1. Choose a business name for the LLC and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
- Arizona law requires that an LLC name contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C.”, “L.C.”, “LLC” or “LC”, in uppercase or lowercase letters. A.R.S. § 29-602(A)(1). The LLC name may not contain the words "association", "corporation" or "incorporated" or an abbreviation of these words. A.R.S. § 29-602(A)(2). Additionally, your business name must be distinguishable from the names of corporations, partnerships, or other entities created in the state or doing business in the state. A.R.S. § 29-602(B). Certain exceptions to this rule can be found in A.R.S. § 29-602(C).
- You can check the availability of an LLC name through the Arizona Corporation Commission’s Electronic Filing Document Information website.
- Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
2. Prepare and file articles of organization with the Arizona Corporation Commission.
- The filing fee is $50. A.R.S. § 29-851(A)(1). The Arizona Corporation Commission's website has simple, fill-in-the-blank forms for LLCs, including a form for articles of organization. Instructions are provided as well.
- If the LLC will be managed by one or more managers, rather than all the members together, then you should put a clause saying that in your articles of organization (or the operating agreement). See A.R.S. § 29-681. For general information on articles of organization, see the Articles of Organization page.
3. Negotiate and execute an operating agreement.
- Arizona does not require an operating agreement in order to form an LLC, but executing one is highly advisable. There is no set criteria for the content of an operating agreement, but it typically includes topics such as how meetings are conducted, how the company will be managed, what capital contributions are required from each member, and how profits and losses will be allocated. See A.R.S. § 29-682 for more detail on the topics an operating agreement may include. The operating agreement does not need to be filed with the state. Please see the Operating Agreement page for details.
4. Obtain any required local licenses.
- See the general section on forming a LLC for details.
5. Determine what tax and other regulatory obligations the LLC has, and take care of any necessary registrations.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- If you have an employee or employees to whom you page wages for services performed in Arizona, you must register complete the Joint Tax Application for employer withholding and unemployment insurance. You can do this via the Arizona Department of Revenue website (click on “License a New Business”), which you can also use to register for other business taxes (if applicable).
- Whenever you hire an employee in Arizona, you must inform both the IRS and the State of Arizona. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information about reporting new hires at the Arizona New Hire Reporting website.
- All employers who regularly hire workers in their customary business must carry workers' compensation insurance. A.R.S. § 23-902. The Industrial Commission of Arizona administers the Arizona workers’ compensation program. For more information, see their Employers’ Frequently Asked Questions.
- Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007. A.R.S. 23-214.
- As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
- A.R.S. § 29-857 provides that, for Arizona income tax purposes, an LLC and its members shall be taxed as if the LLC is a partnership or a corporation, or is disregarded as an entity separate from its owner, as determined pursuant to the Internal Revenue Code. In other words, the federal tax classification of a limited liability company determines the entity's classification for Arizona tax purposes. See Arizona Corporate Tax Ruling CTR 97-2 (Aug. 8, 1997).
6. Open a bank account for your business.
- It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN), a copy of the articles of organization, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.