How Much Does an LLC Cost in Arizona (Filing Fees Explained)

Delina Chantel Yasmeh
Published by Delina Chantel Yasmeh | Author
Last updated: February 5, 2024
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Creating an Arizona LLC is one of the smartest moves you can make for your company. It not only offers members liability protection but also provide a transparent management process.

As a Mergers and Acquisitions specialist and a Master's Degree holder in tax law, I assisted multiple businesses and individuals in forming their LLCs and creating joint organizations.

Working with our business experts in Arkansas, we conducted research to summarize the LLC requirements and costs to provide a detailed guide on the fees associated with forming a business in the state.

Quick Summary

  • The cost to start an LLC in Arizona is $50 for filing the Articles of Organization and $60 to $300 for the publication requirement.
  • Upon approval of the business, additional expenses include a registered agent service, licenses, taxes, and other documents.
  • Arizona is a good state to start an LLC due primarily to the low cost of maintenance and taxes, and minimal requirements.
  • When clients or colleagues start an LLC in Arizona, I inform them that it is one of the states that require a publication of notice.


Cost to Start an LLC in Arizona

Business man checking money in his wallet

To legally conduct business in the state, there are mandatory fees and optional expenses you have to cover, which include the following:

1. LLC Formation Filing Fee ($50 - Mandatory)

Submit the Arizona Articles of Organization along with the $50 filing fee to the Corporations Commission to incorporate your LLC formally.

The standard LLC processing time in Arizona is 13-15 business days. However, for clients who wanted to start their businesses as soon as possible, I avail of the $80 expedited service.

Other options include the following:

  • $100 - next day approval
  • $200 - same-day delivery
  • $400 - 2-hour processing [1]

2. LLC Publication Requirement ($60-$300 - Mandatory)

A young business man working on his laptop

Few states, including Arizona, require newly formed LLCs to issue a legal notice in a daily newspaper.

After your LLC in Arizona is authorized, the state will send you the Notification of LLC Creation form, which you must fill out for the local newspaper. You have 60 days from your LLC's formation to complete this.

The local newspaper will give you an Affidavit of Publication when your publishing notice has appeared there for three weeks in a row, attesting to the completion of the statutory notice period.

Based on the newspaper, publishing costs range from $60 to $300 for this notice to appear in 3 back-to-back editions.

But, if your statutory agent is based in Pima or Maricopa Counties, you can avoid paying for LLC publishing. This is because the ACC in these counties will publish a notice on your company's behalf.

3. Registered Agent Service Fee ($80-$300 Annually - Optional)

A business man hiring a registered agent service in Arizona

Every Arizona LLC are required to appoint a statutory agent or a registered agent to receive service of process on behalf of the company. To avoid having to pay a registered agent service, you can act as your own agent or designate a qualified LLC member.

For new business owners, I advise them to hire a professional for at least the 1st year of operations to familiarize yourself with the functions and duties of the position.

You will pay a yearly price of $80-$300 depending on the Arizona statutory agent service you collaborate with.

4. Name Reservation Fee ($10 - Optional)

Fill out an Application to Reserve Limited Liability Company Name and submit it to the Corporation Commission to reserve the name for a maximum of 120 days.

Arizona charges $10 for standard processing and $45 for expedited processing (the $45 expedited cost is automatically applied to online submissions.)

Expenses Following the Approval of Your LLC

Here are all the other filing costs of incorporating an LLC in Arizona.

1. Transaction Privilege Tax (TPT) License ($12 - Mandatory)

LLCs that do commercial activities in Arizona must apply for a TPT license, which costs $12 per place of business plus additional fees for each city where the LLC conducts business [2].

A client of mine had to submit the Arizona JT-1 Application to the Department of Revenue to apply for this license. Arizona's transaction privilege tax rates fluctuate by county and kind of enterprise.

You should also submit an application for local business licenses based on where your company is located. Local business licensing requirements and costs vary by city and county. For instance, Tucson charges $25 annually for a standard business license.

2. Taxes (Depending on Income Bracket - Mandatory)

All Arizona LLCs are, by default, pass-through organizations; only the members' income taxes need to be filed, which ranges from 2.59% to 4.5%, depending on your tax rate.

But, if you've chosen to tax your Arizona LLC as a corporation, it will be responsible for paying 4.9% corporate income tax.

Inasmuch as Arizona allows LLCs to choose on how to be taxed, I recommend that new business owners opt for pass-through taxation to avoid subjecting their company to corporate taxes.

3. Annual Reports ($45 - Optional)

LLC costs less in Arizona because annual reports are not state-mandated. However, if you want to keep your Arizona LLC in good standing, you can submit a yearly report, sometimes referred to as a statement of information.

You can file online at the Arizona Corporations Commission's website for a $45 filing fee.

4. DBA Name ($10 - Optional)

Any name that a firm uses that isn't its registered name is referred to as a Doing Business As (DBA) or a trade name.

When I helped a client filed for a DBA, we submitted a trade name application, which costs $10, to the Arizona Secretary of State. The name is valid for 5 years, and it has to be renewed after the period.

Before submitting your papers, check the Arizona Secretary of State's website to determine if your trade name is already registered by someone else.

5. Certificate of Good Standing ($10 - Optional)

A business man reading some documents from a brown envelope

Arizona Department charges $10 for a Certificate of Good Standing at a standard processing rate. But if you want it sooner, you can pay $45 for expedited shipping.

A Certificate of Good Standing is a legal document that attests to your LLC's existence and timely state filings.

Typically, a Certificate of Good Standing is needed for the following:

  • Get financing and business loans
  • Conduct commercial activities outside of Arizona
  • Get commercial insurance
  • Establish a business bank account

Filing a paper Records Request Form or applying online through eCorp will get you an Arizona Certificate of Good Standing.

Arizona charges $15 plus $0.50 per page for a certified copy of LLC paperwork. You can get a certified copy by mailing or visiting the Arizona Corporation Commission with a Records Request Form.

I always keep certified copies on file for reference and legal purposes.

I was able to obtain an EIN at no additional cost when I applied through the IRS website. The EIN is necessary to open a business bank account, avail of financial assistance, or hire employees in the future.

The operating agreement specifies the rules and regulations governing your business. It outlines the management structure of the LLC, rights and responsibilities of the members, how profits and losses are distributed, and voting requirements.

There is no associated cost for drafting an operating agreement by yourself. However, I advise clients to hire a lawyer to ensure the document's legality or employ an online LLC formation service, which costs $100 to $200.

A business man counting money on his office desk

If your Arizona LLC hires staff, you must get workers' compensation insurance from a private insurer. The typical workers' compensation rate for masons is over $8 for $100 of covered income but only about $0.15 per $100 of payroll for medical professionals.

FAQs

What is the Penalty For Paying My Taxes Late In Arizona?

The penalty for paying your taxes late in Arizona is 0.5% of the tax due per month.

What Are the Penalties For Late Filing Fees Payment in Arizona?

The penalties for late filing fees payment in Arizona include sanctions, administrative LLC dissolution, and higher interest charges.

Do You Need Professional Help with Your Arizona LLC?

Forming an LLC can be complicated because of the intense paperwork filing.

However, using any of these best LLC services in Arizona can make the entire process more straightforward and less stressful.

These authentic websites can guide you through the procedure step-by-step, offering professional advice along the way to make sure that each stage is completed hassle-free.


References:

  1. https://www.azcc.gov/corporations/same-day-next-day-services
  2. https://azdor.gov/transaction-privilege-tax/tpt-license

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