Arizona Foreign Qualification

Arizona offers plenty of opportunities to businesses especially those planning to expand their entity or trading. The state provides a pro-business environment and a wide variety of tax incentives that can help lower your operating costs. The state has a strong transportation and logistics infrastructure and availability of a skilled workforce can make conducting business in this state almost a breeze. If you want to move your existing business from another state to this state then foreign qualification in Arizona is the process that you should opt for.

What is Arizona foreign qualification?

If you have already registered a corporation or an LLC in any state in the USA but are thinking of expanding your operations in Arizona then it is possible through a specific process. This process is known as foreign qualification in Arizona. The advantage of this process is that you will be able to operate your company in multiple states without the need to register or incorporate a new company. As a result, you will be able to operate your business in your home state (state of incorporation or registration) as well as the new state (Arizona).

Example: You have formed an LLC in Connecticut by filing the Certificate of Organization. Now, Connecticut will be known as your home state or home jurisdiction for the purpose of foreign qualification. You want to move or expand your LLC to Arizona. One option will be to close your Connecticut LLC and start a new domestic LLC in Arizona. If you don’t want to close your existing business then you can apply for Arizona LLC foreign registration. This process will provide you with the authority to transact business in this state.

Doing business in Arizona

When a business corporation, limited-liability Company, or any other form of entity is thinking of operating in any state other than their home state then foreign qualification is required. When we talk of operation, it signifies transacting in the new state or doing business. Foreign qualification in Arizona is based on transacting or doing business. There is a list of activities that are not considered as doing business and hence, any other activity apart from these will require you to apply for foreign business registration. According to the Arizona Revised Statutes, the following activities do not constitute doing business in Arizona.

• Maintaining, defending, or settling any legal action, lawsuit, or other proceedings in the state
• Holding any meetings of your company officials like board of directors, members, and shareholders
• Maintaining a business bank account
• Selling your product or service through an independent contractor
• Maintaining an office or agency for the transfer or exchange of a corporation’s own securities
• Acquiring mortgages or creating indebtedness through borrowing funds in Arizona
• If you own any real or personal property
• If your business transaction is a part of interstate commerce

Arizona Foreign Qualification Process

Arizona foreign business registration is also known as foreign qualification. This is a process that will vary according to the type of entity you are planning to form. So, the registration of a name or the authority to transact a business in this state will be different for an LLC or a corporation. If you are planning to foreign qualify your LLC or corporation then let’s delve deeper into the specific requirements of this state.

Arizona Foreign Corporation registration

If you have already incorporated in another state but want to expand your business to Arizona then you will need to undergo foreign qualification. There is a process for Arizona foreign corporation registration and it is governed by the 2019 Arizona Revised Statutes, Title 10 – Corporations and Associations, Chapter 15 – Foreign Corporation. As a part of the process, you will need to obtain an authority to transact business in this state. Let’s look at the important requirements for Arizona foreign business registration.

1. Corporate name of foreign corporation

In order to register an Arizona foreign corporation, you will need to register a business name. According to AZ Rev Stat § 10-1506 (2019), the name of a foreign corporation should include words and abbreviations like “corporation,” “incorporated,” or “inc.,” or “corp.” among others. The name should not include any language in the corporate name, which implies that your foreign corporation has been organized for any purpose other than what is being permitted by section 10-301.

2. DBA or Trade Name

If the Arizona foreign entity search reveals that your corporation’s existing name or chosen name is not available then you will need to opt for a DBA (Doing Business As) name. This is also known as a trade name in this state. Once you choose a DBA name, you need to conduct a DBA availability search on the website of the AZ Secretary of State. If the chosen trade name is available then you need to submit the Trade Name Registration Application. There is a filing fee of $10.

3. Registered Agent

Whether you form a domestic corporation or register an Arizona foreign corporation, service of process is a procedure that is applicable to all types of entities. Service of process is handled by a reputed or state-listed registered agent. Hence, it is mandatory by law for foreign corporations to hire and maintain a registered agent in this state. According to AZ Rev Stat § 10-1510 (2019), your Arizona foreign business registration will be rejected if you have not hired a registered agent in this state. We at IncParadise are one of the top Arizona registered agents and have helped several domestic and foreign entities to incorporate in this state.

4. Application for Authority

There is a process towards registration of Arizona foreign corporations. You will be required to file proper documents also known as the application for authority to transact business or conduct affairs in Arizona. This is governed by AZ Rev Stat § 10-1503 (2019) and has to be filed with the Arizona Corporation Commission – Examination Section. There is a fee of $175 for regular processing.

Do you want to register a foreign Corporation in Arizona?

Arizona Foreign LLC registration

A limited-liability company is one of the most popular business entities that entrepreneurs opt for. If you have already formed an LLC and are thinking of opening a branch company or expanding your operations in Arizona then this is one of the top pro-business states in the nation. The process to expand your business is by opting for Arizona LLC foreign registration. This is also known as foreign qualification and will be governed by 2019 Arizona Revised Statutes, Title 29 – Partnership, Chapter 4 Arizona Limited Liability Company Act, Article 9 Foreign Limited Liability Companies. The Arizona foreign business registration process for an LLC may be different from that of a corporation.

1. Business Name

If you plan on moving your business through Arizona LLC foreign registration then the first step would be to register a business name. You can register your existing business name if it is available. You can conduct an Arizona foreign entity search also known as name availability search. It is important to ensure your name has words or abbreviations like “limited liability company”, “L.L.C.” or “LLC”. If the existing LLC name is available then you can register the said name using the Application to Register Foreign Limited Liability Company Name. You will need to submit this application with the Arizona Corporation Commission – Examination Section along with a non-refundable fee of $10.

2. DBA or Fictitious Name

If the Arizona foreign entity search reveals unavailability of your existing LLC name then you can opt for a Doing Business As (DBA) name also known as a fictitious name or an assumed name. You will need to conduct a name search for the fictitious name. If it is available then register the same by filing the Trade Name Registration Application with the office of the Secretary of State pursuant to AZ Rev Stat § 29-804 (2019). There is a fee of $25.

3. Registered Agent

One of the important aspects of Arizona LLC foreign registration is service of process. This is executed by a registered agent in the state. According to AZ Rev Stat § 29-811 (2019), a foreign LLC has to continuously maintain a registered agent in the state. A reliable registered agent service like IncParadise, will not only fulfill service of process requirements in Arizona but also assist with all forms of Arizona foreign business registration and annual maintenance requirements.

4. Foreign Registration Statement

Once you have registered a business name and hired a registered agent in the state, the next step would be to file the right paperwork for Arizona LLC foreign registration. You will be required to file the certificate of registration also known as Foreign Registration Statement pursuant to AZ Rev Stat § 29-803 (2019). You will need to submit a Certificate of Existence also known as a Certificate of Good Standing acquired from the home state along with the registration statement. This statement has to be submitted with the Arizona Corporation Commission – Examination Section, along with a fee of $150.

Want to start a foreign LLC in Arizona?

Need Any Assistance in Applying for Arizona Foreign Qualification?

If you are planning to move your company or expand your business to Arizona then the state promises good regulatory laws, pro-business environment, committed workforce, state grants, and small business incentive programs. You don’t have to necessarily close your existing business to move to this state. You can simply apply for Arizona foreign business registration. This will ensure you are able to operate your company in Arizona as well as your home state.

Doing Business in Arizona

Over the last few decades, technology and innovation enabled industries in Arizona have grown in stature. Today, the state has one of the best collaborative business ecosystems in the country. The diverse tech ecosystem is helping towards accelerating innovation. By setting up your business in this ecosystem, you will not only benefit from a robust network of accelerators, incubators, and co-working spaces but will also be able to apply for a variety of Arizona small business incentives.

Why do businesses prefer doing business in Arizona?

Arizona is one of the best states for creating your business footprint. There are several factors that help entrepreneurs to establish and operate successfully like easy access to Arizona small business funding. In a world fueled by high competition and adaptability to evolving technology, an ideal location with a business-friendly ecosystem can be quite helpful. So, let us look at some of the factors that will help you to conduct your business in Arizona. These include:

• Tax Friendly State – One of the reasons why small business owners prefer to start a company in Arizona is low taxes. In fact, the state has a flat income tax rate of 2.5 percent, which is lower than several other states with flat income tax rates like Illinois, North Carolina, and Georgia. There is no estate or inheritance tax in this state. This will help in lowering the tax burden. On top of this, there is a wide variety of tax credit programs that you can participate in or apply for. These Arizona small business incentives programs have been designed to reduce your tax liability.

  Example: If your business creates high-quality employment opportunities in this state then you will be able to apply for the Quality Jobs Tax Credit (QJTC), which is a nonrefundable tax credit program. Similarly, if your business requires the use of heavy machinery then one of the top Arizona small business incentives programs is the Transaction privilege tax (TPT) exemption on various machinery or equipment.

• Business-Friendly Environment – Arizona is quite famous for offering both new and existing businesses an environment that is conducive for rapid growth. Some of the factors that contribute to the business-friendly environment include:
  • Good tax policies including tax exemptions
  • Availability of Arizona small business funding programs
  • Access to a diverse pool of highly motivated workforce
  • Accelerator and incubator programs for startups
  • Growing as a hub for testing as well as scaling of new technology
  • Top startup ecosystem in greater Phoenix
• Strategic Location – One of the salient aspects that is often undermined is the location of Arizona. If you look from the business perspective then it shares an international border with Mexico and a state border with Colorado, Utah, and New Mexico. It has a robust transportation and logistics infrastructure connecting the rest of the nation through Interstate highways.

Small Business Incentive Programs and Grants in Arizona

Arizona small business grants have been designed to provide small businesses with a financial helping hand. These grants are quite useful in the early stages or new company formation stage and even in the operational stage. Apart from grants, there are several other Arizona small business funding solutions available including traditional financing options as well as alternative financing sources. These funding options can help you to explore new opportunities for expansion of your company. You can even use them to conduct research and development (R&D) of new services or products. Let us get to know some of the top grants and other funding programs in the state.

Arizona Commerce Authority Programs

The Arizona Commerce Authority (ACA) is a leading economic development organization with the objective to assist with the growth and strengthening of the state’s economy. They have a three-pronged approach that focuses on recruiting, growing, and creation. They also offer a wide variety of Arizona small business grants and other funding programs that your business can leverage. They have programs that even provide tax relief and small business incentives. Let us take a look at some of the top Arizona small business funding programs by the ACA.

Tax Relief

The Arizona Commerce Authority (ACA) provides certain tax relief programs to small businesses. They are beneficial as these programs will help reduce your tax burden in this state. The Foreign Trade Zone (FTZ) program is one such solution. If your business is located in a zone or sub-zone that comes under a FTZ then you may be eligible for a maximum of 72.9 percent reduction in personal and state real property taxes. Similarly, the computer data center program is one of the top Arizona small business incentives programs. It provides exemptions in Transaction Privilege Tax (TPT) as well as use tax on qualifying purchases of computer data center equipment. This is applicable on the state as well as county level.

Talent and Training

The Arizona Commerce Authority (ACA) programs play a key role in preparing the state for creation of manufacturing jobs in the near future. Established businesses as well as startups in their growth stage are creating a higher number of jobs in the advanced manufacturing industry. This is due to the availability of Arizona small business funding and certain tax credit programs like the Quality Jobs tax credit and the Qualified Facility tax credit programs. You can also benefit from the Arizona Advanced Technology Network, which will provide you with an educated and highly skilled talent pipeline and thus cater to a rapidly expanding market.

Innovation and Entrepreneurship

There are certain programs that are considered to be a different type of Arizona small business incentives program like the Arizona Innovation Challenge (AIC). This is the largest business plan competition in the nation and finalists can receive an award of approximately $100,000. You can even gain access to their Venture Raise and Venture Scale programs that provide customized support. These are focused programs or accelerator courses that will introduce you to the world of startup financial health, various funding options to choose from, and pitching to investors. Apart from this, there is the pioneering IAM program that will provide you with necessary technical guidance and coordination for deployment of automation.

Small business opportunities

The Arizona Commerce Authority (ACA) plays a vital role in the creation of small business opportunities through several Arizona small business funding programs. The Arizona State Trade Expansion Program (AZSTEP) is quite a popular program for entrepreneurs like yourself. This program will assist you to enter export markets as a first time business owner or even help expand into newer markets. Then there is the State Small Business Credit Initiative (SSBCI), which is a federal program administered by the Department of Treasury. You will be able to participate in three programs under this, which are Arizona Loan Guarantee Program, Arizona Venture Co-Invest Program, and Arizona Multi-Fund Venture Capital Program.

Manufacturing opportunities

The economy of the state of Arizona relies heavily on traditional and technology driven manufacturing. So, if you are entering the manufacturing industry then there are several programs that will make doing business in Arizona financially less stressful. There are several sales tax exemptions on various manufacturing equipment like –

• Machinery or equipment that you will use directly in manufacturing
• If you use equipment for directly in producing or transmitting electrical power
• Any equipment or machinery being used for research and development

Rural economic development

If you are planning to start your Arizona business in a rural area or community then there are several targeted programs that you can benefit from. If you set up your company in an opportunity zone then there are dedicated Arizona small business incentives programs that you can participate in. In fact, Arizona is ranked #2 in terms of attracting opportunity fund capital. There is a budget of $2.29 billion allocated by the state for opportunity zones.

International trade

The Arizona Commerce Authority (ACA) is responsible for creating international trade opportunities for new and existing businesses. It has partnered with the Small Business Administration (SBA) for facilitating the Arizona State Trade Expansion Program (AZSTEP). As a part of the initiative, you will be able to participate in the international trade shows and expos while gaining ExporTech export education and planning development simultaneously. There are dedicated and innovative cross-border collaboration programs with Europe, Israel, Mexico, Republic of Korea, and Taiwan.

Form a Startup in Arizona Today!

Other Grants in Arizona

One of the key advantages of doing business in Arizona is the access to a wide variety of grants and tax exemption programs. These small business grants in Arizona play a key role in helping startups, home-based businesses, and first time entrepreneurs to grow sustainable businesses. Grants and other funding opportunities are provided at the state as well as county level. There are several grant programs administered by the government while others are being provided by private organizations. Some of the top grant programs include –

• Small business grant programs available in various cities or at a local level like the PHXbizGrants (City of Phoenix), Phoenix Flash Grants Program, City of Mesa Business Export Assistance Program (BEAP), and Town of Pinetop-Lakeside Façade Grant Program among others.
• There are women based grant programs like the highly popular Amber Grant where you can get a minimum grant of $10,000 and maximum of $25,000
• There is the Fearless Fund for under-resourced entrepreneurs where you can apply for pre-seed level or series A financing
• You can apply for Arizona advanced manufacturing facilities grant where you receive a maximum grant of $75,000.

Ready to Start a Business in Arizona!

If you are planning to start a new company then you will require some form of financial assistance in the initial stages. The Arizona small business incentives programs as well as other grants and loans can help fulfill financial requirements of your company. There are several types of funding options and opportunities that you can avail of in this state. You can even apply for tax credit and exemption programs that will lower your financial burden of doing business in Arizona.

Arizona Business Tax

Arizona business tax includes a wide range of taxes and they are levied on individuals and businesses. The taxes are normally levied on the profits earned by a company but can also be on the sales and purchase of products and services. A business tax is basically collected by the state government as it is a source of income for the state. Whether you register a domestic entity or operate as a foreign company, taxes are an integral part of this state’s annual requirement. Since every business will be levied a different type of tax, you may need an Arizona business tax Calculator to move forward with your overall tax planning including accounting and bookkeeping.

What taxes do businesses pay in Arizona?

Arizona is quite a popular destination for first time business owners and one key factor is its good tax environment. The state has one of the lowest flat tax rates in the USA and thus Arizona business tax climate is quite favorable for both domestic and foreign entities. You can choose to form different types of entities in this state right from a limited-liability Company to a C Corporation, sole proprietorship, general partnership, and an S Corporation. Each type of entity will have a different tax status in this state. Depending on the entity structure and the primary business activity, your company may have to file a single form of state tax or multiple taxes like Arizona LLC taxes including individual and state taxes. Let’s try to understand the different types of taxes applicable to new and existing businesses in this state.

Arizona corporate income tax

There are different categories of income taxes in the state and one of them is the Arizona corporate income tax. It is also known as the corporation tax and is levied on any taxable profits generated from your business. The taxable income may include several items like capital gains, investment profit, and trading profit. This type of Arizona Corporation taxes can be reduced through common tax-deductible expenses like operating expenses and employee salaries or bonuses among others. Currently, the rate of corporate income tax in Arizona is 4.9 percent.

Pass-through entity (PTE) tax

The Pass-through Entity (PTE) tax is considered as an entity-level income tax. This type of tax is applicable to mostly partnerships and subchapter S corporations. Currently, the rate of this Arizona corporate income tax is 2.50 percent of the income attributed to the S Corporation or partnership’s shareholders or resident partners. It is also applicable on any income derived from various sources within Arizona and attributed to nonresident shareholders or partners.

Small business income (SBI) tax

The Arizona Small Business Income Tax (SBI) is a fairly new form of tax that is often considered under Arizona LLC taxes. This allows an individual taxpayer to report his or her small business income on a separate return. There is a flat tax rate of 3 percent. It is important to note that the Arizona SBI tax return has to be filed along with the regular income tax return.

Transaction privilege tax (TPT)

The TPT is one of the most important forms of Arizona business tax. It is commonly referred to as the state sales tax. This type of tax is subjected to an individual or company for the privilege of conducting business in this state. There are various business activities that are subjected to the transaction privilege tax like advertising, telecommunications, residential rental, retail, and restaurants among others. You will need to use an Arizona business tax Calculator as the TPT tax rate varies according to the type of business activity and the county or city your company is operating from.

Local Arizona Taxes

There is the Arizona business tax also known as state tax and then there is the local tax. The most common form of local tax is the use tax. The use tax is often seen as a complement to the Transaction privilege tax (TPT). It is also filed using the TPT return. There are certain conditions in which this type of Arizona LLC taxes will be applicable. They are –

• If you make any out of state purchases towards operating your company and have not paid any sales tax on it or if the sales tax is less than that of Arizona use tax rate, then you will be required to file use tax.
• If you have purchased goods using a resale certificate, and if such goods have been stored, used, or consumed within the state contrary to the actual purpose stated in the certificate then will be required to pay use tax.

Arizona State Employer Taxes

State employer taxes are also known as Arizona Withholding Tax. This is additional to any Arizona corporate income tax and is purely based on the situation where your company has employees. If you have employed the services of people and are paying salary then you will need to withhold Arizona income tax from those employees. This is applicable for services being rendered within Arizona. This type of Arizona Corporation taxes is calculated on the basis of a percentage of your employee’s gross taxable wage. There are certain situations in which the withholding tax is not applicable like if you pay salary or wages to a nonresident employee.

Industry Taxes

When it comes to starting a new business in Arizona, it is important to know that you might be levied taxes if your business is connected to specific industries. These can be in the form of state tax or local taxes. For example – if you are operating from Mesa, AZ and are planning to invest in industrial or commercial property then there will be an assessment ratio for property taxes at the rate of 16.5 percent of the limited property value (LPV). Industries like aviation fuel will attract Arizona business tax. If you are producing aviation fuel or importing it into Arizona then the tax rate will be 5¢ per gallon.

Are you thinking of forming a new business in Arizona?

How Arizona Businesses are Taxed?

Once you form a new business in Arizona, your company will have to be compliant with both federal and state taxes in order to maintain good standing with the state. Your company may be required to file Arizona LLC taxes or some other form of taxes depending on the entity structure. The type of taxes levied will also vary according to the location of your company, the business activity, industry, employment. Let us look at the different types of entities and their tax obligations in this state.

Taxes for an LLC

If you are planning to register an Arizona limited-liability company then for tax purposes, it will be considered a pass-through entity. As a result, instead of filing Arizona corporate income tax, you will be required to file personal income tax at a flat rate of 2.50 percent. In a pass-through entity, the business income will pass through to the owners and other members. Apart from this income tax, there are other forms of Arizona LLC taxes that you may be required to file in this state.

Taxes for a C Corporation

If you are planning to incorporate in Arizona then you will be required to file Arizona corporate income tax. The current tax rate for corporate taxes is 4.9 percent. C Corporations may be required to file some of the following taxes –

• Transaction privilege tax (TPT) – This is a mandatory tax if you are selling a product or promoting a service specifically mentioned by the Arizona Department of Revenue.
• Use tax – This is one of the important Arizona Corporation taxes and is mostly levied for different business activities by specific counties.
• Corporate income tax – If you incorporate in this state then you will be required to file the Arizona corporate income tax.
• Individual Income tax – Shareholders and directors of a corporation will have to file individual income tax returns.
• Withholding Tax – If your company has employees then this tax return has to be filed.
• Other Taxes – Depending on your business activity and industry, you may be required to file certain other taxes. These include severance tax on metalliferous minerals, luxury tax on liquor, and workers’ compensation insurance premium tax among others.

Taxes for S Corporation

If you have started an LLC or a C Corporation and elect S Corporation tax status then one of the benefits is that you will not be subjected to the Arizona corporate income tax. S Corporation is a pass-through entity like an LLC hence each member or owner would be required to file personal income tax. S Corporations in this state may choose to file the Arizona Pass-Through Entity (PTE) income tax. Of course the PTE election needs to be done by the S Corporation prior to the due date or extended due date for filing of the state income tax return. You will be required to file Arizona Form 120S for the PTE election. This is one of the important Arizona Corporation taxes and the rate is a flat 2.50 percent of the income attributed to the S Corporation’s shareholders.

Taxes for a Sole Proprietorship

A sole proprietorship is one of the easiest forms of businesses. Once you form this type of company, you will need to report your profits by filing the individual income tax return. Apart from this, depending on the type of activity, you may be required to file an Arizona business tax in the form of transaction privilege tax, and use tax. You can also choose to file the Small Business Income Tax (SBI) where you have to report your small business income on a different return (Arizona Form 140ES-SBI) at a flat rate of 3.0 percent.

Taxes for Partnerships

If you form a partnership company in Arizona then the applicable taxes would be similar to that of taxes for sole proprietorships, S Corporations, or Arizona LLC taxes. Partners will be required to file individual tax returns based on the income they have earned through the business. Partnerships can also elect to file the Arizona Pass-Through Entity (PTE) income tax. If you are selling specific products or services then you will be required to file sales tax or the transaction privilege tax. You may also be required to file withholding tax.

Ready to Incorporate Your Arizona Company?

Arizona provides just the right business environment, good policies and regulations, and strong infrastructural support to new and existing businesses. You can choose to form different types of entities like Limited Liability Company, partnership firm, sole proprietorship, C Corporation, and S Corporation. Once you have formed or registered your company, you will need to ensure fulfillment of all annual state requirements including filing Arizona business tax. IncParadise can help you by providing information and assistance pertaining to business taxes and annual requirements.

Doing Business As or DBA in Arizona

A “Doing Business As” (DBA) name is also known as a trade name in Arizona. When you start a sole proprietorship or a single member LLC in Arizona, you may be required to list your business name with the state. Once you file a trade name in Arizona, it will be considered as the official legal name of your company. It is important to understand that not all businesses opt for a DBA. Some entities prefer a business name like CampusLogic while others prefer to use their own legal name like Carol Danvers Sports Equipment.

What is DBA in Arizona?

It is essential to understand what a trade name actually is before you can apply for Arizona DBA online. If your company or any company plans to use a name that is different from your legal name then such a company will be considered to be using a DBA or trade name. It is also known as an assumed name or fictitious name. Generally speaking, the name of your company can be any of the ones mentioned below –

• Your name or name of the owner like Maurice Jensen Inc.
• Traditional business name like Axon Technologies
• Trade name or DBA like Natalie’s Pie

When do you need a DBA in Arizona?

If you are planning to start a business and are a newcomer then there are certain aspects of operating a company that you need to be familiar with. One such aspect is providing a name to your company. Small businesses and first time individual owners normally prefer to go with a DBA also known as a trade name. Once you identify a name, filing a DBA in Arizona becomes necessary. But why a DBA? Do you actually need a DBA? These are some of the important questions that may arise in your mind. So, let’s look at some of the common reasons for choosing an Arizona trade name –

• Type of Structure – The structure of your company may be a decisive factor when it comes to opting for and filing an Arizona DBA online application. The most common and easy to form businesses are sole proprietorships and partnerships. You may use your full legal name or a trade name if you are opting for either entity structures. Even a general partnership company can select a DBA name. This is because these types of entities are considered as unincorporated businesses as they are not required to file any business registration paperwork with the state. Even a single-member LLC can choose to use a trade name in Arizona.
• Franchises – A doing business as name can be extremely beneficial if you are planning to operate a franchise business. A franchise owner may not require a DBA. As a franchise owner, you may file a trade name in Arizona to establish your company’s identity as a local or state business.

  Example: You bought a local Dickey’s BBQ restaurant franchise. Franchisees are normally formed as a corporation or ab LLC. Now, you form a franchise under Fastfood Business LLC. You will need to ensure your DBA is “Dickey’s BBQ”. This will help your state (Arizona) to know that you are “doing business as” the franchise you have joined.

• Operate a separate business – Normally, business corporations (S and C corporations), limited liability companies (LLC), and limited partnerships (LP) are technically not required to file a ‘doing business as’ name. However, if the state laws or local laws (city or county) requires these entities to apply for Arizona DBA online then you will need to choose a trade name. This requirement changes if you are planning to operate multiple businesses under the same name. If you were to expand your business area and open a new company then filing a DBA will spare you the hassle of registering or incorporating the new company.

Filing DBA in Arizona for LLC and Corporation

A DBA (doing business as) is known as a trade name in the state of Arizona. Whatever structure of business you choose like an LLC, general partnership, or a sole proprietorship, filing a DBA in Arizona will ensure registration of your company name. If you are wondering how you can look up a DBA in Arizona then there is a specific process to apply for and obtain a trade name certificate. The process as well as the fee may be different from that of the standard business name reservation process and fee.

Do Arizona Trade Name Search

If you want to apply for Arizona DBA online then the most important thing is to ensure it is compliant with Trade name laws of the state as well as other business name related rules and regulations. Once you have carefully thought of a company name, the next step would be to conduct an Arizona trade name search also known as DBA name availability search. This search is facilitated by the website of the AZ Secretary of State as well as the Arizona Corporations Commission website. It is important to note that you can file a DBA only if the search reveals availability of your chosen name. If your company name is not available then you will need to change the name and search again. You can conduct the name search using any of the following criteria’s –

• Trade name or DBA
• Statutory agent name
• Principal name
• Entity ID

Register your Arizona DBA

Once you conduct an Arizona trade name search, you will know if your chosen name is available or not. If your chosen name is available then the next step is to register the assumed name. You will need to submit the Trade Name Registration Application with the office of the Secretary of State pursuant to AZ Rev Stat § 44-1460 (2023). There is a filing fee of $10. If you want to expedite the process then there is an additional fee of $25.

Do you need help with an Arizona DBA?

Managing Arizona DBA

Once you file an Arizona DBA online application, the process will share certain information regarding your company with the state. The people of the state will know the name under which your business operates legally. The state of Arizona has rules and regulations pertaining to various aspects of a DBA or assumed name. These laws state the requirements for renewal, changing, or canceling of the trade name in the jurisdiction the business is operating from. Let’s look at the various processes applicable for managing an Arizona DBA.

How to renew Arizona DBA?

In most states, once you register a DBA then it will need to be renewed. Different states in the nation have different renewal dates or duration of expiry of an assumed name. Once you file a trade name in Arizona, it will expire after a period of 5 years from the date of registration. You will need to renew it for another five-year period and this is governed by the 2023 Arizona Revised Statutes, Title 44 – Trade and Commerce, § 44-1460.02. The Trade Name Renewal application has to be filed online with the office of the Secretary of State. There is a renewal fee of $10.

How to change Arizona DBA?

Once you have filed an Arizona DBA online application, the only way to change your business name is by canceling the existing name and filing an application for a new trade name. The process is easier for standard business names as all you have to do is submit Articles of Amendment.

How to cancel Arizona DBA?

You can cancel a trade name only after filing a DBA in Arizona. Once the name has been registered, you can file the online Trade Name Cancellation application with the office of the Secretary of State pursuant to AZ Rev Stat § 44-1460.07 (2023). There is no fee for cancellation.

Need Any Assistance in Filing Arizona DBA?

The process to file a trade name in Arizona requires you to provide accurate information while being compliant with the federal trademark laws as well as Arizona Revised Statutes. Conducting an Arizona trade name search is also of utmost importance as it will ensure your chosen name is not rejected by the state. IncParadise can assist you with this process. We have expertise and knowledge regarding the Arizona state rules and regulations pertaining to trade names and new businesses.

Sole Proprietorship in Arizona

Arizona is a growing and fast paced economy as is evident from the state’s real gross domestic product (GDP), which was $414.27 billion in 2023. You will be surprised to know that a large contribution to the GDP is from small businesses including sole proprietorships. There are over 650 thousand small businesses in this state evolving and growing in several key industries. One of the top industries that is home to sole proprietorships in Arizona is food and agricultural exports, and the growth of this has exceeded $1.4 billion. The state also provides several advantages if you are planning to start a new business. You can benefit from a strong infrastructure, robust transportation and logistics network, a highly skilled workforce, low cost of living, and technology hubs like Phoenix.

What is a sole proprietorship in Arizona?

If you are wondering how to start a sole proprietorship in Arizona then let us first try and understand the type of entity structure it has. In fact, a sole proprietorship is known to have the simplest structure as there is a single owner. Hence, it is also known as a sole trader. As opposed to corporations and LLC, this type of company requires minimal documentation. This entity is not considered to be a legal entity and hence you are not required to file any formation documents with the state. This makes it easier to start a sole proprietorship in Arizona. A sole tradership business has different taxation rules and you will not be required to file any federal or corporate taxes.

Important features of sole proprietorship in Arizona

A sole proprietorship in Arizona is a preferred entity structure for start-ups and even home-based businesses. There are several features that make this type of an entity so popular amongst first time business owners. Let’s take a look at some of the top features including the various benefits you may derive.

• The foremost feature of a sole proprietorship is that it is a one-man or single-owner organization. This means that decision making lies in the hands of the owner.
• If you search sole proprietorship in Arizona for laws, you will realize that this entity is considered as a natural person and not as a legal entity. The bottom-line is that the business and the owner are the same unlike in corporations.
• A sole proprietorship in Arizona does not have to be registered or incorporated. This makes it the ideal choice for operating a small or medium scale business.
• This type of entity has simple formation requirements. Similarly, closing a sole proprietorship is also very simple. There are hardly any legal processes involved and no requirement of any certificate of cancellation, termination or dissolution.
• As a business owner of a sole trader, you will not be required to share your profits unlike in other forms of entities.
• Sole proprietorship taxes are filed under the owner’s income tax return

Steps to Start Sole Proprietorship in Arizona

If you are wondering how you can start a sole proprietorship in Arizona then the important thing here is to understand the various steps you may need to take to make your business operational. There are some basic areas to focus on initially, like naming your company, getting business licenses for operations, ensuring you have a proper bank account etc. Let’s look at some of these important or core areas that will help you to start a sole proprietorship in Arizona with ease.

1. Prepare a business plan

Having a great business idea is the starting point but moving from here towards actually establishing and conducting a business is the real challenge. This is where a good business plan will come into play. It is also known as a strategic plan and encompasses several facets of running a company. This is the first goal in the how to start a sole proprietorship in Arizona checklist.

• Executive Summary
• Company Description
• Core Concept of your business
• Initial goals
• Long-term objectives
• Product and Services
• Target audience
• Competition and Market analysis
• Marketing Plan and Sales Tactics
• Operating plan
• Financial Plan and Projection

2. Choose an Arizona business name

You can start a sole proprietorship in Arizona only after you have named your company. This stands true for any form of business. The importance of a company name lies in the fact that it will not only communicate with your customer but also enable your business to stand out amidst competition. It is considered as the cornerstone of any brand and hence is integral to your marketing strategy. The business name is often also used for several other purposes like obtaining licenses and permits, registering an office, and applying for a bank account among others. Here are some tips to consider before you can choose and file an Arizona trade name.

• Follow the naming guidelines as provided in the Arizona Revised Statutes
• It is important to ensure your company name is not similar to that of your competitor
• Avoid business names that are hard to spell or pronounce
• Your chosen name should have a high recall value amongst prospective customers
• The name should be relevant to the product or services being offered
• After choosing a name, check for its availability as a domain name for your website
• If you want to keep short names then online business name generators can be quite helpful

3. File a Trade name and incorporation

If you have taken a decision to operate a sole proprietorship in Arizona then a business name is of utmost importance. You can either use your legal name as the business name or file an Arizona trade name also known as DBA (Doing Business As) name. The DBA or trade name will allow you to conduct your business under any name other than your legal name.

Do you want to start a sole proprietorship in Arizona?

4. Get EIN

Arizona is considered to be a community property state and hence even a couple (husband and wife) are allowed to operate a sole proprietorship company. Hence, if you form a sole proprietorship in Arizona, there will be no formal or state filings whatsoever but you may need to apply for an Employer Identification Number (EIN). This is also known as the Tax ID number or the Federal Tax Identification Number (TIN). This number is used for identifying a business entity.

• If you have hired at least one employee
• If you are planning to operate as a corporation
• If you are planning to operate as a partnership
• If your company is required to file a federal Employment tax return
• If your company is required to file excise tax return
• If your company is required to file Alcohol, Tobacco, and Firearms tax return
• You apply for a Keogh plan
• You are involved with entities like estates or trusts or plan administrators

5. Obtain necessary licenses and permits

If you are wondering how to start a sole proprietorship in Arizona and make it operational then it’s important to focus on business licenses. Any new or existing entity in the state including sole proprietorships will need to apply for and obtain relevant operational licenses in this state. It is important to note that if you start a home-based business then your company may be exempt from specific permit requirements. This rule may vary from one county or city to another. Business licensing in the state of Arizona can be categorized as under:

• Arizona transaction privilege tax (TPT)
• Professional or Occupational License
• City or County licenses and permits
• Regulated licenses
• Zoning permits

6. Open a bank account for your Arizona business

Whether you start a small business like a sole proprietorship or form a large corporation, there will be profits and losses. This is one of the primary reasons why your company would need to manage its finances properly. There are times when accepting business payments in personal savings accounts can lead to chaos especially in the tax season. The IRS and finance experts hence recommend that every company should have a business bank account. This will enable you to keep your personal gains separate from business gains. You can open this type of banking account before or after you form a sole proprietorship in Arizona.

7. Report and pay taxes

Once you have formed any business entity in the state of Arizona including a sole proprietorship, you will need to maintain compliance with the state. These are also known as annual maintenance requirements. Although sole proprietorships are not required to file an annual report, you will still have to file taxes. If you search sole proprietorship in Arizona for taxes then the primary would be a personal income tax return.

Ready to Start a Sole Proprietorship Business in Arizona

If you have decided to start a sole proprietorship in Arizona then it’s a good decision. This type of entity is easy to form and uncomplicated in terms of operations. You will not be required to submit any formation documents with the state. However, you will need to maintain annual compliances and your company will need to obtain relevant business licenses and permits. This will help you to enjoy a good standing with the state.

Business License in Arizona

In order to make your business operational in Arizona, there are several requirements that you will need to fulfill. These include registering your company with the state, paying taxes and obtaining an Arizona business license. Identifying the right license according to industries and jurisdictions can be quite tricky as the rules, requirements, and fees vary from city to city or county to county. You might not see a clear way forward. Nevertheless, if you fail to obtain an Arizona business license then that can be a costly affair for your company. Operating without the required license may lead to penalties including fines and lawsuits and in extreme cases, even dissolution of your company.

Who needs an Arizona business license?

Whether you form a sole proprietorship, LLC, corporation or any other form of domestic or foreign entity, Arizona business licenses and permits are mandatory. There are certain processes and steps you must follow to procure these licenses and permits. As a business owner, you will need to conduct a detailed Arizona business license search to identify the licenses required by your company. There are basically three forms of licenses –

• Federal Licenses and Permit
• State Licenses and Permit
• Local Licenses and Permit

What business license do I need in Arizona?

Many states in the USA have a common or general license for all types of entities. A general license is a basic license for operating within the state. The state of Arizona doesn’t have this general license also known as a statewide business license. Instead, you may need to obtain an Arizona business license and permit based on your primary business activity and location of the business. It is also important to note that there are several cities as well as counties where you need to apply for a local license prior to beginning operations. This is especially required when planning to operate within the city or county limits or jurisdiction.

Type of Business Licenses in Arizona

If you are planning to start an LLC or a corporation in Arizona then you would need to apply for different types of licenses or permits. You may be required to obtain an Arizona business license at the state level and the county level. Let’s take a look at the important licenses.

State Transaction Privilege (Sales) Tax (TPT) License

One of the most commonly required licenses in the state is the Transaction Privilege (Sales) Tax (TPT) License. This is a license based purely on business activity. If your company is into specific activities especially those connected to selling a specific product or engaging in a service then you will require this license. The Arizona Department of Revenue is responsible for issuing this license. You can conduct an Arizona business license search with the Arizona Department of Revenue or the Arizona Commerce Authority to identify if your business activity qualifies for this license. Some of the common activities requiring this license include Advertising, Feed at Wholesale, Transient Lodging (hotel/motel), Residential Rental, Restaurants and Bars, and Retail Sales Food for Home Consumption among others.

Business License/Local Licenses/Permits

You have registered a new business in Arizona. Its office is situated in the town of Queen Creek. This is a typical scenario in which a business will need to apply for state licenses as well as local licenses and permits. The local licenses are mandatory in some cities and counties. Hence, it is important to conduct an Arizona business license search to identify the specific permits or licenses required in the county or city or jurisdiction in which you are operating. The licensing regulations, requirements, and fee will vary from one jurisdiction to another.

Regulatory (Professional/Special) Licensing Permits

The third type of Arizona business license is known as the regulatory licenses or permits. This type of license will be required by your company if the primary activity requires supervision or regulation by single or multiple state, municipal, and federal government agencies. Some of the activities are defined under the professions and occupations category of the Colorado Code – Title 12. You may even need to apply for and obtain a special Arizona business license and permit or even certification wherever required. This is apart from the state and local licenses. Your business may require all three forms of license depending on the business activity.

Need any Assistance in Obtaining Your Arizona Business License?

If you are planning to establish an LLC or any new company in the state of Arizona then there are certain compliances to adhere to. These are also considered as state annual maintenance requirements. One such important requirement is obtaining an Arizona business license. This will help your company to become operational in the state. If you operate without the relevant licenses then you will be penalized. The type of Arizona business license and permits will vary according to business activity and location. Hence, it is important to conduct in-depth research of the state laws and local zonal requirements.