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Last Updated on September 24, 2024 by Dr. Gabriel O’Neill, Esq.
Starting a new business is both exciting and rewarding, but the process of registering your business in Arizona can feel overwhelming. With various steps and key decisions to make, it’s normal for entrepreneurs to feel a bit intimidated. However, registering a business in Arizona doesn’t have to be complicated.
In this blog post, we’ll guide you through the registration process step by step, offering helpful insights and resources to simplify the journey. Whether you’re starting a new business or formalizing an existing one, this guide will walk you through seven easy steps to help you navigate the process with confidence.
If you still have concerns after reading this guide, don’t worry! We’ve also included a list of top business registration services, like ZenBusiness, to take care of the process for you, giving you peace of mind as you start your business venture in Arizona.
How to Register Your Business in Arizona in 7 Simple Steps
Registering a business in Arizona is straightforward when you know what to do. Follow these 7 steps to get your Arizona-based business up and running as quickly as possible.
Step 1: Choose Your Business Structure
Selecting the right business structure is crucial, as it depends on the nature of your business and your growth plans. In Arizona, there are different types of incorporated and unincorporated businesses to choose from, each with its unique features and functions.
Keep in mind that you’ll only need to register your business with the Arizona Corporation Commission if you choose a structure that requires incorporation, such as the following.
Sole Proprietorship
A sole proprietorship is the simplest business structure in Arizona, where the owner and the business are legally considered the same entity. This means the owner is personally responsible for the business’s debts and liabilities. It’s easy to set up and has minimal legal and administrative requirements. In Arizona, you don’t need to register your sole proprietorship with the state, but you may need to obtain local permits or licenses.
General Partnership
A general partnership is a business owned by two or more people who share in the profits and losses. Each partner is personally liable for the business’s debts and legal obligations. In Arizona, you don’t need to register a general partnership with the state, but you may need to file a “Certificate of Registration” (DBA) in the county where your business is located.
Limited Partnership (LP)
In Arizona, a limited partnership consists of one or more general partners who manage the business and have unlimited personal liability and one or more limited partners who provide capital but have limited liability. To create an LP in Arizona, you must file a “Certificate of Limited Partnership” with the Arizona Corporation Commission.
Limited Liability Company (LLC)
An LLC is a flexible business structure that combines the liability protection of a corporation with the tax benefits and simplicity of a partnership. In Arizona, you need to file “Articles of Organization” with the Arizona Corporation Commission and create an Operating Agreement to outline the company’s management and ownership structure. Here’s how to start an LLC.
Corporation
A corporation is a legal entity separate from its owners (shareholders) that offers limited liability protection. There are two types of corporations in Arizona:
- C-corporations
- S-corporations
To create a corporation in Arizona, you must file “Articles of Incorporation” with the Arizona Corporation Commission, depending on your business type. Corporations require more formalities, such as creating bylaws, issuing stock, and holding regular board and shareholder meetings.
Choose the business structure that best suits your needs based on liability protection, taxation, and management requirements. Consult with a legal or business professional if you need assistance in making this decision.
Step 2: Select a Unique Business Name
In Arizona, there are three ways that you can name your business: by registering a legal entity name, a trademark, or by registering a legal name and operating under a different one. Naming rules and regulations differ from state to state, so you’ll need to check the requirements for Arizona.
Similar to incorporating your business, the route you choose for naming your business in Arizona will depend on your entity’s needs and circumstances.
You may want to follow all three routes so that no one else can use your name, but you can also simply choose one of the three options. Although it’s not a requirement, it will probably make sense for you to use the same name for each registration method.
Let’s take a closer look at each of the naming options in Arizona:
Legal Entity Name
In Arizona, businesses must register a legal entity name, which is what the state uses to identify the company. Entity names must be unique, so you’re protected from the possibility of another business having the same name as yours.
Arizona naming laws have guidelines relating to company suffixes (e.g., LLC, LP, or Corp) and require that the name reflects the type of business being registered. You can check for name availability using the Arizona Corporation Commission’s eCorp database.
Trademark
A trademark in Arizona is a form of intellectual property that protects a business name or logo at a national level. To safeguard a name or logo, it’s crucial to conduct a trademark search in the USPTO database to ensure it’s not already registered.
Once the trademark is registered, it prevents others from using the same or similar name or logo for similar goods or services and provides nationwide protection. Obtaining a trademark does not automatically grant the right to use the name or logo in all circumstances.
Doing Business As (DBA)
In Arizona, you also have the option of registering your business under one ‘official’ name and operating under another. This is known as a Doing Business As (DBA) name or a trade name. You need to file a “Trade Name Registration” with the Arizona Secretary of State’s office. These names are subject to federal trademark laws, but there’s no requirement for a DBA to be unique at the state level.
By understanding and considering these naming options, you can successfully register your business name in Arizona and protect your brand identity.
Step 3: Consider Taxes and Other Costs in Arizona
Arizona LLCs are subject to a variety of taxes, including:
- Arizona income tax: Arizona LLCs are taxed on their net income, which is calculated by deducting business expenses from gross income. The Arizona income tax rate ranges from 2.59% to 4.50%, depending on income.
- Arizona sales tax: Arizona LLCs that sell tangible personal property in Arizona are required to collect sales tax. The sales tax rate is 5.6%.
- Arizona use tax: Arizona LLCs that purchase tangible personal property for use in Arizona but do not pay sales tax on the purchase may be liable for use tax. The use tax rate is the same as the sales tax rate.
In addition to these taxes, Arizona LLCs may also be subject to federal taxes, such as income tax, self-employment tax, and payroll taxes. You should consult with a tax advisor to determine which taxes apply to your business.
There are a few ways to reduce the amount of taxes that your Arizona LLC pays. One way is to take advantage of business deductions and credits. Another way is to choose the right business structure. For example, S corporations and partnerships may be able to pass their income through to their owners, which can help to reduce the amount of taxes that they pay.
Business owners in Arizona can simplify their registration process by utilizing online services such as ZenBusiness. ZenBusiness provides a range of convenient services to assist entrepreneurs with business registration, including filing with the Arizona Corporation Commission, acquiring an Employer Identification Number (EIN), and developing an operating agreement. Additionally, they offer ongoing compliance support to ensure businesses maintain a favorable standing with the state.
Step 4: Register and Acquire Licenses and Permits in Arizona
To operate your business in Arizona, it’s important to obtain the necessary licenses and permits. Here are the key requirements:
Tax Registration: For businesses planning to sell goods in Arizona, registration with the Arizona Department of Revenue (DOR) is mandatory in order to collect the transaction privilege tax, known in many other states as sales tax.
If your business will employ staff, registration with the DOR for employer withholding taxes is also necessary. The AZTaxes website hosted by the DOR allows online registration for these and other business taxes and licenses.
EIN: If your business has employees or is taxed separately from you, you’ll need to acquire a federal Employer Identification Number (EIN) from the IRS. Regardless of whether an EIN is legally required, it can be advantageous for business purposes.
Banks, for instance, often demand an EIN to open an account under the business’s name, and other companies you collaborate with might require an EIN to handle payments. An EIN can be obtained by filling out an online application, which is free of charge.
Regulatory Licenses and Permits: These encompass areas such as:
- Health and Safety
- Environmental Concerns
- Building and Construction
- Specific Sectors or Services
The DOR website’s Licensing Guide provides fundamental information about key Arizona business licenses and a link to a handbook on Arizona business taxes. Other critical regulatory licenses and permits are provided by different state agencies like the Arizona Department of Environmental Quality and the Arizona Department of Health Services.
To obtain information about local licenses and permits, you should visit the websites of any cities or counties where your business will operate.
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Step 5: Open a Bank Account For Your Business in Arizona
As soon as you have your EIN, you can open a business bank account in Arizona.
Laws regulating LLPs, LLCs, and corporations make opening a business bank account a requirement. Sole proprietors and unincorporated partnerships, on the other hand, aren’t obliged to have separate personal and business bank accounts.
Opening a business account in Arizona is as simple as going to your local bank and filling out the required paperwork. Of course, it’s a good idea to shop around and compare the rates and perks different banks offer before you settle on a particular provider.
Even if you’re operating as a sole proprietor or unincorporated partnership in Arizona, it’s a good idea to have a designated company bank account to keep your finances separate from those of your business. If you decide to incorporate your business later on, this will save you the hassle down the line.
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Step 6: Safeguard Your Intellectual Property in Arizona
In Arizona, it’s crucial to protect your intellectual property (IP) to maintain your business’s competitive edge and reputation. Your IP may include your business name, logo, product designs, creative works, or inventions. Here’s how to secure your IP in Arizona:
Trademarks
A trademark is a unique symbol, phrase, word, or design that distinguishes your products or services from those of competitors. Register your trademark with the United States Patent and Trademark Office (USPTO) to gain legal protection across the United States. Registration allows you to take legal action against the unauthorized use of your trademark.
Copyrights
Original works, including literary, dramatic, musical, artistic, and other intellectual creations, are eligible for copyright protection in Arizona. As soon as you create the work, copyright protection is automatically granted.
However, you can strengthen your legal position by registering your copyright with the U.S. Copyright Office. Registration provides additional legal protection and evidence of ownership in case of disputes. Registering your copyright in Arizona can help protect your work against infringement and provide a way to enforce your rights in court if necessary.
Patents
If you’ve developed a unique invention, consider applying for a patent. Patents grant you exclusive rights to produce, sell, or import your invention for a specified period. The patent process can be lengthy and complex, so starting early is advisable. Patent applications are submitted to the United States Patent and Trademark Office (USPTO).
By securing your intellectual property in Arizona, you not only protect your brand, products, and creative works but also enhance your business’s growth and sustainability.
Step 7: Establish a Robust Payment System in Arizona
To guarantee that your Arizona-based business is prepared to cater to customers once it’s officially registered, you’ll need to implement a seamless and reliable method for accepting payments.
Numerous payment processing services are available, offering user-friendly interfaces and seamless integration with your website or point-of-sale (POS) system. Popular options such as Square, Stripe, and PayPal provide flexibility and easy setup, allowing you to tailor the service to your business needs.
These payment processors enable you to accept various payment methods, including credit and debit cards, ACH transfers, and digital wallets like Apple Pay and Google Pay. With a dependable payment processing service, your customers can use their preferred payment methods via a secure platform, ensuring a smooth transaction experience for all parties involved.
In addition to selecting a payment processor, it’s essential to ensure your compliance with Arizona’s sales tax regulations. This involves acquiring an Arizona Transaction Privilege Tax (TPT) License from the Arizona Department of Revenue, which allows you to collect sales tax on taxable goods and services.
With your payment system in place, your Arizona-based business will be ready to serve customers and generate revenue efficiently and securely.
By following these steps, you’ll be well on your way to creating a legally compliant business in Arizona.
Top 5 Business Formation Services for Arizona Entrepreneurs
A variety of business formation services are available to assist entrepreneurs and small business owners in Arizona. These services offer a range of solutions, helping businesses start and maintain compliance with Arizona state and federal regulations. Here are five of the best business formation services for Arizona entrepreneurs:
ZenBusiness
ZenBusiness is an online LLC formation service specializing in Arizona business formation, registered agent services, annual report filing, and more. They offer affordable pricing and package options that include personalized support and resources to help Arizona businesses stay compliant and grow.
With a user-friendly website and a streamlined process, ZenBusiness simplifies the experience for entrepreneurs registering their businesses in Arizona.
Swyft Filings
Swyft Filings is a renowned business formation service providing fast and easy business formation in Arizona, including LLC formation, incorporation, and compliance. They offer personalized support and resources to help Arizona businesses navigate the formation process and maintain compliance with state and federal regulations. Swyft Filings has a user-friendly website and competitive pricing, making the registration process more accessible for entrepreneurs in Arizona.
Tailor Brands
Tailor Brands, an online branding and design service, assists Arizona businesses in developing a professional and cohesive brand identity. Their range of branding packages includes logo design, business card design, and social media branding. Tailor Brands also provides a suite of design tools and resources for Arizona businesses to create and customize their branded assets. While not a traditional business formation service, Tailor Brands can help Arizona businesses build a professional brand image to attract customers.
Northwest Registered Agent
Northwest Registered Agent, an online business formation service, specializes in Arizona registered agent services, compliance management, and document filing. They have a strong reputation for quality and exceptional customer service, offering personalized support to help Arizona businesses maintain compliance with state and federal regulations. Northwest Registered Agent provides various business formation services for LLCs, corporations, and nonprofits in Arizona.
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Bizee (Previously Incfile)
Bizee is an online business formation service providing fast and affordable business formation services in Arizona. They offer package options that include registered agent services, compliance management, and document filing. bizee platform is user-friendly and streamlined, making the Arizona business registration process simple and hassle-free. They also offer ongoing support and resources to help Arizona businesses stay compliant and grow.
Each of these business formation services offers unique features and benefits to support entrepreneurs registering their businesses in Arizona. By researching and comparing these services, Arizona entrepreneurs can find the best one to meet their specific needs, ensuring a smooth and efficient registration process.
Business Registration Laws in Arizona
Here are some key points regarding business registration laws in Arizona:
- Business Structure: Before registering your business, you’ll need to determine its legal structure. Arizona recognizes several common business structures, including sole proprietorships, partnerships, Limited Liability Companies (LLCs), and corporations. Each structure has different requirements and legal implications.
- Business Name: Choose a unique name for your business that’s not already in use by another entity in Arizona. You can conduct a name availability search through the Arizona Corporation Commission’s website to ensure your chosen name is available.
- Registering With the Arizona Corporation Commission (ACC): In Arizona, most businesses are required to register with the Arizona Corporation Commission. This applies to corporations, LLCs, limited partnerships, limited liability partnerships, and nonprofit organizations. You can file the necessary forms online or by mail.
- Articles of Incorporation or Organization: Depending on your business structure, you will need to file Articles of Incorporation (for corporations) or Articles of Organization (for LLCs) with the Arizona Corporation Commission. These documents outline essential information about your business, such as its name, registered agent, purpose, and management structure.
- Registered Agent: Your business must have a registered agent in Arizona. This individual or entity acts as a point of contact for official correspondence and legal documents on behalf of your business. The registered agent must have a physical address in Arizona.
- Employer Identification Number (EIN): In most cases, businesses in Arizona need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This unique identifier is used for tax purposes and is typically required when opening a business bank account.
- Licenses and Permits: Depending on the nature of your business, you may need to obtain additional licenses and permits at the local, state, or federal level. The specific requirements vary based on your industry and the activities you engage in. You can consult the Arizona Department of Revenue and local government agencies to determine the licenses and permits relevant to your business.
It’s important to remember that the specific requirements for business registration in Arizona may vary depending on the nature of your business. Consider seeking professional legal advice or contacting the Arizona Secretary of State’s office for detailed and accurate information.
Alternative Business Registration Methods in Arizona
In Arizona, there are several alternative methods to register a business. Choosing the right method depends on the type of business you want to start, as well as your specific needs and goals. Here are a few alternative business registration methods in Arizona:
Online Registration
The Arizona Corporation Commission (ACC) eCorp website allows you to register your business online. Through this platform, you can register various types of business entities, such as Limited Liability Companies (LLCs), Corporations, and Non-Profit Corporations. The website provides step-by-step instructions and allows you to submit necessary forms and fees electronically.
Mail or In-Person Registration
If you prefer not to register online, you can complete the required forms and submit them via mail or in person at the ACC offices. You can find the forms on the ACC website or at their offices. Ensure you provide all required information and include the correct fees with your submission.
Assumed Business Name (DBA)
If you’re a sole proprietor or a general partnership and want to operate your business under a name different from your legal name, you can register an Assumed Business Name, also known as “Doing Business As” (DBA). You can register a DBA through the County Recorder’s Office in the county where your business is located.
Trade Name Registration
In Arizona, you can also register a trade name to protect your business name. Registering a trading name does not create a separate legal entity but reserves the name for your exclusive use within Arizona. You can register a trade name with the Arizona Secretary of State’s office.
Professional LLC or Corporation
If you’re starting a business that provides professional services (e.g., medical, legal, accounting, architectural, or engineering services), you may need to register as a Professional Limited Liability Company (PLLC) or a Professional Corporation (PC). This registration is done through the ACC eCorp website or by mail/in-person, similar to regular LLCs and corporations.
Foreign Entity Registration
If your business is already registered in another state and you plan to conduct business in Arizona, you must register as a foreign entity with the ACC. This can be done online through the eCorp website or by mail/in person.
Remember that, in addition to registering your business, you may also need to obtain necessary licenses and permits, depending on your business activities and location. Be sure to check with the appropriate state and local agencies to ensure you comply with all requirements.
Benefits of Registering Your Business in Arizona
Registering your business in Arizona can provide several benefits, including:
- Legal Entity: Registering your business in Arizona creates a legal entity separate from its owners. This means that the business can own assets, enter into contracts, and conduct business in its name.
- Liability Protection: By registering your business as a corporation or Limited Liability Company (LLC), you can limit personal liability for business debts and obligations. This means that the personal assets of the business owner are protected from business-related lawsuits and claims.
- Credibility: Registering your business in Arizona can increase credibility with customers, vendors, and partners. It shows that the business is committed to following state regulations and is a legitimate entity.
- Tax Benefits: Registering your business in Arizona can provide tax benefits, such as deductions for business expenses and reduced tax rates for corporations.
- Access to Capital: Registering your business in Arizona can also make it easier to obtain funding from banks, investors, and other sources of capital. It can provide greater transparency and make it easier for investors to assess the risks and potential of the business.
Overall, registering your business in Arizona can provide several benefits that can help your business succeed and grow.
Is Business Registration Required in Arizona? Find Out Here
In Arizona, most businesses are also required to register with the state. The specific registration requirements depend on the type of business entity and the nature of the business. Some common types of registration include obtaining an Arizona Transaction Privilege Tax (TPT) License, registering an Arizona Limited Liability Company (LLC) or Corporation with the Arizona Corporation Commission, and obtaining professional licenses or permits for certain industries.
It’s important to research the specific requirements for your business and comply with all registration obligations to avoid legal and financial consequences. Additionally, failure to register with the appropriate state agencies can result in fines, penalties, and potentially even the suspension or revocation of your business license.
How to Register Your Business in Arizona – Frequently Asked Questions
What Do I Need to Register a Business in Arizona?
To register a business in Arizona, you will need to choose a business name, choose your legal structure, and file the necessary paperwork with the Arizona Corporation Commission. The specific requirements will depend on the type of business you’re starting, but generally, you will need to file Articles of Organization for an LLC or Articles of Incorporation for a corporation, appoint a statutory agent, and obtain any necessary licenses or permits.
How Much Does It Cost to Register a Company in Arizona?
The cost of registering a company in Arizona depends on the legal structure of your business and the type of filing you’re submitting. The filing fee for an LLC in Arizona is $50, while the filing fee for a corporation is $60. There may be additional fees for other filings and permits required for your business.
Can a Foreigner Start a Business in Arizona?
Yes, foreigners are allowed to start a business in Arizona as long as they meet the legal requirements for doing so. Foreign business owners may need to obtain the appropriate visas or work permits and may need to register their businesses with additional state and federal agencies.
Do I Need to Register My Online Business in Arizona?
If you’re operating an online business in Arizona, you may be required to register your business with the state, depending on the type of business you’re operating and the nature of your online activities. Sole proprietorships and partnerships may not need to register, but corporations and LLCs likely will. You may also need to obtain certain permits and licenses, such as a transaction privilege tax license from the Arizona Department of Revenue.
It’s important to consult with a qualified attorney or accountant to determine the specific requirements for your business in Arizona. They can help you navigate the complex rules and regulations governing businesses in the state and ensure that you comply with all applicable laws and regulations.
Bottom Line on How to Register Your Business in Arizona
Registering your business in Arizona is essential to ensure compliance with state laws. By following the required steps and meeting the necessary criteria, you’ll build a strong foundation for your business.
To start, choose a business name and legal structure that aligns with the Arizona Corporation Commission’s guidelines. Next, complete the required paperwork, appoint a statutory agent, and secure any licenses and permits specific to your industry and location.
Using a business registration service like Northwest Registered Agent can streamline the process and help ensure compliance. Properly registering your business in Arizona helps prevent future legal and financial complications, setting you up for success. Additionally, consulting with a lawyer or accountant can further ensure you meet all legal requirements.
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About the author
Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.