If you are a business person intending to create a limited liability company (simply called LLC) in Arizona or any other American state, you should be aware of handy legal documents associated with such companies. The Arizona LLC operating agreement is a straightforward example of these documents.
This agreement is vital for your business irrespective of who runs the company—you single-handedly or a group of owners. The record demonstrates that the company has a name and address, works in a particular field, and has specific features. Regardless of the state where the agreement is signed, the details you contained in the LLC operating agreement template are analogous.
Although the government does not require having this legal form from the company’s members, they usually decide to complete the form, notarize it, and spread the copies to those who should have it. It usually contains around ten pages and states:
Every company’s member has to sign the agreement, write the date of signing and their name on the last page of the contract.
Overall, the document lets all company owners discuss the company’s key management policies, agree on all the thoughts and suggestions, and reflect on the provisions, leaving their signatures to approve the document.
For those starting an entity solo, the operating agreement enables them to define how much they have invested in the company and split this capital from their personal properties.
If you belong to a group of a company’s proprietors—even if the group consists of only two entrepreneurs—choose the multi-member agreement template. If you are the only person establishing a company, opt for the single-member template.
When you have prepared the operating agreement and all shareowners have signed it, ensure that each owner has gotten their copy.
Our form-building software will assist you in creating and downloading the Arizona LLC operating agreement template.
If you still have doubts about the type of company to choose for your future entity, here is an explanation of what a “company with limited liability” means.
When the entity’s liability is limited, its shareowners face fewer risks because their liability is also limited. They cannot lose more than a specific amount(usually equal to what they have invested in the business) if the entity runs into losses or debts.
The only exception is the entity’s bankruptcy. In this case, members are collectively responsible and should return the money to the lenders or customers.
A limited liability company is convenient because it contains superior features compared to others. For example, the taxes are more straightforward, and there is a possibility of avoiding double taxation when treated like a small company (a sole proprietorship).
Another thing is members’ liability, which is a feature of a large corporation.
Another thing to mention is that both individuals and entities own a limited liability company. This opens up new opportunities for the business, attracting more investors and partners.
Every state provides its laws and norms regulating business operations, contracts, and companies with limited liability. In Arizona, a person or a group that forms such an entity should adhere to Chapter 7 of Title 29 of the Arizona Revised Statutes.
Section 29-3105 details operating agreements related to LLCs. According to this Section, you can include any provision you need in the agreement unless it contradicts state law. You will also find a list of restrictions for operating agreements and other essential details.
Our comprehensive guide below explains everything you should accomplish to establish your own limited liability company in Arizona. We hope that you will find the information helpful.
Get ready to cover various fees because each entity-establishing process involves paying for numerous services and applications.
1. Create Your Future Company’s Name
Section 29-3112 sets the rules upon which you have to choose the name for your entity.
The name has to be unique because you cannot take the name of another company. Another requirement is to add one of the acronyms LC, L.C., LLC, L.L.C. or the words “limited company” or “limited liability company” either in lowercase or uppercase.
It is worth mentioning that your entity’s name cannot contain abbreviations or words that can mislead public authorities, customers, or anyone else. For instance, you should not use the word “corporation” in the name.
Typically, these rules apply to the LLC creation in all states of America.
Sections 29-3113 and 29-3114 of the Arizona Revised Statutes give more details about the naming of such companies in the state.
2. Assign the Statutory (or Registered) Agent
A statutory agent in Arizona is the same person (or entity) as a registered agent in most American states. Such an agent is assigned to deal with the correspondence, taxes, court cases (if they arise), and other related matters regarding the business.
Provisions describing statutory agents’ functions are included in Sections 29-3115–29-3119 of the Arizona Revised Statutes.
You can assign yourself as a statutory agent, select one of the company’s owners, or hire a contractor among the agencies that deal with these functions professionally.
If you register your company in the state of Arizona, it is considered domestic. Companies registered outside of the state are foreign. You will pay 50 US dollars to register a domestic entity, while the foreign company registration requires three times more (150 dollars).
3. File the Articles of Organization
To proceed with the entity formation, you need to fill out the Articles of Organization. This document contains basic information about the company. There, you should write down the company’s name, address its field scope, your statutory agent’s details, and so on.
Additionally, you need to send the Statutory Agent Acceptance form, the Arizona Corporation Commission Cover Sheet form, and the Membership Attachment form.
The fee for submitting the document in Arizona is 50 US dollars. You can send it either by regular mail or online.
If you have doubts, check the Arizona Revised Statutes, Sections 29-3201–29-3211.
4. Create the Operating Agreement
Although it is not mandatory for the public authorities, you should create the operating agreement for your own good. We have described the items to include in such agreements.
5. Get the Tax Number
Apply to the Internal Revenue Service (IRS) to get your entity’s tax number, also called EIN, FTIN, or FEIN. Without this number, your company cannot perform most business tasks, including hiring workers and opening a bank account.
Many American states oblige companies’ members to file various reports that reflect the company’s activity in a certain period. However, in Arizona, there is no such requirement. Still, you should cover your entity’s taxes in time.
6. Publish an Ad in the Newspaper
There are only three states in the US where you have to publish an ad when forming a limited liability company: New York, Nebraska, and Arizona.
So, when your company is finally registered, you should apply to the local media and publish an ad, as stated in Section 29-3201 of the Arizona Revised Statutes. You will have two months after the registration to publish the ads.
There have to be no less than three publications. After the cycle is complete, you will receive the confirmation paper from the media (the Affidavit of Publication). You have to deliver this record to the Arizona Corporation Commission. The submission does not require any payments.