Do you want to start a business in Arizona? If you need to form an LLC or a corporation- even a non-profit- we can help you get started. We can help you form a business; prepare partnership contracts; and get your EIN number from the I.R.S., so that you can get a bank account and start cashing checks!
Arizona is a great place to start a business. The process of forming a new business could be confusing to those with less experience. If you already have an idea for a business, but don’t know where to start, we are here to help you get started.
The first thing that you need to do is choose a name. Make sure that name is not being used by someone else as this can lead to serious legal consequences if this happens. If the name that you would like to use is not in use, then you may want to purchase a domain name for your website now. You can also wait until a later time to do it.
Next, you will want to form a legal entity. Forming an entity like an LLC or a corporation allows the owners of such entities to be protected in some cases. For example, a legal entity is responsible for any liabilities that incur including any business debts. They are also pass-through tax entities which mean the owners of such entities are only taxed for their income once?
After choosing an entity type, the next step is to check it’s availability with the Arizona Corporation Commission(A.C.C.). You can go to the A.C.C. website to check the availability of the name. To secure the name, you then need to register the name or reserve it through the same website. A name reservation is only good for 120 days. If you reserve a name, there is a hold on the name until you file the paperwork or until the hold runs out.
Once the A.C.C. approves your paperwork, there are a handful of other things you may want to do. You might need to complete a transaction privilege tax application with the Arizona Department of Revenue. You should contact A.D.O.R. either way as we cannot give you advice.
You also may want to check with the Arizona Commerce Authority Small Business Services to see if you need any business or occupational licenses. We cannot give you advice on this matter so you should check their website. You should also check this website or the website for the Internal Revenue Service(IRS) on information on obtaining an EIN (employer identification number) or TIN (tax identification number).
The most challenge part of this process, aside from filing the correct paperwork, is choosing which entity you would like to form. The most common are LLCs or limited liability companies, corporations, limited partnerships or general partnership. Most people have a hard time choosing between forming an LLC or a corporation.
While we cannot give you advice on this matter, we can explain the differences between each entity. LLCs or limited liability companies can have an unlimited number of members or shareholders, and corporations can only have 100.
Non-US citizens/residents can be members of LLC while corporations may not have members who are non-US citizens. LLCs can be owned by other LLCs or corporations, corporations cannot. LLCs
can have subsidiaries without restrictions as well.
Corporations have numerous formalities attached to them as well, requiring them to issue stock and to hold initial and annual director and shareholder meetings, and they must keep meeting minutes with corporate records. An LLC has far fewer formalities to worry about in terms of ongoing upkeep. LLCs can be run by managers or the owners, there are no formal guidelines that LLCs need to meet in terms of daily operations and management. A corporation is required to have annual meetings of theboard of directors.
In terms of taxation at the federal level, corporations must file taxes under the subchapter C of the Code or under the S chapter of the Code. An LLC, however, has four options. Income taxation for an LLC can be filed as a sole proprietorship, if there is only one member, under the subchapter K of the Code as a partnership, under the subchapter K of the Code as a partnership, under subchapter C of the Code as a “C corporation” or finally under the subchapter S of the Code.
Per the A.C.C.s statistics, 2015 there were almost ten times LLCs formed compared to corporations. While we cannot give you advice on which to form, it is clear that Arizona residents have a preference.
This entire process can be very complicated. Many inexperienced people file incorrect paperwork and end up costing themselves much more money than they need to spend. Additionally, corporate lawyers will charge you thousands of dollars for the entire process. Affordable Family Law has the experience to help you file all the proper paperwork at a much better rate. Our $299 package includes preparation of all the documents needed to form your LLC, as well as the fee for publication of your Articles of Incorporation.
Our fee does NOT include the Arizona Corporation Commission’s filing fees. Current fees are $50 for regular 30-day processing or $85 for expedited processing. If you’ve been thinking about starting your own small business but don’t know where or how to start, contact us right away so we can begin the process.