Starting a Limited Liability Company (LLC) in Arizona can be an exhilarating but nerve-wracking experience. On the one hand, you get to be in charge of your own success. On the other, you’re also responsible for all the Arizona LLC fees and required paperwork.
While there are multiple costs to consider, we’ve compiled them in this post so that you know exactly how much each item will cost you and when.
In this post, we’ll discuss:
Are you ready to obtain your LLC license and enjoy the personal asset protection, tax incentives, and many other benefits that come with it?
Let’s get started.
Reserving Your Business Name
Arizona is home to more than 550,000 small businesses, so you’ll want to make sure your desired business name is still available. Go to the State of Arizona’s government website and conduct a business entity name search. If it’s available, you can reserve your business name for $45 ($10 filing fee plus $35 expediting fee), and it’s effective for 120 days.
You don’t have to reserve your business name, but you probably should. If another company reserves a name comparable enough without your knowledge, it can cause a real headache. Most business owners find that spending $45 to reserve their name is great for peace of mind.
According to AZCC.gov, the expedited fee gets charged automatically because you’ll obtain your name reservation immediately. However, if you don’t want to pay the $35 fee, you can “submit a paper Application to Reserve Corporation Name or an Application to Reserve Limited Liability Company Name.”
As an LLC, your organization must include “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” as part of its name. In Arizona, you cannot include the words “corporation,” “incorporated,” “association,” or an abbreviation of any of these words.
You should also use the Trademark Electronic Search System (TESS) database to make sure your business name is available here as well. If another company uses that name, you risk infringing its existing trademark.
Business owners commonly use their LLC’s name to establish name recognition. However, if you prefer to use a different name during everyday conversation, you can also get a “Doing Business As” (DBA) name. The filing fee for an Arizona DBA name is $10.
Also, look up your business name’s URL availability. If another business uses that domain name, it may be harder for customers to find you online.
Arizona LLC Filing Fees: Your Articles Of Organization
The term “articles of organization” may sound intimidating, but they aren’t. These are the legal documents that detail basic information about your LLC. To complete your articles of organization, you will need to provide the following information:
You probably know most of this information already, but double-check just to make sure. If you fill your articles of organization out incorrectly, you may run into legal trouble down the road.
The filing fee for your articles of organization is $50, or $85 for expedited service.
Operating Agreement Costs
Your operating agreement is a document that outlines the rules and regulations of your organization. Even though Arizona doesn’t require LLCs to have one, all businesses should—regardless of their size or structure. Even if you’re a single-member LLC and have no employees, an operating agreement is a good business practice.
If you end up in a legal or financial dispute and you don’t have an operating agreement that defines how things should be run, it may be decided by the courts. That may not be beneficial for anyone involved or for the LLC itself.
Your operating agreement should include:
Operating agreements cost $0 to draft. However, some websites will offer to help you draft one for $50 - $200. You can also ask for an attorney’s help, but they’ll likely charge more.
Statutory Agent Fees
Your statutory agent (sometimes called a registered agent) is a person or commercial entity responsible for receiving and handling legal, government, and other correspondence on behalf of your LLC. They need to have a physical address in Arizona, not just a P.O. Box.
When you become an official LLC, this physical address gets made public knowledge. For that reason, many businesses choose to use a commercial entity as their statutory agent for additional privacy. If you choose someone in your organization to be your statutory agent, it’s free. However, if you decide to work with a statutory agent service, you can expect to pay about $125 per year.
Business License Fees In Arizona
Good news! You don’t need an official business license in the state of Arizona. However, some cities and towns in Arizona may require you to obtain one of their business licenses in order to operate in their municipality. Check with the city or town you’re conducting business in to determine their requirements. This cost will vary.
Sales Tax Registration Fees
In Arizona, you must register for a sales tax permit in every location you’re conducting business in. The state charges $12 for each permit, and then counties charge between $2 and $50 for local sales tax permits. These licenses are valid for one calendar year and must be renewed annually by January 1st.
You need to include:
Depending on the situation, you may also need to provide employee information, unemployment tax information, and bonding requirements.
Announcing Your LLC Formation
Arizona is one of the three states that requires you to announce your LLC formation in a local newspaper. Nebraska and New York are the only other two states that require this. Typically, this announcement should cost you between $60 and $300.
Arizona LLC Annual Fees
Good news! While Arizona requires you to publish your LLC formation in a local paper, you don’t have to pay annual fees in the Grand Canyon state. This is a huge cost savings, especially compared to some states. For instance, Massachusetts LLC fees are $500 every year, while Tennessee LLC fees are $300 plus an additional $50 for each partner or owner up to $3,000!
Total Cost Of Arizona LLC Fees
Here’s the full breakdown of Arizona’s LLC fees and how often you should expect to pay them:
Business name reservation
$45 ($10 to file, $35 to expedite)
DBA name designation
Articles of organization filing fee
$50 regularly, $85 expedited
Operating agreement costs
$0, or between $50 - $200
Statutory agent fees
$0, or around $125
Business license fee
Sales tax registration fees
$12 per location + county
LLC formation announcement
$60 - $300
Still have more questions about the LLC fees for Arizona or just questions about LLCs in general? We’ve got answers!
It doesn’t matter if your LLC includes one person or one hundred. The costs will be identical to the requirements to get your LLC license.
Typically, the state in which you’ll be doing business is where you should start your LLC. However, certain states come with extra benefits. For example, Delaware LLC fees may be less than most other states because the state has no sales tax.
Paying yourself from an LLC is really easy. Simply transfer a portion of your organization’s cash reserve from your business account to your personal account. If you’re dividing funds among multiple LLC members, do so based on what you decided on in your operating agreement or via any other document you’ve read and signed.
There are plenty of reasons why business owners choose to work with a statutory/registered agent besides privacy benefits. You’ll enjoy the convenience of having fewer administrative chores, and all your business filing and documents will be stored safely and securely in one place. You’ll have peace of mind because your agent will be on top of any legal notices that could come your business’ way, which makes remaining in good standing easier. Also, if you don’t reside in Arizona, the agent service you hire will fulfill the requirement of needing a physical address in the state.
According to the ChamberofCommerce.org, the three best statutory/registered agent companies in Arizona are:
Conclusion: What Are Arizona’s LLC Fees And How Much Do They Cost?
Are you ready to form an LLC in Arizona and enjoy all the fantastic benefits you’ll have as a business owner? By identifying and understanding how much it will cost to start and maintain your LLC, you’re on your way to running a successful organization!
Are you ready to capitalize on that success? Check out The Lazy Man’s Guide to Living The Good Life, and discover how to optimize your chances of running a thriving business!