The “why’s” and “how’s” of Arizona LLCs

Choosing the right structure for your business is one of the most important steps in setting a strong foundation for growth and protection. For many entrepreneurs, professionals, and family businesses, forming a limited liability company, or LLC, offers the ideal balance of flexibility, simplicity, and security. This guide explains the key benefits of an LLC, the process of forming one in Arizona, and how Galbut Beabeau, P.C. can help you navigate each step with clarity and confidence.

Here is what you need to know.
Benefits of an LLC
A limited liability company (“LLC”) is a hybrid form of business entity that has features of both a corporation and a partnership. Similar to a corporation, LLCs protect you from personal liability by being a separate legal entity. This means, in most instances, your personal assets, like your vehicle, house, and savings accounts, won't be at risk in the event your LLC faces bankruptcy or lawsuits. Unlike a corporation, LLCs do not require “double taxation.” Profits and losses are “passed through” to the members (owners) and reported on their individual tax returns.

How to form your LLC
Forming an LLC has many components. Galbut Beabeau, P.C. has years of experience forming all types of LLCs and is happy to guide you through this process at an initial consultation.

Ownership and Management
LLCs are owned by the “members.” Members may include individuals, corporations, other LLCs, or trusts. Management of an LLC is reserved to its members unless the articles of organization provide that the company is managed by one or more managers. Determining whether to be member-managed or manager-managed is an important decision that Galbut Beabeau, P.C. is qualified to assist with.

The LLC’s Stat Agent
The Stat Agent is the designated person or entity, who is physically located within Arizona, that is authorized on behalf of the LLC to receive important legal and government documents. Galbut Beabeau, P.C. offers to serve as Stat Agent for all clients at no additional cost.

Articles of Organization
To form your LLC, you must completely and accurately file the Articles of Organization with the Arizona Corporation Commission (“ACC”), as this will become part of the public record. You must select a name, include your Stat Agent information, provide names and addresses of all members and mangers, and provide the LLC’s physical address, among other information. If any of this information is incomplete or inaccurate, the ACC will reject your filing. Galbut Beabeau, P.C. can assist you with filing your Articles of Organization so that your entity is properly formed.

Operating Agreement
The Operating Agreement governs (i) the relationship among the members and the LLC, (ii) the rights and duties of members and managers, (iii) the activities and affairs of the company and the conduct of those activities and affairs, and (iv) many other important provisions governing the LLC. Without an Operating Agreement, LLCs are governed by the Arizona Limited Liability Company Act. However, having an Operating Agreement is beneficial to your LLC, and Galbut Beabeau, P.C. is able to draft an Operating Agreement personalized for your LLC’s needs.

Corporate Formalities
Following formation, it is important to abide by “corporate formalities.” Corporate formalities include many items, but simply, they are the actions needed to be taken in order for the LLC to maintain its separate legal entity status. Failure to abide by the corporate formalities put members at risk of being personally liable for the LLC’s actions. Examples of corporate formalities include maintaining a business bank account, complying with required corporate filings, and maintaining accurate books and records. Following formation, Galbut Beabeau, P.C. is able to serve as your outside counsel and assist with maintaining corporate formalities.

Please note: This is only a high level summary and not to be viewed as an all encompassing guide to LLCs. For additional assistance or questions regarding LLCs, please contact Galbut Beabeau, P.C. for an initial consultation. Galbut Beabeau, P.C. does not offer any tax advice. You should consult your tax professional regarding any tax implications or required tax filings.

To learn more about Galbut Beabeau visit gb.law or contact us at gb.law/contact-us