LLC
The Steps to Set Up an Arizona LLC
File your articles of organization with the Arizona Corporation Commission.
You need an operating agreement to document a bunch of stuff about how the LLC is managed, who owns the LLC, how the tax accounting for the LLC should work, and what needs to happen if the ownership of the LLC changes.
Publish your approved articles of organization in an approved local newspaper.
Deciding on Your LLCs Tax Treatment
After you set up your LLC, you need decide what tax form your LLC should use. Single-member (single-owner) LLCs can be treated as sole proprietorships, C corporations, or S corporations. Multiple-member (multiple-owner) LLCs can be treated as partnerships, C corporations, or S corporations.
By default, single-member LLCs are treated as sole proprietorships and multiple-member LLCs are treated as partnerships. However, owners can often realize huge tax savings—thousands and thousands of dollars each year—by electing to be treated as a C corporation or an S corporation.
How to Get Choice of Entity Benefits
For help assessing whether you should operate your business as a sole proprietorship, partnership, C corporation or S corporation, please contact our office and schedule a meeting where we together estimate the benefits you’ll receive from the different entity forms. If you’re well-organized and have even a rough business plan, this meeting should take less than a couple of hours.
If we conclude that it makes sense to convert your existing LLC or C corporation to an S corporation (assuming you decide that C or S corporation status makes sense), you’ll need to supply me with your previous year’s tax return if you’re operating an existing business or your SS-4 if you’re operating a new business (the SS-4 is the form you used to get an employer identification number). If your situation is straightforward, my work to elect C or S corporation status is very modest.