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Forming a limited liability company (LLC) in Arizona offers business owners the advantages of limited liability protection and operational flexibility. This article provides a detailed, step-by-step guide to help aspiring entrepreneurs navigate the process of establishing an LLC in Arizona, including specific information on costs associated with each step.

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Step 1: Select a Name for Your LLC

Select a name for your LLC that complies with Arizona's naming requirements. It must include the words "Limited Liability Company" or their appropriate abbreviations, such as "LLC," "L.L.C," "L.C.," or "LC." For professional LLCs, the name should include "professional limited liability company" or the abbreviations "P.L.L.C.," "P.L.C.," "PLLC," or "PLC." Check the availability of your chosen name by searching the Arizona Corporation Commission business name database. To reserve an available name for 120 days, file an Application to Reserve Limited Liability Company Name with the Arizona Corporation Commission. The filing fee is $10 for mail submissions or $45 for online submissions ($10 filing fee + $35 expedite fee).

Using a trade name (DBA) is optional. To register a trade name online, a fee of $10 is required. Note that registration does not confer legal rights but alerts others that the name is in use in Arizona.

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Step 2: Designate a Statutory Agent

Every Arizona Single-Member LLC (SMLLC) must have a statutory agent, also known as a registered agent, to accept legal papers on behalf of the LLC. The statutory agent can be an individual, a domestic corporation or LLC, or a foreign corporation or LLC authorized to do business in Arizona. The agent must be a permanent, full-time Arizona resident with a physical street address in the state. Complete and submit the Statutory Agent Acceptance form with the Articles of Organization to appoint a statutory agent.

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Step 3: File Articles of Organization

To officially create your LLC, file the Articles of Organization with the Arizona Corporation Commission. The Articles of Organization must include the following information:

• Checked box indicating whether the LLC is a regular LLC or a professional LLC.
• LLC's name.
• Description of services for professional LLCs (if applicable).
• Statutory agent's name and address.
• LLC's business address.
• Indication of whether the LLC will be member-managed or manager-managed.
• Signature of the LLC's organizer.

You can file the Articles of Organization online or by mail. The filing fee is $50, with an additional $35 fee for expedited processing.

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Step 4: Create an Operating Agreement

Although not mandatory, it is highly recommended to draft an LLC operating agreement. This internal document outlines how the LLC will be managed, including the rights and responsibilities of members and managers. An operating agreement helps preserve the limited liability status and provides clarity on the company's operations. The operating agreement does not need to be filed with the Articles of Organization.

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Step 5: Publication Requirements

LLCs located in Maricopa or Pima counties are exempt from newspaper publication requirements. The Arizona Corporation Commission publishes LLCs formed in these counties on its website, satisfying the publication requirement. However, for LLCs in other counties, publishing a Notice of LLC Formation in a newspaper of general circulation is necessary within 60 days after the Articles of Organization approval. The notice must be published for three consecutive publications. No affidavit of publication is required.

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Step 6: Other Requirements

Additional tax and regulatory obligations may apply to your LLC:

• Employer Identification Number (EIN): If your LLC has multiple members, employees, or elects to be taxed as a corporation, you must obtain an EIN. Apply for an EIN online through the IRS website. There is no filing fee.
• Business Licenses: Depending on the business type and location, your LLC may require local and state business licenses. Check with the relevant city or county for local licenses and consult the Arizona Department of Commerce Licensing Guide for state licenses.
• State Taxes: Register with the Arizona Department of Revenue if your LLC needs to collect sales tax or has employees. Registration can be completed online or through paper filing (Form JT-1/UC-001, Arizona Joint Tax Application).

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By following the step-by-step instructions outlined in this comprehensive guide, entrepreneurs can effectively establish an LLC in Arizona while understanding the specific costs associated with each stage of the process. Remember to consult professionals or seek legal advice as needed to ensure a smooth and successful formation of your LLC in Arizona.