Arizona’s mimimum wage effective January 1, 2026 will be $15.15 an hour. This adjustment reflects the rise in the Consumer Price Index from August 2024 to August 2025. Some cities including Flagstaff have even higher minimum wage.
The Arizona Corporation Commission (ACC) has announced major changes to its business filing procedures aimed at preventing fraud and safeguarding business owners from unauthorized filings. On May 8, 2025, the Commission unanimously approved four new policies that will affect how Arizona limited liability companies (LLCs), PLLCs and corporations file and manage their records with the ACC.
These updates are part of a broader effort to protect the integrity of Arizona’s business environment while still making it easier for entrepreneurs and business owners to stay in compliance. Here’s a breakdown of the new policies and what they mean for your business.
To strengthen identity verification and prevent fraudulent filings, anyone submitting any document to the ACC on behalf of a business must present two forms of identification.
Acceptable ID combinations:
Primary IDs include:
Secondary IDs include:
Effective Date for ID Policy:
Note: Law firms and service companies using authorized representatives (“runners”) will follow a different identity verification process.
Practical Note: KEYTLaw, LLC, is an authorized representative, i.e., a “runner”) that can file documents with the Arizona Corporation Commission without submitting anybody’s IDs. Hire us to form your Arizona LLC or amend its Articles of Organization so you do not have to submit two forms of ID to the Arizona Corporation Commission.
LLC and PLLC members and managers can now designate who is allowed to sign on behalf of the company by completing and delivering a Signing Authority Form to the Arizona Corporation Commission.
Effective Date:
Practical Note: If we form your new Arizona LLC or PLLC we can also file a Signing Authority Form with the Arizona Corporation Commission that designates the members of your companyy that have the authority to file documents that affect the company.
To maintain accurate records and reduce fraudulent “zombie” LLCs, the ACC will require businesses to confirm their ongoing existence to the ACC.
Each January, LLCs that have not filed anything with the ACC for two years will receive an email notification. The business owner or statutory agent must confirm the LLC is still active by clicking a button in the ACC’s online portal. Important: Make sure the ACC always has a current email address for the LLC.
If no response is received within 60 days, the LLC will be labeled “pending inactive,” and the ACC will begin a 120-day process to administratively dissolve the company.
Effective Date:
Corporations will have the option to use their own versions of the Annual Report and Certificate of Disclosure forms—but only if:
Without the worksheet, custom filings will be rejected. Businesses may still choose to use the official ACC forms.
Effective Date:
These new policies are designed to:
📧 Email: [email protected]
📞 Call Center: (602) 542-3026
📞 Toll-Free (Arizona Only): 1 (800) 345-5819
Stay informed and make sure your LLC or corporation is prepared for these important changes.
My client who went to Bank of America to open a bank account for his LLC owned by his revocable living trust that he signed digitally sent me an email that said:
“I just went to Bank of America and they refused to open my bank account because [the trust was] not notarized. I showed them the statute from your help document for that exact situation and they didn’t seem to care and said it was per policy that they can’t accept the electronic signature.”
Because I know Bank of America, Wells Fargo, and Chase employ idiots, I give the purchasers of my Gold LLC formation package that includes a revocable living trust a letter that contains the following text:
What to Do If You Encounter an Idiot Banker Who Says the Trust Must be Notarized or the Bank Won’t Recognize Electronic Signatures
If you try to open a bank account and the banker says the bank will not open the account because your trust agreement and/or certification of trust was electronically signed or because they were not notarized then show the banker the text below that is the exact text contained in the applicable Arizona statutes.
Arizona Trust Law
The following Arizona statutes state how an Arizona trust is created. Note: These Arizona statutes do not require that an Arizona trust agreement be witnessed or notarized.
Arizona Revised Statues Section 14-10401. Methods of creating trust states:
“A trust may be created by:
1. Transfer of property to another person as trustee during the settlor’s lifetime or by will or other disposition taking effect on the settlor’s death.
2. Declaration by the owner of property that the owner holds identifiable property as trustee.
3. Exercise of a power of appointment in favor of a trustee.”
Arizona Revised Statues Section 14-10402. Requirements for creation of an Arizona trust states:
“A. A trust is created only if all of the following are true:
1. The settlor has capacity to create a trust.
2. The settlor indicates an intention to create the trust.
3. The trust has a definite beneficiary . . .
4. The trustee has duties to perform.
5. The same person is not the sole trustee and sole beneficiary. [Note: The same person is not the sole trustee and sole beneficiary of a trust if the trust has an initial trustee, a successor trustee, an initial beneficiary and one or more future beneficiaries.]
B. A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
Arizona’s Electronic Signature Statute
Arizona Revised Statues Section 44-7007. Legal recognition of electronic records, signatures and contracts states:
“A. A record or signature in electronic form cannot be denied legal effect and enforceability solely because the record or signature is in electronic form.
B. A contract formed by an electronic record cannot be denied legal effect and enforceability solely because an electronic record was used in its formation.
C. An electronic record satisfies any law that requires a record to be in writing.
D. An electronic signature satisfies any law that requires a signature.”
Do not try to open a bank account with Bank of America if your LLC is owned by a trust.
A distribution from a limited liability company (LLC) is a payment of cash or property made by an LLC to the LLC’s owners, also known as members. Although state law sets forth certain default rules, LLC members can specify in the LLC’s operating agreement when and how profits are allocated, distributed, and taxed.
Distribution Method and Timing
Under the default rules provided by most state LLC statutes, an LLC is not required to make any distributions to members before they withdraw from the LLC or it is dissolved. It is prudent for LLC members to create an operating agreement that specifies the method and schedule of distributions. Distributions can be made on a regular basis, such as monthly, quarterly, or at the end of the fiscal year; or based on specific events, such as the sale of assets or the liquidation of a member’s interests.
When determining the timing and size of distributions, the compensation needs of members must be considered alongside the needs of the business to grow earnings, cover expenses, and retain sufficient cash reserves. Often, distributions are made to enable members to pay taxes they owe on the LLC’s profits: because LLCs are generally pass-through entities, their members must pay taxes on LLC profits regardless of whether they receive a distribution of those profits.
Proportionate versus Disproportionate Distributions
Distributions can be made in direct proportion to how much of the LLC each member owns—an amount that is typically based on an owner’s capital contribution to the business. This is not required, however. Although state LLC laws may provide a default rule that members must share income distributions equally regardless of how much each member invested, the owners can override this in the operating agreement.
Profit Allocations versus Profit Distributions
Profit allocation and profit distribution are not the same thing in an LLC.
Note: Members should talk with their professional advisors about the LLC tax election that is most advantageous for their business model.
Recordkeeping
It is very important for the LLC and its members to maintain accurate records of distributions, such as a copy of the payment check or a printout of the bank transfer. This information should be kept with other business accounting records such as financial reports, cash flow statements, accounts receivable, payroll, and tax documents. Further, to keep track of each member’s interest in the LLC, LLCs should keep records called capital accounts to track their members’ initial investments in the LLC, subsequent contributions to the company, distributions they receive from the LLC, and the percentage of profit attributable to each member according to their membership interest percentage.
A capital account is not an actual, physical bank account. It is a recordkeeping account that exists only on paper, such as a spreadsheet, and effectively serves as a ledger. As with all recordkeeping, details matter. Detailed recordkeeping is important not only at tax time but also when a member leaves or the LLC is dissolved.
Question: I am completing IRS Form W-9, Request for Taxpayer Identification Number and Certification. Line 1 says “Name of entity/individual.” I am completing the W-9 for my single-member LLC. What do I put in line 1?
Answer: For a sole proprietor or disregarded entity, enter the owner’s name on line 1, and enter the business/disregarded entity’s name on line 2.
The following is the text of an email I got from Tanya M. Gibson, Director, Corporations Division of the Arizona Corporation Commission on May 1, 2024:
Hi, All! It has been a while since I have reached out. I hope everyone is well and staying cool!
I have good news to share! We have secured a vendor for our new filing system! Yes, we are replacing eCorp. We are excited because the new system is technologically advanced and offers a great deal of features and functionality that will enhance the customer experience, streamline filings, and better protect against fraudulent filings.
In the next month, we will kick-off the project and start outlining requirements and flows. Over the years, we have collected your suggestions but once we get into the project, I will reach out and get additional input from you all. We will also have beta testing prior to the launch which allow some of you to “test drive” the system before we release it….and while we still have time to make changes.
We anticipate going live with the new system around August of 2025.
Question: People frequently ask me why they should hire me, Richard Keyt, an Arizona LLC attorney who has formed 10,000+ AZ LLCs, to form their Arizona limited liability company instead of a non-law firm company I’ll call the “Nonlawyer LLC.”
Answer: People should hire me to form their AZ LLC for the following reasons:
Question: Can my lender call my loan that encumbers my land if I transfer the land to an LLC I own?
Answer: Probably not. The Federal National Mortgage Association, aka Fannie Mae, has something called Servicing Freddie Mac Mortgages Series 8000. Section 8406.4(b) Additional permitted Transfers of Ownership Effective 10/20/2021 states:
“Permitted Transfers of Ownership subject to conditions. In situations where all of the following conditions are met, Freddie Mac will permit a Transfer of Ownership of the Mortgaged Premises:
The managing member/general partner of the LLC/LP is the original Borrower. If there are multiple Borrowers, all of them must be members/partners of the LLC/LP, and at least one of them must be a managing member/general partner. If the transfer results in a permitted change of occupancy type to an investment property, such change must not violate the Security Instrument (e.g., the 12-month occupancy requirement for a Primary Residence), and
The Servicer notifies the original owner or natural person that the Mortgaged Premises transferred to an LLC/LP must be transferred back to the original owner or natural person prior to any subsequent refinance or modification application to meet Freddie Mac’s underwriting requirements
Fannie Mae ruling D1-4.1-02: Allowable Exemptions Due to the Type of Transfer (04/13/2022) says due on sale clauses cannot be enforced if the borrower transfers the encumbered land to a limited liability company. The rule states:
“the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer: . . . A transfer of the property (or, if the borrower is an inter vivos revocable trust, a transfer of a beneficial interest in the trust) to a limited liability company (LLC), provided that
Bottom line is Fannie Mae approves transfers of encumbered land without the lender being able to enforce a due on sale clause.
Question: Did you file my LLC as partnership? My tax accountant needs this information and a copy of that document.
Answer: You need to get a new accountant who understands LLCs and federal income tax law. It is not possible in any state to file an entity (corp or LLC) as a partnership for federal income tax purposes. The IRS’ default tax method for a multi-member LLC like your two member LLC is partnership. No need to file any papers with the IRS other than the LLC’s IRS form 1065, which is its partnership tax return. If the LLC wants to be taxed as an S corp it has to file an IRS form 2553. If your LLC did not file IRS form 2553 then it is automatically taxed as a partnership.
President of an Arizona nonprofit corporation I formed recently called while at the bank trying to open a bank account for the corporation. The corporation filed IRS form 1023EZ and was a 501(c)(3) tax-exempt charity. The banker said her bank could not open a bank account until the corporation could prove its “tax classification.” I asked her what she meant by “tax classification” and she said it means is the corporation a C corporation or an S corporation? I said neither because it is a 501(c)(3) tax-exempt charity. She insisted the corporation had to be a C or an S because she was ignorant of federal income tax law.
Bottom line: I told my client to go to another bank and hopefully would not be helped by a person who is a business idiot.
I do not recommend that businesses use Wells Fargo, Chase or Bank of America. They are not customer friendly.
Question: If my Arizona LLC is called Widget World, LLC and I want to use Best Widgets in my LLC’s advertisements do i need to file a DBA with Arizona?
Answer: DBAs in AZ are called trade names. If you use text that is not the full name of the LLC you should register that text as a trade name with the Arizona Secretary of State. Getting a trade name or dba from the Arizona Secretary of State is relatively easy to do. It’s a simple online application and the fee is $10. To learn how to get the trade name (aka dba) watch my Youtube video at:
Here’s the link to the Arizona Secretary of State’s trade name page:
Question: Client received a letter from Wells Fargo bank that said the client’s new LLC’s principal address on file with the Arizona Corporation Commission cannot be 24 W. Camelback Rd, #467, Phoenix, AZ 85013. That address is also the mailing address of the LLC’s statutory agent. Do I have to amend my LLC’s Articles of Organization to change the LLC’s principal address?
Answer: Arizona Revised Statues Section 29-2101.B states: “The Articles of Organization [of an LLC] must state. . . the [LLC’s] principal address, which may be the same as the mailing address of the company’s statutory agent.” Arizona Revised Statues Section 29-3102.20 defines Principal Address as “the mailing address of a limited liability company or foreign limited liability company, whether or not located in this state.”
24 W. Camelback Rd, #467, Phoenix, AZ 85013 is a UPS mail box. You are dealing with an idiot banker who is ignorant of Arizona LLC law. The banker is telling you that your LLC’s principal address stated in its Articles of Organization filed with the Arizona Corporation Commission cannot be the LLC’s statutory agent’s mailing address even though that address is expressly authorized in Arizona Revised Statues Section 29-2101.B. Only an uniformed idiot would say that. In forming 8,700+ LLCs I can only remember one other person whose banker said the same thing. It is very common for businesses to have a PO box or a UPS mail box.
The bank has no legal basis to say that the LLC’s principal address cannot be 24 W. Camelback Rd, #467, Phoenix, AZ 85013, because that is KEYTLaw, LLC’s, mailing address and KEYTLaw, LLC is the LLC’s statutory agent.
Recommendation: Go to another bank, but never use Wells Fargo, Bank of America or Chase Bank.
Question: I own a rental home that I want to put into an LLC for asset protection, but it is subject to a deed of trust that has a due on sale clause in it. If I form an LLC and convey the home to the LLC will the lender exercise the due on sale clause and demand I pay off the loan?
Answer: A due on sale clause is text in the deed of trust that says that the lender can demand payment of the balance owed on the loan if the borrower transfers ownership of the land. This is a common clause in residential loan documents.
I’ve formed 4,000+ AZ LLCs into which people transferred land that was subject to a mortgage or deed of trust. I’ve never had an LLC client’s lender call the loan because of the transfer. If your lender were to call your loan Arizona law says that if you cure the default by transferring the land back to you the lender must stop the foreclosure.
The purpose of a due on sale clause is to give the lender an option to call the loan when the borrower ceases to own or have any involvement with the land. When the borrower transfers the land to the borrower’s LLC the borrower continues to be involved with the land and will make the future payments. That’s why lenders don’t call the loan when the borrower transfers the land to the borrower’s LLC.
Advice: Don’t contact the lender and ask for permission. The standard response is you cannot do it and you may get yourself on the lender’s radar.
Question: What is a verified LLC phone number? I tried to open a bank account for my LLC at Chase Bank. The bank clerk said that he could not open a bank account for the LLC unless he could “verify” the LLC’s phone number. My client who is the sole member and manager of the LLC gave the banker all of his phone numbers. The banker was unable to verify any of the phone numbers and declined to open a bank account for the LLC.
Answer: I don’t have a clue what a verified phone number is. In forming 10,000+ Arizona LLCs since 1992 I’ve never had anybody call or email me and say their bank required a phone number (verified or unverified) to open a bank account. My advice was go to another bank, preferably not Chase, Wells Fargo or Bank of America.
Question: You setup an LLC for me that is owned by a revocable living trust you created. I gave the bank a copy of the Articles of Organization, the Operating Agreement, the Trust Agreement and the Certification of Trust, but the bank won’t open an account for the LLC unless you send the bank a letter that says that I am the trustee of the trust that is the member of the LLC?
Answer: You are dealing with an idiot banker because he/she wants somebody who is not an owner of the LLC or affiliated with the LLC, i.e., me, to sign a letter that states who owns the trust. Ask the idiot banker if another bank employee can sign the letter because that person has the same connections to the LLC and the trust as I have.
Your Certification of Trust and your Trust Agreement show that you are the trustee, aka the “owner” of the trust. Why doesn’t the banker know that? It’s because he or she is an idiot.
I’ve formed 8,700+ LLCs and only one other time has a bank idiot asked me to sign a letter before opening an account. The other time the idiot banker wanted me to sign a letter as the LLC’s statutory agent stating that the LLC’s address was the address displayed on the Arizona Corporation Commission website. Why wouldn’t the idiot ask the owner of the LLC to sign that letter?
Go to another bank or a different branch. I don’t recommend that LLC owners open accounts with Chase, Wells Fargo or Bank of America.
Question: I am interested in more information on Arizona Revised Statutes Section 44-1844.A. I am want to open a new business and I’m looking for investors. I want information on how to do it without affecting the Arizona Securities Division.
Answer: If you will offer interests in your LLC to investors in exchange for them paying money or value assets you are offering and selling a security and must comply with federal and state securities laws. If you fail to comply with federal and state securities laws and an investor loses money federal and state securities laws say the promoter(s) – you in this case – are liable for the loss.
You need to hire an experienced securities law attorney to advise you and prepare the documents needed to comply with federal and state securities laws. The cost of the legal advice is a cost of raising the capital. We do not provide securities law advice.
Question: You have formed most, if not all, of my LLCs over the years and I am grateful for the efficiency, cost and professionalism. I do have two quick questions.
Answer: The reason you want multiple LLCs to operate multiple businesses or own multiple real estate properties is because you don’t want all of your eggs in one basket. You know what happens if you drop the basket. You get the same result if one business or property causes a lawsuit against the LLC and there is a big judgment that exceeds the insurance – you lose all your eggs, aka businesses or properties.
A fundamental rule of LLC asset protection is that each LLC must have its own bank account into which its income is deposited and from which its expenses are paid. Each LLC also needs its own books. If you break this fundamental rule and a lawsuit is filed, a court is going to rule that because you are treating the LLCs as if there is only one LLC the court will do the same and allow all of the assets of the LLCs to be reached by a creditor of one of the LLCs.
On January 29, 1972, 50 years ago I married the love of my life. Finding and marrying Carol was the best thing that ever happened to me. I first saw Carol at a Phi Gamma Delta fraternity party at Penn State in the winter of 1967. I was a pledge and she had been invited to the frat party because her sister Ellen was pinned to one of my frat brothers. It wasn’t love at first sight, but I do remember I thought she was the prettiest girl I had ever seen.
We were both freshmen that winter. Carol dated a number of my fraternity brothers over the next two and a half years. At the beginning of my junior year I asked Ellen if she would fix me up with Carol and she did. Unfortunately for some reason I stood Carol up. I was a no show. Ellen was understandably mad and said she would never fix me up with Carol again.
The beginning of our senior year I got the courage to call Carol and ask for a date. Getting dates at PSU in 1966 – 1970, the years we attended PSU, was very hard for guys because there were five guys for every woman. My freshman year I called a girl for a date and she booked me six weeks later because that was her first opening.
Lucky for me Carol agreed to go out with me. We hit it off immediately and dated exclusively our senior year. After graduation I went to USAF Officer Training School at Lackland AFB, Texas, and Carol returned to her home town to take a job teaching in elementary school. We tried long distance dating, but it was hard in the days before the smart phone, facetime, email and texting.
In the fall of 1971 I was just beginning the six month program in which I learned how to fly the F-4 Phantom supersonic fighter-bomber at Luke AFB, Arizona.
F-4Es returning to Korat Royal Thai Air Base, Thailand, from missions over North Vietnam
I called Carol and asked her to marry me. She said yes. We didn’t have time to plan a wedding. On Friday, January 29, 1972, Carol and I were married in the Methodist Church at Central Avenue and Missouri Avenue in central Phoenix. Six people attended – my parents and brother, two of my parents’ friends and my best friend from college who happened to be passing through Phoenix. Unfortunately nobody from Carol’s side of the family was able to attend the wedding.
We drove to San Diego that afternoon for our short honeymoon. I had to be back to work on Monday so we drove back to Phoenix Sunday afternoon. We lived at Oakwood Garden apartments on 40th Street just north of Camelback Road, in Phoenix. I drove to Luke AFB everyday to fly the F-4, attend academic classes and fly the F-4 simulator. The traffic was much lighter back then, but it still took 45 minutes to drive one way.
In May of 1972, four months after we were married the Air Force sent me to the Vietnam war and Korea for 13 months. Carol stayed behind in our apartment and worked at American Express at 32nd Street and Lincoln in Phoenix. Carol lived with me in my one room barracks bedroom at Kunsan Air Base, Korea, for three weeks in 1973. During the 13 months I was overseas we wrote a lot of letters to each other. When I returned to the States we decided to destroy all our letters because we didn’t want our future children to read what we thought was too much “mushy” language. I now regret destroying those letters.
Carol and I have three children and four grandchildren. For the last 21 years Carol and I have worked closely in my law practice. She is the office manager and the bookkeeper. She is one of the reasons I’ve been able to have a very successful law practice.
I love my wife very much and thank God everyday for letting her be the love of my life.
On January 1, 2022, the following new Arizona laws became effective:
Calling it a key security issue, the Internal Revenue Service on July 31, 2021, urged entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information.
IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party – Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts.
The data around the “responsible parties” for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of who to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing.
As a result, the IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders. Starting in August, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated.
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number or EIN) of the true principal officer, general partner, grantor, owner or trustor.
The IRS defines the responsible party as the individual or entity who “controls, manages, or directs the applicant entity and the disposition of its funds and assets.”
Unless the applicant is a government entity, the responsible party must be an individual, not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
EINs are to be used strictly for tax administration purposes. Entities with EINs that are no longer in use should close their IRS tax accounts and follow steps outlined at Canceling an EIN – Closing Your Account.
Watch Five Things to Know about the Employer Identification Number