
Operating agreements are private contracts. You do not need to file it with the state.
Having an operating agreement can mitigate many future headaches. The best LLC formation services make it easy to create by providing templates for as little as $50. We recommend taking this route.
Do I have to get an EIN? The Internal Revenue Service assigns and uses Employer Identification Numbers (EIN or FEIN) to track business entities for federal tax purposes. Employer Identification Numbers essentially function like Social Security Numbers, but for businesses instead of individuals.
Certain types of businesses are obligated to obtain an EIN from the IRS. These include any of the following cases:
Even if your LLC doesn’t fall under one of these qualifications, getting an EIN is generally beneficial for your business. For example, some states require LLCs to have an EIN for their state tax filings, and many banks require having an EIN to open a business bank account for your LLC.
Luckily, the IRS has made the process very easy and straightforward via its online EIN application. It only takes about five minutes to complete and is entirely free of charge. As a rule, it’s not worth hiring someone else to do this unless it’s part of a wider LLC formation package.
Read More: How to get an Employer Identification Number in Arizona
All new businesses must get the necessary licenses and permits. The state, county, and city-level authorities can issue these crucial components. Neglecting to get what your business needs can result in serious setbacks.
Some states require every business to get state approval. Arizona is not one of those and does not offer a general business license.
But Arizona does regulate some business activities. Review the Professional Licenses to see if you need to get one before starting up.
Besides the State’s needs, you’ll also need to follow local regulations. These come from the City of Gilbert and Maricopa County.
Start by getting a business license from the City of Gilbert. Every business must get one to operate in Gilbert. This applies to home-based businesses as well.
The City of Gilbert provides the One Stop Shop to streamline the approval process.
Maricopa County does not provide a general business license. But some businesses must get County licenses and permits. These apply to the specific activities involved, including:
Connect with the local officials for more guidance. They can help you get what your business needs before starting operations.
Leveraging the knowledge of experienced business owners can unlock the secret to success. Connect with seasoned entrepreneurs by reaching out to the local community. Others are eager to help your business reach its full potential.
Here is a list of local organizations dedicated to helping businesses thrive:
If you’ve completed the above steps, you’ve formed your Arizona LLC. You can celebrate being a giant step closer to opening the doors to your new business.
But there are a couple of extra steps that are worth completing right away.
The internet has fundamentally changed the way the world does business, to the point where almost every business will need to have an online presence. But even if you’re not looking to create a website right away, it’s still worth considering registering a matching domain name (URL) for your company.
If you don’t register your LLC’s domain name right away, there’s a significant risk of domain squatters registering your ideal domain name before you. These groups track new business formations via publicly available records and rush to buy all their matching domain names, only to resell them back to the business at vastly inflated prices. Alternatively, there’s the risk of one of your rivals registering your desired domain names to block you from using it.
Luckily, getting a domain name is a very straightforward and affordable process. Most cost about $20-$50 per year and you can register your URL fully online. Doing so now can help mitigate future headaches.
Many business owners use doing business as (DBA) names. These allow you to operate under a name that’s different from the LLC’s legal name. It opens up a world of possibilities.
For example, “Gilbert Textiles LLC” can use “Gilbert Denim Dealers.”
Arizona calls these trade names. And there are some specific requirements to follow to use one. You’ll need to register the trade name with the Secretary of State. The online portal makes the process easy.
A $10 filing fee applies to registering Arizona trade names. It lasts for five years before needing renewal.
Unlike many states, you are not required to file an annual report for an Arizona LLC. But you need to keep the LLC’s contact information, including the statutory agent, up to date. Arizona provides a fillable form to make this easy.
Handling tax responsibilities is another crucial consideration. Most LLCs receive pass-through taxation. The income flows through to the personal income tax returns of the members.
But if your LLC hires any employees, it needs to withhold taxes. If it sells any goods or services, you’ll have to collect and pay the transaction privilege tax.
It’s also a good idea to open a business bank account. These make accounting much easier. They can also help protect personal assets.
You might want to consider purchasing certain insurance policies. General liability or workers’ compensation insurance can be well worth the cost.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.