Admit it or not, financial obligations are among the many factors that new business owners must consider when they form an LLC. From filing legal documents up to acquiring business licenses, losing track of current expenses is a dilemma that’s hard to ignore. In this post, our experts will discuss all Arizona LLC fees you need to cover to maintain your limited liability protection.
Formation Costs for an Arizona LLC
Business Name Reservation
Before you can accomplish your Arizona LLC articles of organization, you’ll need to select a distinct business trade name to represent your company. Depending on the evaluation of the Arizona Corporation Commission (AZCC), your request will be granted as long as no other business entity carries the same LLC name.
To avoid delays and possible trademark issues, our trade experts recommend going through the state’s public database to check if no other Arizona LLCs operate under the same name. Although this procedure is free of charge, you can reserve the LLC name up to 120 days before the LLC formation process for a $45 online filing fee or $10 for mail submissions.
Keep in mind that Arizona law requires any entity to include the words “LLC” in their business name. You also have the option to file for a DBA Trade Name Application when you form your Arizona LLC for another $10 fee.
Articles of Organization
Your LLC’s articles of organization are among the first filings you need to prepare when you form an LLC in Arizona. This form should include all the details about the business structure, LLC owners, statutory agent acceptance form, registered agent address, and many more.
Upon the completion of your articles of organization, you can send via mail to the Arizona Corporation Commission at Corporate Filings Section, 1300 W. Washington St., Phoenix, along with a regular filing fee of $50.
If you can’t find time to mail it, you can try submitting your articles of organization online. It can also be processed within 24 hours by paying expedited services, which costs another $35 on top of the registration fee.
Notice of LLC Formation
After submitting articles of organization to the office of the Arizona Corporation Commission, the next requirement in the LLC formation procedure is publishing an announcement referencing your entity’s official establishment within the state.
Even small business owners operating in the state must comply with the Arizona LLC publication requirement. This public notice in the print newspaper should have your LLC name, file number, statutory agent address, and member information.
The publication requirement for an Arizona limited liability company costs around $30 to $300. However, if your principal address isn’t located in Pima or Maricopa counties, there’s no need to adhere to this policy.
Operating Agreement
Aside from submitting Arizona articles of organization and electing a reliable statutory agent, curating a comprehensive LLC operating agreement could pose perks to your company in the long run.
Although operating agreements aren’t a mandatory internal document when you form an LLC, this file serves as an outline of all the ownership terms, rights, obligations, and management decisions an entity must follow throughout its operations.
Curating an operating agreement doesn’t entail any costs if you create it yourself. However, considering the legal significance of its content, hiring a professional service to draft one for your Arizona LLC is a decision we highly recommend.
If you think seeking a lawyer is costly, try signing up for an LLC formation service or website that offers to create an operating agreement on your behalf along with other features to support your business compliance. The price range for these packages varies depending on the scope of your requests.
EIN Registration
For your registered agent to be served with proper tax notices and demands from the state government, your Arizona LLC must acquire an employer identification number (EIN) or most commonly known as Federal Tax ID Number.
Besides its role in tax documents, this nine-digit requirement is needed when opening a business bank account or hiring employees for your LLC in Arizona. Typically, you can process an EIN for free through their website, but expect additional fees if you ought to seek assistance.
Business License
Obtaining a business license is among the most crucial Arizona LLC fees you must settle to keep your right to operate within the state. Whether you’re located in an unincorporated area like Maricopa County, there are specific licensing laws you must follow with no exceptions.
You can check with the Arizona Department of Commerce Licensing Guide regarding the state permits you must acquire. Keep in mind that license fees highly depend on the nature and location of your business.
For companies that operate through selling products, you’ll be required by the state to apply for a transaction privilege tax license from the Department of revenue.
Statutory Agent
Electing a reliable Arizona Statutory agent for your LLC is a crucial step in maintaining good standing with the state. As you may already know, this role keeps your Arizona LLC compliant with the requirements of the state.
Your LLC’s statutory agent can be an individual or a company providing registered agent services, as long as they meet the standard set by the government [1].
Although you can act as your own statutory agent and dispel any charges, the obligation to track notices and demands is more complex than you’d think. As a result, there are times when this role is better handled by a professional statutory agent service provider. Not only does it ensure you get all the documents on time, but it also secures your LLC’s actual physical street address.
When you hire a registered agent service for your Arizona LLC, its monthly/annual fees will add up to your business maintenance expenses as well as LLC formation cost depending on the features you decide to purchase from their service packages.
Foreign LLC Registration
If you’re a foreign LLC intending to expand in Arizona, you need to file registration documents through A.C.C. eCorp page. Compared to domestic companies, these filings cost $150 for mail submissions and $185 for online applications.
LLC Formation Services
Running a business is already hard enough, so it’s not surprising why some owners opted to sign up for an LLC formation package to handle all their state filings efficiently. On top of that, these providers also include statutory agent services in their plans to help their clients maintain state obligations.
The expenses for these LLC professional formation services range from $0 to $300, depending on the features you chose to include in your subscription.
Other Taxes
Arizona LLC taxes are among the list of obligations you must fulfill to keep your personal assets protected from business disputes. As pass-through entities, the company is not obliged to file corporate tax returns. Instead, all profits and losses will be taxed through the personal tax returns of all LLC members.
There are certain taxes you must pay depending on business transactions conducted by your company, such as employer tax if you hire employees or Arizona transaction privilege tax if your company sells products.
The taxes you’ll be required to pay also depends if you elect your business to be taxed as a sole proprietorship, C-corporation, or S-corporation.
(For more accessible options, hiring the best online incorporation providers is a good choice)
Arizona LLC Annual Fees
Arizona is among the few states that don’t require annual reports to maintain your LLC. All you need to do to keep your operating rights are to comply with the registered agent rights and tax obligations.
FAQ
How much does an LLC cost in Arizona?
An LLC in Arizona costs around $50 to $300, which includes fees on filing your articles of organization and publishing notice of formation except LLCs in Maricopa or Pima counties. If you choose to seek professional assistance on your incorporation submissions, expect additional expenses in your monthly or annual fees.
How are LLCs taxed in Arizona?
LLCs in Arizona are taxed as pass-through entities. This taxation term means that your company isn’t required to submit corporate tax returns, and all your profits and losses will be incurred separately in each LLC member’s personal returns. There are also specific taxes imposed on businesses with two or more employees and companies selling merchandise.
Do I need to renew my LLC in Arizona?
No, you don’t need to renew your LLC in Arizona. In fact, you’re not required to submit reports every year, unlike in other states. However, every change in your company address and other business details costs about $5 for every filing. Aside from that, you’ll have to consistently pay taxes to maintain good standing with the state.
Conclusion
Now that you’re well-informed about all the Arizona LLC fees you need to settle, the next step you should do is go ahead and commence with your filings. Although our trade experts salute your hands-on effort, keep in mind that there’s no shame in seeking assistance from service providers to smoothen out your formation and avoid all possible legal lapses.
To have a full understanding of LLC formation expenses, you can also check out the list below:
