Steps to Take After Forming an Arizona LLC
December 15, 2020
Steps to Take After Forming an Arizona LLC
After you have formed your Arizona LLC, there are additional steps needed in order to get your business up and running. These steps include things like obtaining an employee identification number (EIN), choosing a tax status for your company, applying for various licenses, and registering with the Arizona unemployment office.
These and other steps are required for your business to operate legally in Arizona. Below, we explain more about what they entail.
Obtain an EIN
Just as individuals are identified by social security numbers, businesses are identified by their EINs. Although the Arizona Corporation Commission does not require an EIN (also known as a federal employer identification number or federal tax identification number) to register a business, EINs are used to administer federal and state taxes. They are also required to hire employees and open a bank account for your business.
To obtain an EIN, visit the IRS’s EIN Assistant. EINs are provided immediately after applications are submitted.
Choose a Tax Status
An LLC in Arizona can be taxed in a number of ways, depending on the owner’s preference. Options include taxation as an S or C corporation, a partnership, or a disregarded entity. Each of these has pros and cons when it comes to how taxes are paid, protection of assets, permissible management structures, maintenance requirements, and other considerations.
To choose one, consider your company’s size, how you want to manage your company, and what your financial goals are for the company. Because tax status has significant ramifications, it is important to talk to an experienced business attorney like Timothy Coons before deciding.
Apply for an Arizona Transaction Privilege Tax (TPT) License
If your business will sell products or provide taxable services, you probably will need to apply for an Arizona TPT License from the Arizona Department of Revenue. The TPT is assessed on vendors doing business in the state. It is not a business license, which Arizona does not require, although many cities and towns do (see below).
Note that the same form that is used to apply for a TPT license is also used to apply for employer withholding and unemployment insurance. This is called the Arizona Joint Tax Application (JT-1) because it is used by both the Department of Revenue and Department of Economic Security and allows the business owner to apply for any of the listed licenses and registrations on a single application.
Register With and Apply for a Business License in Your City or Town
Most cities and towns in Arizona require a business license for companies based in their jurisdictions. Some municipalities also require a license for companies that do business in their jurisdictions, whether they are based there or not.
You will need to check the regulations in all municipalities in which you do business to make sure you are complying with local regulations.
Get Workers’ Compensation Insurance
Arizona has a no-fault workers’ compensation system, which means that employees who suffer an injury or illness related to work are entitled to benefits.
As a result, if you have employees, you will need to obtain workers’ compensation insurance from a company licensed to issue this type of insurance in Arizona. The Arizona Department of Insurance has a list of these companies.
Obtain Any Necessary Permits, Licenses, and/or Certifications
Depending on the type of business you have, you may need additional federal, state, or local permits, licenses, and/or certifications. Consult an attorney to determine your company’s specific requirements in this area.
Publish Your LLC
Arizona requires a new LLC to publish a Notice of LLC Formation to let other people know of its existence. The Notice of LLC Formation requires several elements, including: the name of the LLC, the address of its principal place of business, the name and physical address of the statutory agent (someone who can accept service of process), a designation of the type of management (member-managed or manager-managed), and the names and addresses of the LLC members or manager.
This notice must be published within 60 days of formation in an approved newspaper for three consecutive weeks in the county that serves as the LLC’s principal place of business. Companies based in Maricopa and Pima counties do not have to meet these publication requirements.
Open a Bank Account for Your Business
Once you have an EIN, you can open a business account at a local bank.
Contact Counxel Legal Firm
This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact firstname.lastname@example.org or 480-536-6122 to request specific information for your situation.
*Conveniently located off the 101 Freeway and the US 60 in the middle of Phoenix, Scottsdale, Tempe, Chandler, Gilbert, Mesa, and Queen Creek!