How to start an LLC in Arizona in 2024

Editor’s Note:  This article contains updated information from a previously published story:

Data from 2010 to 2023 shows Arizona to be the ninth fastest-growing state in the country. So, it’s not surprising that 115,670 applications for new businesses were filed in Arizona in 2022, a 50.3% jump in filings from 2019. If you plan to join these entrepreneurs, there are several steps you must take to start an LLC in Arizona. They include:

• Choosing and reserving an LLC name. 
• Designating a registered agent. 
• Registering with the state.
• Creating an operating agreement. 
• Publishing an LLC formation announcement. 
• Obtaining an Employer Identification Number (EIN).
• Registering with the Arizona Department of Revenue. 
• Opening a business bank account. 

8 steps to start an LLC in Arizona

In this guide, we walk you through the process of starting an LLC in Arizona, from choosing a name and registering with the state all the way to preparing to obtaining appropriate tax licenses and opening a bank account. As we do, we break down the steps and point you to free and affordable resources to make your journey easier.

Here are the steps to starting an LLC in Arizona:

1. Choose your LLC’s business name

You probably already have a shortlist of names in mind for your new LLC. Now shave that list down to one.

Start by doing an online search to ensure the name is available in Arizona. You can do so through the Arizona Corporation Commission’s online portal eCorp. For $10, you can reserve a name for 120 days by filing a name reservation form by mail or submitting it in person to the Arizona Corporate Commission. Because the name will be instantly reserved when doing so online, a $35 rush fee also applies to online name reservations (totaling $45). 

Your chosen LLC name must contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C.”, “L.C.”, “LLC” or “LC.” In addition, your name must not exceed 120 characters (including spaces), nor contain the words “association,” “corporation” or “incorporated.’ It also must be different from other business entity names within the state of Arizona.

If your chosen name is found to be the same name as an already existing Arizona business entity, you can distinguish it by making one or more of the following changes:

• Rearranging the words. 
• Adding “Arizona” to the name (if the used entity name does not contain it). 
• Pluralizing singular words that appeared in the already-used name (and vice versa).
• Changing numbers within the already-used name to their equivalent Roman numerals. 
• Creatively spelling words or spelling words differently than they appear in the used name.
• Abbreviating words that appear in the used name (i.e., Arizona becomes AZ). 

However, the following means of distinguishing your name from the name of an already-existing Arizona business entity do not qualify as sufficiently distinguishable: 

• Adding or changing punctuation within the name. 
• Changing letters from uppercase to lowercase or vice versa. 
• Changing “And” to “&” or vice versa. 
• Changing numbers to their equivalent words, or vice versa.

2. Designate a registered agent

Within your articles of organization (see next step), you will be asked to name a person or company as a registered agent for service of process (legal documents and government notices). A registered agent must be at least 18 years old and have a physical address in Arizona (P.O. boxes are not permitted). 

In addition, your agent must be able to receive service of process on behalf of the company, Monday through Friday, during regular local business hours. This means they must be present during all regular business hours at the address listed as the registered agent address, normally the company’s office. The registered agent must ensure timely notification of received documents or notices to the company so that nothing crucial gets lost, delayed or forgotten. 

You can appoint a person or registered agent service provider located in Arizona. If you appoint a person, they must not leave the office address listed during all regular business hours throughout the year. If this is not feasible for your company, consider hiring a registered agent service. Many LLC formation service providers offer this service for free.

For example, Inc Authority offers free registered agent services for one year when you use its LLC formation service. However, the best standalone registered agent services generally range from $90 to $300 per year. 

To learn more about the best registered agent services, read our Best Registered Agent Services of 2023 guide. 

3. Register with the state of Arizona

To register with Arizona state, you must create and file articles of organization for your LLC. LLCs must register with every state where they conduct business. In Arizona, you can register a domestic LLC online, by mail or by fax with the Arizona Corporation Commission. But the state says the “fastest, most convenient way to submit your documentation is by using the A.C.C.’s online services.” You will be asked to complete and submit Form L010i, its Articles of Organization form.

You can get help filling out your form by using the eCorp filing system. This system ensures that, as you fill out your articles of organization, you do so in a way that fulfills the requirements of the state of Arizona.

Filing your articles of organization with the state of Arizona requires a $50 filing fee for regular processing. It costs $85 for standard rush processing. Guaranteed rush filing will cost you an additional $100 to $400, depending on the time frame you choose for processing. If you file via the eCorp filing system, you can pay with a credit card online. 

Out-of-state LLCs must file an Application for Authority to Transact Business or Conduct Affairs. You can do so by filling out the CO18i form, then filing your application in person or by mail. You must pay a $175 filing fee and, if desired, rush filing fees ranging from $35 to $400, depending on the time-frame guarantee you choose. The address for mailing your documents and payment or filing and paying in person are available in the form’s instructions section.

New LLC reporting requirement alert 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new reporting requirement for all non-exempt LLCs starting on January 1, 2024. 

The requirement is called the Beneficial Ownership Information (BOI) report and it is estimated to only take about 20 minutes to complete. 

Here’s what you need to know:

• LLCs formed before January 1, 2024 have until January 1, 2025 to file.
• LLCs formed between January 1, 2024 and January 1, 2025 have 90 days to file from the confirmed date of the businesses’ registration.
• New LLCs formed after January 1, 2025 will have 30 days to file from the confirmed date of formation.

For all details, FAQs and to file, visit FinCEN’s BOI website. 

4. Create an operating agreement

An LLC operating agreement is a document that states the LLC members’ or manager’s rights, obligations and distribution of income. All members or managers must sign the operating agreement for it to be considered effective and valid. Although Arizona LLCs aren’t required to adopt or file a written operating agreement, it is strongly recommended to avoid future conflict. If your LLC does not have an operating agreement, it must default to state laws instead of members’ agreed-upon determinations regarding how the LLC will be run.  

An LLC operating agreement should include information such as the following: 

• How the LLC’s members make decisions.
• The LLC’s name and address.
• The LLC’s purpose. 
• The percentage of ownership among the members and member buy-out options.
• Profit allocations among members. 
• Whether the LLC will use the accrual or cash accounting method. 
• How the LLC can be dissolved.

There are many LLC formation companies that offer free operating agreements. Some even have templates and other tools to help simplify the creation process. 

Rocket Lawyer, for example, offers free operating agreements. You simply have to use its online widget to choose your state. Then, it will ask you a series of questions and use your answers to fill out its operating agreement template. From there, you must create a free Rocket Lawyer account, at which point it offers a fully filled-out printable and digitally-signable operating agreement for no cost to you. 

5. Publish your LLC

Unlike some states, Arizona requires you to publish an announcement of your LLC’s formation in an approved newspaper of the county in which the business was formed and within the first 60 days of formation. It must be published in at least three consecutive publications (runs) of the newspaper. If you formed your business in Pima or Maricopa County, the county will fulfill this requirement for you. Failure to fulfill this requirement will result in your LLC being dissolved.

To complete this step, first choose a newspaper that publishes within your county from the approved list of newspapers published on the Arizona Corporate Commission’s website. These publications know the publication standards you must meet and can guide you in meeting them. Check the pricing upfront as it will vary among publications.

For example, the Arizona Sun requires you to contact the publication to publish a legal notice, including a business formation notice. You can do so using the publication’s “submit a legal notice” form. In the notes section or when contacted, ask about pricing.

6. Get an Employer Identification Number (EIN)

LLCs with employees or multiple-member LLCs must obtain an Employer Identification Number (EIN). Single-member LLCs and those without employees aren’t required to get an EIN. The purpose of an EIN is to aid you in filing taxes and to aid the IRS in administering tax services for your business. This includes administering licenses you can use to withhold income taxes. Most banks require an LLC to have an EIN before opening a business bank account. 

Applying for an EIN from the IRS is free and can be done online using the IRS’s application portal. You  will need your name and social security number. You must also be an owner or controlling member of the LLC. You are required to apply in one sitting as you cannot save and return to the application later. Upon verification of your completed application, you will receive an EIN immediately. 

7. Register to pay taxes

Arizona LLCs must register with the Arizona Department of Revenue. LLCs opting to file taxes as a corporation must file a corporate income tax form with the state. All Arizona businesses must also pay sales tax on taxable products and services. Sales tax in Arizona is called a transaction privilege tax (TPT). In addition, if you have employees, you will need a license to withhold taxes from their income.

To apply for TPT and tax withholding for your company, download and fill out the Arizona Joint Tax Application (JT-1) form. Use your EIN and information about your company’s operations and management to fill out the form. Detailed instructions for filling out the form are provided at the end of the form.

On the bottom of the form, look for your county to find out how much the licensing fee will be. Expect to pay between $2 and $50 for licenses. You must make out a check payable to the Arizona Department of Revenue and record your Federal EIN or social security number on the check.

Once you’ve filled out the form, submit it to:

Arizona Department of RevenueP.O. Box 29032
Phoenix, Arizona 85038-9032

Allow three to five days for processing. Your license(s) will be mailed to the address you list on the application. 

8. Open a business bank account

Opening a business bank account is necessary to preserve the separate identity of your LLC from your personal finances. It also allows you to keep records of your business transactions to simplify tax filing. This can help with tax preparation around deductible business expenses and profit and loss figuring.

You must have your EIN and your Certificate of Business Formation in hand to open an LLC bank account. Simply visit a bank of your choosing and tell the banker you would like to open a business bank account. Then, supply the banker with your certificate and EIN. He or she will then walk you through the process of opening your account. 

Once your account is open, it’s best practice to funnel all payments received for goods and services through your business account. You should also only purchase items for your business using the funds in this account. Any personal debits or deposits should be processed via your personal bank account. 

Cost to start an LLC in Arizona

Starting an LLC in Arizona comes with some startup fees but they are not excessively expensive. Most fees range from free to $60. Here is a look at the minimum fees you should expect to pay. 

• Application to reserve a business name: For regular processing, expect to pay $10. For processing online (rush processing), you will pay $45. 
• Articles of organization filing fees: You will pay $50 for regular processing and $85 for rush processing. 
• LLC formation announcement publishing: The price for this service depends on the newspaper where you publish your announcement but can range from $60 to $300.
• Registered agent designation: You can designate yourself as the registered agent or someone within your organization for free. You can also hire a service to perform registered agent duties for you. These services range from free to $300 per year, depending on the service provider. 
• Tax licenses (TPT or employee withholding): These Arizona licenses cost between $2 and $50, depending on the county in which your business was formed and operates. 
• Opening a bank account: The price of this requirement depends on the bank you choose to host your account. For example, Arizona Financial Credit Union requires a minimum $100 deposit to open a small business bank account. 

Find the best LLC services for Arizona: Best LLC services of 2024

Arizona requirements for LLCs

At minimum, Arizona state requires LLCs to reserve a business name, register the LLC with the state, assign a registered agent, publish an LLC formation announcement, obtain a federal EIN and apply for state tax license(s). Here is a closer look at what these requirements entail. 

Distinguishable name reservation

Before you form your LLC, you must also submit a “distinguishable” name, which means it differs from the names of other Arizona businesses. In addition, the business name must contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C.”, “L.C.”, “LLC” or “LC.” You must reserve your entity name with the Arizona Corporation Commission, accompanied by a $10 filing fee and a $35 online processing fee. 

Arizona state LLC registration

LLCs in Arizona are required to register with the Arizona Corporation Commission. The process requires the LLC to submit articles of organization and pay a $50 filing fee. Out-of-state LLCs must file Form C018i (Application for Authority to Transact Business or Conduct Affairs) and pay a $175 filing fee.

Registered agent

LLCs must designate a registered agent with a physical address in Arizona. The registered agent must be able to receive service of process (legal documents and government notices) on behalf of the company, Monday through Friday, during all regular local business hours. This registered agent can be someone in the business, such as an owner or manager, who can be on the premises during all business hours, or it can be an outside service provider.

LLC formation published announcement

If you live in any county besides Pima or Maricopa counties, you must also publish an announcement of the formation of your LLC in an approved newspaper in the county in which you formed your LLC. The Arizona Corporate Commission offers a list of approved newspapers. Simply call or contact the chosen newspaper and ask to place a legal announcement for your LLC’s formation and they can walk you through the requirements and process.

Federal EIN 

You must obtain a Federal Employment Identification Number (EIN) before you can apply to pay taxes in Arizona. You can apply for this number on the IRS.gov website using your Social Security number and your name (if you are a controlling member of the LLC). 

State tax license(s)

Arizona LLCs must register with the Arizona Department of Revenue for a transaction privilege tax license/TPT License (Arizona sales tax) to sell products or services in Arizona. You may also have to file for a license to withhold income and unemployment taxes. This license is only necessary if you plan to or have hired employees.

To apply for these licenses, you must fill out the Arizona Joint Tax Application (JT-1) form, which is available for download on the AZdor.gov website. On it, you can choose to apply for one or both of these tax licenses, which range from $2 to $50.

Resources for Arizona LLCs

Do you need more information about starting an LLC in Arizona? Here are some additional resources to help you:

• Arizona Corporate Commission
• Arizona Department of Revenue 
• Arizona eCorp online portal
• Application to Reserve Limited Liability Company Name
• Arizona articles of organization
• Arizona Employment Taxes
• Schedule of Fees for Arizona Limited Liability Companies
• Arizona Joint Tax Application (JT-1) Form
• List of Approved Arizona LLC Announcement Newspapers
• Application for Authority to Transact Business or Conduct Affairs (for foreign LLCs)

Frequently asked questions (FAQs)

What is an LLC?

An LLC (or limited liability company) is a formal business structure with the liability protections of a corporation but without the higher costs and complicated compliance requirements. Owners of LLCs are not personally liable for any debts or financial obligations of the company. 

Single-member LLCs, however, often file taxes as a sole proprietorship, meaning taxes incurred by the business are paid by the owner via personal tax filings.

Can I set up an LLC for free in Arizona?

It’s relatively inexpensive to start an LLC in Arizona. LLCs located in the state pay $50 to file their articles of organization. Out-of-state LLCs (foreign registration) pay $175 to file articles of organization. To reserve a business name for 120 days, the fee is $10 to $45. Tax licenses in Arizona, such as a sales tax license, range from $2 to $50. You must also run your formation announcement in the local newspaper, which could cost between $60 and $300.

Some business formation service providers will even help you form your LLC for free.

Do Arizona LLCs pay taxes?

Yes, LLCs in Arizona that elect to be taxed as corporations must file an Arizona corporate income tax return and pay corporate taxes. For single-member LLCs that are considered disregarded entities, their taxes are included on the owner’s personal tax return. In addition, most Arizona LLCs must pay Arizona TPT taxes (sales tax). Those Arizona LLCs that have hired employees must also pay income withholding and unemployment taxes.

Do I need a registered agent in Arizona?

Arizona LLCs must designate a registered agent. A registered agent must be at least 18 years old and have a physical address in Arizona (not a P.O. box). They must be on premises to receive service of process (legal documents and government notices) on behalf of the company, Monday through Friday, during regular local business hours. Businesses either appoint an owner or employee as the registered agent or hire a registered agent service provider.

Do Arizona LLCs need to file an annual report?

Arizona LLCs aren’t required to file an annual report. However, if your Arizona LLC has any changes — such as a new address, different managers, members or registered agent — you must file an Articles of Amendment form with the Arizona Corporation Commission.

How do I dissolve an LLC in Arizona?

To dissolve an LLC in Arizona, you must file an Articles of Termination form with the Arizona Corporation Commission and pay a $35 filing fee. You can either file in person or mail your completed form and payment to the address specified in the form instructions.