How Long Does it Take to Get an LLC in Arizona (2024 Guide)

It's a big decision to make the move to form an LLC, and it requires lots of paperwork. Starting a business is a notoriously slow and arduous process thanks to various legal processes and government red tape. But it can also take longer due to things like processing times and the filing method you choose. But in this article, we'll tell you everything you need to know to answer the question: “How long does it take to get an LLC in Arizona?”.

Discovering Arizona

Arizona is a beautiful state where you can find both deserts and arid climates in the south, as well as snowy mountaintops in the northeast. And with all of those different climates, you can also imagine all of the different types of businesses and marketing tactics that are possible there. Business logos with either snowy mountain caps or cactuses would work there, after all! Here's what you need to know about the economy and business environment in the state of Arizona.

Economic Overview of Arizona

Arizona ranks 17th in the United States in terms of overall growth from 2017-2022. During that time period, it's grown 2.5%, and achieved a GSP (Gross State Product) of $341.8 billion. From 2016-2021, Arizona actually held the title for the fifth-best GDP growth rate in the country. And the yearly unemployment growth rate each year from 2017-2022 is 1.9%.

The top industries in Arizona right now are Tourism, E-commerce and Online Auctions, Property, Casualty and Direct Insurance, New Car Dealers and Commercial Banking. The companies providing the most employment opportunities in the state are the State of Arizona, Walmart Inc., Banner Health, the United States Department of the Air Force, and The Kroger Co. So, as you can see, the retail, insurance and state sectors are doing well.

Business Environment in Arizona

Many business owners enjoy doing business in Arizona because of the low tax rates. The state sales tax rate is 5.6%, which is pretty average, but their corporate income tax is a flat rate of 6.968%, and they provide five brackets of personal income tax rates that range from 2.55-2.98%. So, taxes are low enough to lure in prospective new businesses.

There's also a huge labor market that makes choosing the right employees a breeze. There's a substantial pool of qualified applicants to choose from. The state's unemployment rate as of 2022 sits at 4.1%, which is above the 3.5% national average. This means that when a business moves into the state offering jobs, people are eager to apply and snatch them up, even if it means commuting, and that's good for business.

State-Specific Regulations and Incentives for Forming an LLC in Arizona

Here are some of the incentives that Arizona offers for business owners.

• Additional Depreciation: This is an incentive to invest in various properties and businesses in Arizona. It reduces the taxable value of business property, which reduces personal property tax liabilities for business owners. It’s available for any qualifying business up to 2.5% both immediately and indefinitely. 
• Angel Tax Credit Program: Qualifying small businesses become certified with the Arizona Commerce Authority and the program gives tax credits to investors who invest in those businesses. It removes the capital gains tax liabilities tied to dispersing investments in small businesses. 
• Quality Jobs Tax Credit: This program supplies tax credits to businesses and employers that create a certain number of qualifying new jobs and also make a specified capital investment in the state of Arizona. 
• Qualified Facility Tax Credit: This is a tax credit that’s awarded to taxpayers expanding or relocating to qualified facilities in the state. It’s designed to make Arizona a place where corporations want to set up headquarters, and companies want to locate their commercial research and manufacturing. 
• Computer Data Center Program: This program provides Transaction Privilege Tax (TPT) and Use Tax breaks on state, county and local levels on purchases of Computer Data Center (CDC) equipment. 
• Foreign Trade Zone: Any business situated in a foreign trade zone or sub-zone is eligible for as much as a 72.9% tax cut on real and personal property taxes. 
• Healthy Forest Enterprise Incentive: Certain businesses can receive incentives for promoting forest health in the state. These businesses are involved in the harvesting, processing and transport of various forest products. 
• Government Property Lease Excise Tax (GPLET): This is a program for redevelopment that swaps out a project's real property tax with excise tax to lower its operating costs. 
• Military Reuse Zone (MRZ): This lessens the impact that closing military bases has on the state government. There are two MRZs in Arizona, currently. If you’re in a qualified zone, you can get either a transaction privilege tax exemption, or a property reclassification. 
• Research And Development (R&D) Incentive: This is a tax credit of 24% for the first $2.5 million you spend investing in research and development at state universities, as well as 15% on investments that exceed $2.5 million. 
• Sales Tax Exemptions For Manufacturing: You can get exemptions for machinery, equipment, or transmission lines for producing electrical power, but not for distribution, machinery or equipment that’s used for manufacturing, machinery or equipment used in research and development, and electricity or gas used in manufacturing or smelting processes. 

• Work Opportunity Tax Credit (WOTC): This is a federal tax credit that Congress supplies to businesses in the private sector. These businesses must hire individuals from 9 specific groups which have faced employment obstacles. It’s a credit of up to $9,000.

Pros and Cons of Establishing an LLC in Arizona

The pros of forming a Limited Liability Company in Arizona include the low taxes in the state, a flat tax of 6.968% for corporate taxes, and personal income taxes between 2.55and 2.98%. Plus, the economy in Arizona is quite healthy and growing, which is great for business. And the state has an expansive labor market, which means plenty of workers for any new business.

The drawbacks are that Arizona residents have a personal income that's lower than the rest of the nation's on average, and a pretty steep cost of living. The result is that many residents don't have much disposable income to play with, which can be a challenge for business owners. Another challenge for business owners is one that every state faces, which is difficulty in getting startup capital.

Procedure of Establishing an LLC in Arizona

Before you dive head-first into learning about processing times, you need to know about the legal process to form a Limited Liability Company in Arizona. Here are the steps you need to take to form your LLC.

1. Get an Articles of Organization Form: This is the main form necessary to form your LLC. You can get it from the Arizona Corporation Commission.
2. Choose the Right Business Name: The business name you choose can't be the same as or too similar to other business names already being used in the state. So to avoid your business name being rejected by the state, you should run a business name search.
3. Designate a Registered Agent: A registered agent is a legal term for someone who is present at your business address during regular working hours to receive mail from government agencies, as well as service of process on your company's behalf. You can designate someone you know and trust, or hire a registered agent service.
4. Choose Your LLC's Address: The address you choose for your business is important because it's where government agencies will send important information for your business. It's also listed on the public record, so many people don't want to list their home addresses for privacy and security reasons. Sometimes you can use a virtual address or virtual office, but you can't use a PO box.
5. Sign and Submit Your Documents: Check over the information you've listed on your form, then someone to sign and submit it. The person that signs the formation documents will be listed on public record, so again this is a decision that should be made carefully. You can have someone close to you do it, or use an LLC formation service. Once you've submitted your documents, to the Arizona Corporation Commission, Corporations Division, the Secretary of State will contact you by mail or email once your forms have been processed.

Submitting your documents isn't the last step you have to complete. There are actually a number of other activities you must complete once you've filed your Articles of Organization. For more information on what steps to take after filing, read How to Start An Arizona LLC.

Necessary Documentation for Filing an LLC in Arizona

You can save yourself some time during the formation process by gathering up all of the documents you need to form your LLC before you start the process. Some of the things you'll need are your Articles of Organization, your name reservation application, your Employer Identification Number (EIN), your LLC Operating Agreement (it's not a legal requirement, but it's still recommended), your initial report, and paperwork to get your LLC registered for various taxes.

Legal Requirements for Starting an LLC in Arizona

Arizona has publication requirements for LLCs, which means that your LLC is required to publish a notice of formation in a newspaper ad in at least 3 consecutive publications or runs. This usually takes between 1 and 2 weeks. This ad is required to be published within 60 days of your LLC being approved, and the newspaper you choose must be in the same county as your registered agent's address.

You'll also need to get set up with the Department of Revenue for your Transaction Privilege Tax license. In many states, this is called sales tax, but it's called the Transaction Privilege Tax (TPT) in Arizona.

In most every state, LLCs are required to have a registered agent, as well.

Time Frame for Establishing an LLC in Arizona

Now that you're more familiar with the process of forming a Limited Liability Company, you're interesting in learning how long it takes to get an LLC. Here are the time frames you can expect when you form an LLC in Arizona.

How Long Does the Initial Paperwork Take in Arizona?

Depending on which filing option you choose, your paperwork could be completed within 3-5 weeks. Approval times for standard filings by mail can take 4-5 weeks, and online filing can take 3 weeks.

Processing Times in the State of Arizona

There's a difference between processing times and approval times. The processing time is how long it takes the state government to look over your paperwork and get it entered into the system. Approval time is the overall time it takes for your LLC to get approved, and it includes processing times.

Processing times in Arizona are 14-16 days for both mail and online filings.

Common Delays in the LLC Formation Process in Arizona

The most common delay is choosing a slow filing option, like the mail option, which could take up to 4-5 weeks.

Your submission could be completely rejected if your the information on your documents isn't 100% accurate, which could actually be worse than a simple delay.

And having a lot of LLC members or an otherwise complicated business structure could delay your formation because not only will the state government have to review that structure and approve it, you'll have to draft your Operating Agreement or have an LLC formation service draft it to accommodate it.

Expedited Processing for LLC Formation in Arizona

If you're in a hurry and don't want to wait around for weeks to get your LLC approved, then expedited processing can be an excellent option. Here's everything you need to know about expedited processing in Arizona.

What Are the Expedited Options Available?

For domestic LLCs, you can get next-day processing, same-day processing, or two hour processing.

For foreign LLCs, the expedited option offers processing within 5 business days.

Additional Costs for Expedited Services in Arizona

All of the expedited processing options in Arizona do come with fees. They're as follows:

• Next-day processing: $100

• Same-day processing: $200

• Two-hour processing: $400

• Foreign LLCs: $35

Comparing LLC Formation Time Frame in Arizona with Other States

Unless you live in Arizona, it's probably only one of several states you're considering. So here are some facts about how Arizona compares to other states.

Brief Comparison with Key States

To recap: Arizona's standard approval times for mail and online filings is 14-16 days. They have expedited processing options that range from two hours to next-day processing.

When it comes to states that have faster processing times, Delaware has faster expedited processing with a 1-hour option. Alabama, Alaska, Colorado, Kansas, Kentucky, Minnesota, Missouri, New York, South Dakota, Tennessee, Wisconsin and Wyoming have faster online filing because they all have immediate online processing times. And Ohio and Kentucky beat it with mail processing times of 1 day.

There are definitely states with slower time frames, as well. In terms of expedited processing, Maryland and Arizona are slower, with processing times of 7 and 5 days, respectively. Arizona and Texas have slower online processing times, coming in at 14-16 days and 13-15 days. And when it comes to mail, New York takes an incredible 8 months, while Maryland takes 5-8 weeks.

This means that Arizona is average, not being the fastest or the slowest.

Why is Arizona a Favorable Place for Forming an LLC?

Arizona has low corporate and personal income taxes, which is something that many business owners look at when considering a potential business location. They also have a large pool of employees ready to work for new businesses that offer new jobs for the state, which is great news for many businesses. And their formation times aren't excruciatingly long.