Benefits of Having an LLC
Creating an LLC is one of the first steps to having a successful business. Why is creating an LLC so important? Having your business organized as an LLC will protect your personal assets from any creditors or lawsuits that come against your business. Without an LLC, your personal assets could be on the line to pay those bills. Furthermore, an LLC gives you protection, but still gives you the ability to report all of your business income and expenses on your own tax return.
An LLC is something that no business owner should be without. What exactly is involved in creating an LLC?
Before you find a company that can help you complete your paperwork, you will need to make sure you have all of the necessary information. Before you begin the process make sure you have at least the following:
- Business Name: Before you can create an LLC, you will need to come up with a name for your business. This name can be anything that you choose. The only requirement is that your business name must be followed by a comma and the abbreviation “LLC”. You also cannot choose a name that someone else is already using. You risk rejection if you apply for your LLC with a name that is already in use. To prevent this from happening, do a name availability search on the Arizona Corporation Commission Website.
- Business Purpose: You need to be able to state your purpose for creating an LLC. Basically, you will need to know what type of services or products you will be offering.
- Statutory Agent: A statutory agent is someone who you appoint to receive legal and tax documents on behalf of the LLC. This person must have a physical address, not a P.O Box. Typically, the owner of the company lists themselves as the statutory agent.
- Physical Business Address: The State of Arizona requires that all LLCs have a physical business address on file. If you do not have an office because you work on-site or out of your home, you can use your home address.
- Organizing Members: You will also need to have the names and address of all members of the LLC. This may just be your name, your name and your spouse’s name, or your name and the names of any business partners. It all depends on how you are choosing to set up your LLC.
Now that you have all the pertinent information, you can start the process of creating your LLC. You can choose to draft these documents yourself, hire an attorney, or hire a Certified Legal Document Preparer. Whatever route you choose, you will need the following documents:
- Articles of Organization: This document expresses your intent to create an LLC. It will include all of the above-stated information, as well as other legally required statements. This document is filed with the Arizona Corporation Commission. If they approve everything you will receive a confirmation letter from the AZCC.
- SS-4: This is a form you will need to file with the IRS to receive an Employer Identification Number or EIN. Every business needs one of these numbers to operate legally in the United States. An EIN is basically a Social Security Number for a business. It helps the IRS to keep track of your tax obligations.
- State or City Tax Forms: Depending on the type of business you will be operating, as well as the city you live in, you may also need to file additional tax-related paperwork. This is a case by case situation. You will need to do research, or talk to your attorney or document preparer to see if any of these additional forms apply to you.
LLC Creation Process
Once all of the necessary documents are complete you will need to go through a few more steps to complete the process. First, the Articles of Organization, along with a cover letter, need to be filed with the Arizona Corporation Commission. Once get the approval you will need to publish notice. This means that once a week for three weeks’ information about your company will be published a newspaper that is circulated in your area.
You also will need to file your SS-4 with the IRS to receive your EIN. As well as filing any other necessary paperwork with the State of Arizona or your city. Once all of this is complete you are ready to start your business operations! Whilst we wish every new business success, it can be worth looking into guaranteed payments to partners to ensure that business owners can subsidize their own living costs.