How to Start a Business in Arizona (2024 Guide) – Forbes Advisor

Before starting a new business, you need to think through your idea and turn it into an operationally viable business. This is best done by creating a business plan that outlines what your business is, who you will serve, how you will market to your target customers, and how you will organize your finances. .

A business plan serves as a blueprint for what you will do with your business and should be updated and reviewed several times a year once your business is launched. This way, you can always stay on track with your business goals and have a plan to show prospective investors.

Before you do anything officially, you need to choose a business entity. There are several business entities to choose from.

Sole proprietorships or partnerships are the simplest to form, but offer no liability protection or separation from personal taxes.

LLCs limit liability while passing profits to owners to address on their personal tax returns. Businesses can set up their own tax accounts to limit liability and calculate profits and expenses.

Before registering your company, make sure the name you plan to use isn't already used by another company. Search the Corporation Commission database.

Once you choose the type of organization you want to form, register it with the Arizona Secretary of State. Sole proprietors who use a name other than their legal name must apply for a business name with the Arizona Secretary of State for her $10.

Other entities file a limited liability partnership certificate, limited liability partnership status, articles of organization, or articles of incorporation with the Secretary of State. The cost is $10, or $3 per page for LP, LLP, and LLLP. It's $50 for LLCs and $60 for corporations.

LP, LLP, and LLLP forms can be mailed to:

Secretary of State Katie Hobbs
Destination: Limited Partnership
1700 W. Washington Street, FL 7
Phoenix, Arizona 85007-2808

LLC and corporation forms can be mailed to:

Arizona Corporation Commission
1300 W. Washington Street
Phoenix, Arizona 85007

Setting up finances for your new business is an important next step. Most businesses must obtain an Employer Identification Number (EIN) from the IRS website. This nine-digit number is used to identify your business for tax purposes when you open a bank account or open an unemployment account with your state.

Business finances should be kept separate from personal finances to avoid confusion regarding income and debt. Mixing funds creates confusion and can lead to costly mistakes.

Starting any business requires some amount of capital, even if you pay for it with your own savings. If your business plan requires a large amount of capital, consider getting a small business loan from the SBA or finding investors for your company. A well-developed business plan plays an important role in obtaining the necessary funding.

There is no set way to establish a business location. Many small business owners start out as a home-based business. However, if your business model requires a more specialized business space, you will need to find a location. Businesses that rely heavily on foot traffic may look to retail stores or crowded office buildings.

Please read the rental agreement carefully. In fact, it may be a good idea to have an attorney review the documents to ensure you fully understand the terms of the lease. It is not uncommon for landlords to transfer maintenance responsibilities to tenants. Be sure to be aware of the potential costs.

Although a general business license is not required in Arizona, check with your county or municipality to see if your business has any required local permits or permits. These are required in order before engaging in business activities.

If you sell goods or products and certain taxable services, you must obtain a Transaction Privilege Tax (TPT) license, also known as a sales tax license. This is done in collaboration with the Department of Revenue and can be completed online. Applications take 3-5 business days to process and cost $12 to obtain.

Before opening to the public, you should consider what insurance you need. Insurance is a low-cost way to protect against common liability claims such as slip and fall accidents and professional errors. If you rent your property, your landlord may require general liability insurance.

Businesses with at least one employee, whether full-time or part-time, must carry workers' compensation insurance. Talk to your insurance agent to find out which insurance makes sense for your business and which coverage you need.

conclusion

It's an exciting time to start a business in Arizona. Be sure to properly file your business incorporation documents and obtain your company's EIN (if required). To ensure your accounting is accurate, keep track of your books carefully and keep business and personal expenses separate. Once you start marketing your business, use your plan as a blueprint to stay on track and give yourself the best chance of success.