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

Published by Delina Chantel Yasmeh | Author

Last updated: September 19, 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 Arizona, 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

Cost to Start an LLC in Arizona

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 [1].

However, for clients who want to start their businesses as soon as possible, I avail of the $80 expedited service.

According to the Arizona Corporations Commission, approximately 60% of LLC applicants choose the expedited service, highlighting its popularity among entrepreneurs eager to start their businesses promptly.

Other options include the following:

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

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

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)

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).

"Naming your Arizona Limited Liability Company comes at no cost, as the AZCC does not mandate filing a Name Reservation or similar process."

- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter

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.

According to the Arizona Corporations Commission, about 40% of LLCs choose to file this voluntary report, demonstrating a commitment to transparency and good governance.

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)

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.

6. Certified Document Copies ($15+$0.50 per additional page - Optional but Recommended)

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.

7. Employer Identification Number ($0 - Optional but Recommended)

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.

8. Operating Agreement (Optional but Recommended)

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 yourself to draft an operating agreement. 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.

9. Premium Business Insurance (Depending on the Line of Business - Optional but Recommended)

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

References:

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