One of the first things you must do if you’re thinking about opening a business in Arizona is create a Limited Liability Company (LLC). A common business form that shields owners from personal liability and enables pass-through taxation is an LLC. However, creating an LLC has a price. We will address the issue “How much does it cost to open an LLC in Arizona?” in this post and offer additional details on creating an LLC in Arizona.
You must submit Articles of Organization to the Arizona Corporation Commission (ACC) in order to establish an LLC there. Your LLC’s name and address, the name and address of your registered agent, and the names and addresses of your LLC’s members must all be provided. Articles of Organization can be submitted online or by mail. A $50 online filing fee and a $85 mail-in filing fee are required.
You must request an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) after submitting your articles of organization. An EIN is a distinct nine-digit number that serves as your company’s tax identification number. Applying for an EIN is possible online, over the phone, or by mail. An EIN can be obtained for free.
Depending on the filing type, Arizona’s LLC creation processing times change. Your articles of organization will normally be processed within 3-5 business days if you submit them online. The formation of your LLC could take up to 10 business days if you file by mail.
You could also require an Arizona business license in addition to creating an LLC. In Arizona, the cost of a business license varies according to the city or county where you plan to conduct business. A business license may not be needed at all in some cities and counties. For instance, a company license in Phoenix costs $100 annually. For detailed information on the prerequisites and fees for business licenses, get in touch with the licensing office in your city or county.
Because it permits pass-through taxation, an LLC is frequently regarded as a more advantageous tax choice than other business forms. In other words, the income and losses of the LLC are transferred to the owners’ individual tax returns and are then taxed there at their individual tax rates. When profits are paid as dividends, they are taxed twice: once at the company level and once at the individual level. However, the tax advantages of an LLC may differ depending on your unique situation, so it’s crucial to speak with a tax expert.
Finally, there is a $50 online filing fee or a $85 mail-in filing fee for the Articles of Organization, as well as a possible business license fee depending on your city or county. In Arizona, the processing period for forming an LLC ranges from 3 to 10 business days. The tax benefits of an LLC can vary depending on your individual circumstances, although they are frequently preferable to other business arrangements. Overall, setting up an LLC in Arizona might offer you protection from personal liability and possibly advantageous tax status for your company.