Forming LLCs

Elimination of the New LLC Newspaper Publication Requirement

Because the newspaper publication requirement for new Arizona limited liability companies will be eliminated on January 1, 2017, the Corporations Division of the Arizona Corporation Commission issued the following press release:

2/19/2016 – HB2447 – PUBLICATION OR POSTING ON ACC WEBSITE — HB2447, passed last legislative session, provides the public with options of publication in a newspaper or posting by the ACC if the known place of business is located in Maricopa County or Pima County. The ACC approval correspondence for documents subject to the bill will inform the submitter about the options. The database mandated by the revision to A.R.S. Section 10-130 is actually a new page on our website, and as of January 1, 2017 there will be a prominent link to it on the eCorp home page. Approved documents subject to the bill will automatically be posted after January 1, 2017, and the customer will not need to interact further with the ACC. There is no fee associated with the posting at this time.

Note: The elimination of the newspaper publication requirement only applies with respect to new Arizona LLCs that have a place of business located in Maricopa County or Pima County, Arizona. See my article called “Arizona Legislature’s HB 2447 Eliminates Newspaper Publication.”

Richard Keyt2016-12-27T20:20:02-07:00December 27th, 2016|Forming LLCs|0 Comments

S Corporation Ignorance

For the umpteen time today a client told me about the client’s discussion with a person who does not understand the difference between the type of entity formed under the law of one of the fifty states vs. the method of income tax applied to the entity by the Internal Revenue Code of 1986, as amended. The ignoramus said, “My company insists that it enter into a contract with your company, but only if your company is an S corp.” My client’s company is an LLC, but the ignorant person thinks his company cannot enter into a contract with the LLC because the LLC is not an “S corporation.”

Too many people, including CPAs and lawyers, do not understand that when they say the entity must be an S corporation they are mixing two concepts: (i) the type of entity formed under state law, and (ii) the income tax method applicable to the entity under the Internal Revenue Code. Just today I downloaded the materials to a webinar I will watch later today. The lawyer who is teaching the webinar created reference materials that constantly use the phrase “limited liability companies vs. ‘S’ corporation.” The lawyer knows better, but falls into the trap of loose talk about S corporations.

Not one single state in the United States allows people to create an S corporation. The states allow people to create, sole proprietorships, general partnerships, limited partnerships, limited liability partnerships, limited liability limited partnerships, for profit corporations, nonprofit corporations, benefit corporations, and limited liability companies. The term “S corporation” refers to a method of federal income tax applicable to an entity under the Internal Revenue Code. After forming your entity under state law you must then decide the federal income tax method you want to apply to your entity. If Homer Simpson forms a for profit corporation in Arizona and an Arizona LLC, he can cause both entities to be taxed under Subchapter S of the Internal Revenue Code by timely filing an IRS form 2553. The federal income tax law applies exactly the same to the corporation and the LLC taxed as S corporations.

P.S. Timely filing the IRS Form 2553 means filing the form with the IRS within the first two and one half months of the entity’s existence or within the first two and one half months after the beginning of a calendar year.

For more on this topic see my article called “LLCs vs. Corporations: Which Type of Arizona Entity Should You Form?“

Richard Keyt2017-05-29T09:32:16-07:00December 19th, 2016|FAQs, Forming LLCs, LLCs & Corporations, Operating Agreements, Tax Issues|0 Comments

Arizona LLC Alert System Includes 50 Email Messages

A lot of lawyers and document preparers form Arizona limited liability companies including yours truly. My LLC formation services, however, include many features nobody else offers. One of my unique services is the Arizona LLC Alert System, which is a series of email messages I send to people who purchase my Silver and Gold LLC packages.

In forming 9,300+ Arizona LLCs I learned a long time ago that people need help learning about and accomplishing the many post LLC formation tasks that arise when people form a new LLC. Here is a short list of common LLC post formation tasks:

Get federal employer ID number.
Open bank account in name of the LLC.
Arrange for all members to sign the Operating Agreement.
Set up a bookkeeping system.
Consult with tax accountant about which of the four ways an LLC can be taxed is best for the owner(s) of the LLC.
File IRS Form 8832 or 2553 if recommended by the LLC’s tax advisor.
Transfer land to the LLC by recording a deed (for LLCs that are to own real estate).
Purchase insurance.
Get a dba or trade name from the Arizona Secretary of State.
Register a federal trademark.

Another unique service I give purchasers of Silver and Gold LLCs is access to my 170 page ebook called the “Arizona LLC Operations Manual.” Chapter 3 of the Operations Manual is a checklist of 34 tasks the LLC should accomplish in its first 75 days after being formed. To help members of new LLCs I form accomplish these 34 tasks I created the Arizona LLC Alert System. It is a series of email messages I send to the members of Silver and Gold LLCs I form. These messages remind people to accomplish important LLC post formation tasks.

The Arizona LLC Alert System consists of 50 email message alerts. See the entire list of the 50 Alert emails now included in the Alert System. The Alert System sends members a mobile friendly email message that links to a mobile friendly web page where the actual content of the alert is displayed. Our LLC members love getting these informative alerts.

The following is a list of other unique LLC formation services I provide for all purchasers of my Silver and Gold LLC formation packages.

Two different Operating Agreements – a 30 page Operating Agreement for single member LLCs and husband and wife owned LLCs and a 55 page Operating Agreement for multi-member LLCs.
Provisions in the Operating Agreement needed as a result of the Bipartisan Budget Act of 2015, that modified the partnership audit rules applicable to LLCs.
Addition of Partnership Representative provisions in our multi-member LLC Operating Agreement. These provisions replace the tax matters partner provisions required under prior law called TEFRA.
Corporate Transparency Act filing information that explains what your LLC must do to avoid being fined $500/day by the Financial Crimes Enforcement Network for not filing its required FinCEN report about the beneficial owners of your LLC.
Optional Service: Members digitally sign the Operating Agreement and are sent pdf copies of the digitally signed documents.

Hire Me to Form Your Arizona LLC

See the contents of our Bronze, Silver and Gold LLC packages. To hire us to form an Arizona LLC follow one of the two options on our LLC formation page.

Richard Keyt2023-03-15T08:30:42-07:00August 29th, 2016|Forming LLCs, Operating LLCs|0 Comments

LegalZoom & Arizona LLC Newspaper Publication

Recently I received an email message from a person who is not my client that stated the following:

“I hired LegalZoom to form the LLC that I started here in Arizona . . . towards the end of 2014. Earlier this year I found out that . . . [the LLC] was never published in the newspapers ( I thought that this service what part of the package that I purchased from LegalZoom) I’m not quite sure what to do”

This is an example of why people should not use this document preparer to form an Arizona LLC. We always publish for every LLC we form. Publication is a requirement of Arizona LLC law.

Arizona Revised Statutes Section 29-635.C states:

“Within sixty days after the commission approves the filing, there shall be published in a newspaper of general circulation in the county of the known place of business, for three consecutive publications, a notice of the filing of such articles of organization”

Notice the language that says the notice SHALL be published. Arizona LLC law, however, does not state the consequence of failing to publish the notice timely. A third party could argue to a court that the failure to satisfy the publication requirement of Section 29-635.C means the LLC was not legally formed and therefore does not exist.

Because Arizona law is silent on the consequences of failing to publish, I recommend that LLCs that do not publish timely publish when they become aware of the fact the LLC did publish. Better late than never.

Author’s Note: As of January 1, 2017, Arizona Revised Statutes Section 29-635.C was amended to eliminate the newspaper publication requirement for LLCs that have a place of business in Maricopa County or Pima County.

Richard Keyt2017-02-26T09:13:05-07:00August 8th, 2016|Forming LLCs|0 Comments

How Do I Form an Arizona LLC in 2023?

by Arizona LLC attorney Richard Keyt who has formed 9,300+ LLCs

Question: How do I form an Arizona limited liability company?

Answer: Two ways: (1) hire me (see the “Contents of the $497 Bronze, $797 Silver & $1,297 Gold LLC Packages), or (2) do it yourself. There are two ways to form a do it yourself Arizona LLC:

Easy way: How to Form an Arizona LLC by Online efiling
Harder way: How to Form an Arizona LLC

Compare Forming an LLC Yourself with My LLC Formation Services

I have formed 9,300+ Arizona LLCs because I give my clients everything they need to know to operate the LLC during phase 2 and comply with Arizona LLC law. When I form an Arizona LLC for $797 (I pay the $85 ACC expedited filing fee), I provide many LLC formation services, including preparing the following custom drafted LLC documents:

Same Day Filing and Approval of the LLC’s Articles of Organization – I form LLCs and PLLCs the same day you approve the LLC formation questionnaire we send you and you pay our fee. We will email the Articles of Organization approved by the Arizona Corporation Commission to you the same day.

Operating Agreement – We prepare a custom Operating Agreement for every LLC and PLLC we form. This contract is the internal governing document for the LLC and its members. We have two Operating Agreements: (1) $297 for a one member LLC or an LLC owned by a married couple, or (2) $797 for a multi-member LLC. Buy our new LLC law compliant custom Operating Agreement. Learn Why All Arizona LLCs Need an Operating Agreement.

Members Digitally Sign the Operating Agreement – We send all members of multi-member LLCs an email from DocuSign so they can digitally sign the Operating Agreement. When all members have signed the Operating Agreement DocuSign will send every member a fully signed pdf version of the Operating Agreement.

Spousal Disclaimer – If a married member who is a resident of Arizona is to own his or her interest in the LLC as separate property, the non-owner spouse must sign a Disclaimer in which he/she disclaims any ownership of the LLC interest. If the non-owner spouse does not sign and deliver a Disclaimer to the owner spouse, Arizona law presumes that the spouses own the LLC as community property even if the non-owner spouse is not named in any of Articles of Organization or the Operating Agreement.

Arizona LLC Operations Manual – When we form a $797 Silver or a $1,297 Gold Arizona LLC we give all members of the LLC access to my 170 page ebook called the Arizona LLC Operations Manual. This book covers 75+ topics the members and managers of AZ LLCs must know. It has the answers to questions people commonly ask us after we form their LLC.

Organizational Resolutions – When we form a $797 Silver or a $1,297 Gold Arizona LLC we prepare resolutions to be signed by all of the members in which approve the issuance of membership interests, adoption of the Operating Agreement, opening a bank account, reimbursement of LLC formation expenses paid by any member, election of one or more managers and other formation related actions.

Membership Certificates – When we form a $797 Silver or a $1,297 Gold Arizona LLC we prepare a numbered membership certificate issued to each member. This is equivalent to a corporate stock certificate.

When we form a $797 Silver or a $1,297 Gold Arizona LLC we put all of your LLC documents in a nice portfolio with everything organized behind tabs.

For People Who Want to Form an LLC Themselves

If you think you might want to create a do-it-yourself Arizona LLC you must read Arizona LLC attorney Richard Keyt’s article called “Step by Step Guide: How to Form Arizona LLC 2023 in (6 Easy Steps).”

Free Answers to Your LLC or PLLC Questions

If you have questions about forming or operating Arizona LLCs or PLLCs call Arizona LLC attorneys Richard Keyt (the father) at 480-664-7478 and [email protected] or his son Richard C. Keyt at 480-664-7472 and [email protected]. To hire us to form an Arizona LLC or PLLC submit our online LLC formation questionnaire or call one of us and give us your information over the phone.

Richard Keyt2023-02-19T08:33:06-07:00July 14th, 2016|FAQs, Forming LLCs, How Do I|0 Comments

Arizona Legislature’s HB 2447 Eliminates Newspaper Publication

On May 17, 2016, Arizona Governor Doug Ducey signed Arizona Legislature House Bill 2447. This new law is a tremendous victory for the people and a huge defeat for Arizona newspapers. HB 2447 eliminates the long standing rip off known as the publication of legal notices when corporations or limited liability companies are formed in Arizona. Unfortunately, publication was eliminated only for entities with known places of business in Maricopa or Pima counties.

Beginning December 31, 2016, new Arizona LLCs and corporations with a known place of business in Maricopa and Pima Counties will not have to publish Articles of Incorporation (corporations) or Notices of Publication (LLCs) in a newspaper. Instead, the Arizona Corporation Commission will enter information about the newly formed entities into a database it is obligated to create.

HB 2447 states that publication is eliminated only for entities that have a known place of business in a county that has a population greater than 800,000. Currently only Maricopa County and Pima County have populations that exceed 800,000.

Entities that have known places of business in counties other than Maricopa and Pima must continue to donate money to the few Arizona Corporation Commission approved newspapers in the eleven counties with less than 800,000 people. Publication is a total rip off. For example, a few years ago we published Articles of Incorporation for a nonprofit corporation in a newspaper in a less populated county and it cost my client $600 after a 10% discount for the nonprofit corporation. Outrageous!

Richard Keyt2016-11-16T08:23:41-07:00May 24th, 2016|AZ Corporation Commission, Forming LLCs|0 Comments

New Arizona Law Exempts LLC Organizers from Arizona Securities Laws

Arizona House Bill 2303 signed into law by Governor Doug Ducey contains a significant change to Arizona’s securities laws. The new law allows the issuance of LLC membership interests to as many as ten LLC “organizers” to be exempt from Arizona securities laws.

Arizona Revised Statutes Section 44-1844.A was amended to read (new language is in bold red text):

“sections 44‑1841 and 44‑1842, section 44‑1843.02, subsections B and C and sections 44‑3321 and 44‑3325 do not apply to any of the following classes of transactions: . . .

10. The issuance and delivery of securities of a corporation, limited liability company or limited partnership to the original incorporators, organizers or general partners, not exceeding ten in number, where the securities are not acquired by the incorporators, organizers or general partners for the purpose of sale to others and are not directly or indirectly sold to a third party within twenty-four months unless an incorporator, organizer or general partner experiences a bona fide change of financial circumstances within such time period, providing original incorporators, organizers or general partners are notified of their right pursuant to title 10 or 29 to review the financial books and records of the corporation, limited liability company or limited partnership at reasonable times.”

The term “organizer” is not defined in any Arizona statutes. The Arizona Corporation Commission’s hard copy form Articles of Organization contains the following statements in Section 9 of the document:

“ORGANIZERS and SIGNATURE – the individual or pre-existing entity submitting this document is the Organizer – list the name of the Organizer below. If the Organizer is an individual, that individual must sign below. If the Organizer is a pre-existing entity, provide the signature of the individual acting for that entity, then print the individual’s name.”

Without any statutory reference that supports the statements, the first paragraph of the ACC’s instructions for its hard copy Articles of Organization states:

“One or more persons can form an Arizona LLC by signing and filing Articles of Organization with the Arizona Corporation Commission. . . . These persons are called “organizers.” “Person” includes individuals and entities.”

Significance of the New Law

This change in Arizona law is very important for every Arizona LLC that will issue membership interests that the securities regulators would designate as a security. If you think an LLC must issue stock to investors before it is considered issuing a security you are wrong.

If the promoters of the LLC say to an investor give me your money for an X% membership interest in our LLC and the LLC will make a profit for you the LLC is issuing a security to the investor. This is an example of an “investment contract,” which is a type of security under federal and state securities laws.

When securities laws apply to the issuance of membership interests in an LLC the LLC must comply with federal and applicable state securities laws or the promoters and the LLC become guarantors of the investors’ investments. Promoters who cause an LLC to issue membership interests that are securities the issuance of which does not comply with applicable securities laws will have substantial liability to the investors and to the securities regulators.

To learn more about securities laws and how they can affect LLCs read the article my son and I wrote called “California LLCs & Securities Laws.” Although the article is about California LLCs, many of the concepts apply to Arizona LLCs.

Bottom Line

If your to be formed Arizona LLC will be issuing membership interests to people or entities that are investing substantial amounts of money to purchase their membership interests, you must have EVERY INVESTOR (without exception, but no more than ten) sign the Articles of Organization as an organizer so the LLC can claim the exemptions provided from Arizona securities laws by Section 44-1844.A.10.

If you need your LLC to be able to use the ten exemptions provided in Arizona Revised Statutes Section 44-1844.A.10 hire us to form your LLC. Our Articles of Organization for LLCs that want to take advantage of Section Section 44-1844.A.10 contain special Section 44-1844.A.10 language.

Richard Keyt2019-07-04T10:40:31-07:00April 8th, 2016|Articles of Organization, Forming LLCs, LLCs & Securities Laws|0 Comments

How Can I See If My Desired LLC Name is Available?

Question: I intend to form a new Arizona limited liability company. I know that the Arizona Corporation Commission will reject my Articles of Organization if my desired LLC name conflicts with the name of an existing Arizona entity or an Arizona trade name issued by the Arizona Secretary of State. How can I insure that my desired LLC name will not be rejected by the ACC?

Answer: Actually, the latest version of the ACC’s online database has an easy to use name checker that will tell you if your desired name will be accepted or rejected. Here’s how to check a prospective LLC name.

Go the the Arizona Corporation’s name checker website.
Enter the desired name in the field called Entity Name:
Click on the Name Availability Check icon on the bottom center of the page to start the search.

The ACC’s database will then tell you if the desired name is available.

Name Reservation Warning: I don’t recommend that you waste $45 to reserve a name unless there is a lot of money riding on the name. Before purchasing a name reservation ask yourself this question: Given that the desired name has been available from the beginning of time up to the moment you checked the name, what are the chances somebody will use your desired name before you file your Articles of Organization?

Hire Us to Form an LLC

We’ve formed 9,300+ and have 373 five star reviews on Google and Birdeye because people love our low-priced LLC formation services. See the prices and contents of our three LLC packages. To hire us submit our online LLC formation questionnaire.

For free answers to questions about forming and operating Arizona LLCs and PLLCs call LLC attorneys Richard Keyt (the father) at 480-664-7478 or his son Richard C. Keyt at 480-664-7472.

Richard Keyt2020-06-06T10:14:03-07:00January 28th, 2016|Articles of Organization, AZ Corporation Commission, FAQs, Forming LLCs, How Do I|0 Comments

KEYTLaw Formed LLC’s Documents Stored in the Cloud

We are proud to announce that when Richard Keyt forms a Silver or Gold LLC KEYTLaw will upload and save all of the LLC’s documents to a secure folder in the cloud hosted by the Citrix ShareFile service. We are very excited to offer this new service that has the following features:

We send an email message to all LLC members notifying them that their LLC’s documents have been saved in the LLC’s ShareFile folder.

When the member clicks on the link in the Welcome email the member is taken to a ShareFile page that tells the member ShareFile sent the member an email message that contains an access code. The member is asked to check his or her inbox, copy the access code in the follow up email and paste the access code on the ShareFile web page.

When the member inserts the access code and clicks on the login button the member is taken to a secure web page on which the member enters a password, a confirmation of the password, first name and last name.

When the member saves the information the member is taken to a ShareFile folder in which all of the LLC’s documents are saved in Adobe .pdf format.

When logged in to the LLC’s ShareFile folder the member can: (1) download a document, (2) copy a document, (3) upload documents, and (4) share a file with another person.

ShareFile Security

ShareFile is a state of the art secure online document storage service. ShareFile’s security features include the following:

Data Protection During File Transfer

File transfer: ShareFile employs SSL/TLS protocols to protect client authentication, authorization and file transfers.

High-grade encryption: ShareFile secures files in transit with no less than 128-bit encryption using industry-standard encryption protocols.

File integrity: ShareFile employs a keyed hashed message authentication code (HMAC) to authenticate and ensure the integrity of intra-system communications. ShareFile verifies file size and file hash to ensure integrity.

Link generation: ShareFile download links are uniquely and randomly generated using strong hash-based message authentication codes. ShareFile provides technical countermeasures to protect links from guessing attacks.

Data Protection During Storage

Datacenters: ShareFile uses SSAE 16 Type II accredited or ISO 27001 certified datacenters to host the SaaS application and metadata. All files are stored in SSAE 16 Type II (SOC1), SOC2 and ISO 27001 accredited datacenters with high availability and durability ratings.

Encryption: ShareFile stores client files at rest using AES 256-bit encryption, a Federal Information Processing Standards (FIPS) encryption algorithm.

Firewalls: Files are processed using systems protected by securely configured firewalls that effectively limit and control access to network segments.

Redundant storage: Files are stored in replicate with leading Infrastructure-as-a-Service (IaaS) providers that ensure high file durability and availability.

Backup: Files are backed up according to configurable file-retention and versioning settings

We look forward to providing members of LLCs we form and clients with state of the art online document storage.

Richard Keyt2017-08-25T14:54:40-07:00October 18th, 2015|Forming LLCs, Members, Miscellaneous|0 Comments

Arizona LLCs Can Now Be Formed Online

The following is the text of a September 30, 2015, press release issued by the Arizona Corporation Commission:

Creating an LLC in Arizona just got a lot easier. The Arizona Corporation Commission is accepting online filings for the first time. Before the online efiling became available earlier this month, someone wishing to create a limited liability company had to either come to a Commission office or mail in the paperwork.

LLC formation is one of the commission’s most important missions, Commission Chairman Susan Bitter Smith said. Shortening the amount of time it takes to file the paperwork and making sure all necessary information is submitted up front allows a business to start functioning sooner.

‘I’m proud the commission now allows for a secure and easy way to create an LLC,’ Bitter Smith said. ‘This innovation makes it faster for people to start the businesses of their dreams.’

Last year, more than 52,000 Arizona businesses were formed as LLCs, many of those coming from people who drove to a commission office to submit paperwork. Filing for an LLC online can be done here http://ecorp.azcc.gov/Entity or by going to the commission’s home page www.azcc.gov

The ability to create an LLC through online filings won praise from the business community.

‘Electronic filing of LLC documents has been long awaited by the business community and I applaud the Commission for taking this bold step. Innovation such as this will make starting businesses in Arizona easier, more efficient, and timely,’ Greater Phoenix Chamber of Commerce President and CEO Todd Sanders said. ‘We look forward to the Commission expanding electronic services even further in the future.’

Commissioner Doug Little said the Commission is sending an important message to the business community.

‘I believe this innovation by the Commission will dramatically improve and streamline the process of establishing an LLC in Arizona,’ Little said. ‘This is exactly what we need to be doing to support Governor Ducey’s initiative to let people know that Arizona is ‘open for business.’”

Richard Keyt2018-05-31T16:52:03-07:00October 4th, 2015|Articles of Organization, AZ Corporation Commission, Forming LLCs|0 Comments

Arizona LLCs Are Eight Times More Popular Than Arizona Corporations

The Arizona Corporation Commission statistics for its fiscal year ending June 30, 2014, show that people are forming Arizona LLCs eight times more often than Arizona corporations. Most people forming Arizona corporations do not know that the corporation is an obsolete entity that should be used only in a few select circumstances.

I have formed 9,300+ Arizona limited liability companies since 2001, but less than 100 for profit Arizona corporations. For the reasons why there is such a big difference, see my article called “LLCs vs. Corporations: Which Type of Arizona Entity Should You Form?” See also“Contents of Arizona LLC Attorney Richard Keyt’s $597 Complete LLC Package” and Testimonials.

Richard Keyt2019-06-15T07:40:28-07:00July 1st, 2014|Forming LLCs, LLCs & Corporations|0 Comments

New IRS Procedure to Get EIN for an LLC Owned by a Nonresident Alien

Question: I am a not a U.S. citizen and I live outside the U.S., aka a “nonresident alien.” I formed a limited liability company in the U.S. How do I get a federal employer id number (EIN) for my LLC?

Answer: You can get the EIN one of two ways: the easy way or the not so easy way. Before January of 2014 we could get an EIN for an LLC we formed for a nonresident alien if the nonresident alien completed and signed an IRS form SS-4 that designated my legal assistant as a third party designee authorized to contact the IRS and get the EIN. My legal assistant would call the IRS international EIN number, fax the SS-4 to the IRS agent and spend about 45 minutes on the phone, but at the end of the call the IRS would give my legal assistant the EIN.

Beginning in January of 2014, the IRS canned that procedure. Now a company of any type owned by a nonresident alien gets an EIN for the company by one of the following two methods:

You should be able to get the EIN for the new LLC by using the IRS’ online wizard here:

Easy Way: If the nonresident alien has an IRS issued International Taxpayer Identification Number (ITIN), the nonresident alien can obtain the EIN in a 5 – 10 minute data entry session using the IRS’ online EIN wizard. After submitting all of the information the website will display the EIN. Be sure to print the page with the EIN and keep it in a safe place.

Hard Way: If the nonresident alien does not have an ITIN then he or she must complete and sign an IRS form SS-4 and fax or mail it to the IRS. Faxing the SS-4 to the IRS is the better method because the IRS will fax the EIN to the applicant in approximately four business days vs. three to four weeks if the SS-4 is mailed to the IRS. Prepare, sign and fax the IRS form SS-4 to the IRS at 859-669-5760.

To get a partially completed IRS form SS-4 for an LLC and my detailed instructions on how to fill out the form read my article called “How to Complete IRS Form SS-4.” Be sure to delete all the text at the bottom of the form in the Third Party Designee Fields and insert your name, phone number and fax number at the bottom of the form.

Richard Keyt2017-10-06T21:36:19-07:00June 5th, 2014|FAQs, Forming LLCs, Tax Issues|0 Comments

How Do I Complete IRS Form SS-4

Question: I just formed a limited liability company. I want a third party to obtain a federal employer id number (EIN) from the IRS. The form is confusing. Can you help me complete IRS Form SS-4?

Answer: Yes. We get this question so often LLC attorney Richard Keyt wrote a detailed article that explains how to complete the IRS Form SS-4. Read “How to Complete IRS Form SS-4.”

Note: If you are not asking a third party to get your LLC’s EIN don’t use IRS Form SS-4. Instead, go to the IRS’ EIN wizard and take five minutes to answer questions online. The IRS will issue your LLC an EIN at the end of the simple data entry process.

Watch this video to learn how to use the IRS’ online wizard to get an EIN for your LLC or PLLC.

Richard Keyt2023-10-24T10:15:45-07:00April 20th, 2014|FAQs, Forming LLCs, How Do I, Operating LLCs|0 Comments

Should I Pay the $50 or $85 Arizona LLC Filing Fee?

Question: I know the fee to file Articles of Organization to create a new Arizona limited liability company is $50 or $85. Why would I pay the $85 filing fee?

Answer: The main reason to pay the $85 expedited filing fee is because the Arizona Corporation Commission will review the new LLCs Articles of Organization and approve it (hopefully approve rather than reject) within 5 – 8 business days rather than the 30 – 35 business days that applies to the standard $50 filing fee. You should pay the $85 fee if any of the following apply to your LLC:

You need to open a bank account and your bank requires a copy of the LLC’s approved Articles of Organization and you can’t wait 30 – 35 business days.

You want the LLC to be able to take title to real estate and you can’t wait 30 – 35 business days. Escrow companies will not close a real estate purchase escrow if title insurance is to be issued to the new LLC until the ACC approves the Articles of Organization.

The LLC is to sign an important contract and the other party won’t sign the contract until the ACC approves the Articles of Organization.

To see the exact number of days for the ACC to review regular filings and expedited filings go to its document processing times webpage.

Richard Keyt2019-07-04T07:58:36-07:00March 12th, 2014|Articles of Organization, AZ Corporation Commission, FAQs, Forming LLCs|0 Comments

What is the Difference between the Silver & Gold LLC Formation Packages?

Question: Why would I purchase your $1,297 Gold LLC formation package instead of your $797 Silver LLC formation package?

Answer: The primary reason people purchase our Gold LLC formation package is confidentiality by keeping your name and address off the publice records of the Arizona Corporation Commission. Arizona LLC law requires that the Articles of Organization filed with the Arizona Corporation Commission (ACC) to create the LLC state the following information:

If the LLC is member managed, the names and addresses of all members, or
If the LLC is manager managed, the names and addresses of all members who own 20% or more of the LLC and all managers.

If you do not want your name as the owner of your LLC and your address to appear on the ACC’s public searchable internet database then you need to purchase my Gold LLC formation package. The Gold package includes a Confidential Trust that will be the legal owner of the LLC. A Confidential Trust is a revocable living trust in which the ultimate owner of the LLC is the trustmaker, trustee, and beneficiary.

For example, if the name of your Confidential Trust is the Laguna Beach Trust then the owner/member shown in the Articles of Organization filed with the ACC is the Laguana Beach Trust, c/o KEYTLaw, LLC, 7373 E. Doubletree Ranch Road, Suite 135, Scottsdale, AZ 85258.

Note: The Gold LLC formation package includes our address service for one year.

Second Reason to Buy Our Gold LLC Package

The second reason people buy our Gold LLC package is to avoid probate on the death of the ultimate owner or owners. All assets owned by the trust, including the LLC, will pass automatically to the heir(s) named in the trust agreement without the need for a probate when the initial beneficiary or beneficiaries die. Probate avoidance can save the heir(s) $3,500+ in attorneys fees that can be generated by a superior court probate.

Learn about the contents of our three LLC formation packages.

Richard Keyt2023-11-03T07:41:15-07:00February 15th, 2014|Articles of Organization, FAQs, Forming LLCs|0 Comments

Why is My Spouse Named as a Member in the Articles of Organization?

Question: Why did you list my spouse as a member of my Arizona LLC in its Articles of Organization?

Answer: Arizona is a community property state. Arizona law provides that all property acquired while married by either spouse who is an Arizona resident is community property unless it is acquired by gift or inheritance. This means that if one spouse of a married couple who reside in Arizona acquires a membership interest in an Arizona by then both spouses automatically own the interest as community property unless the non-owner spouse signs a disclaimer in which the non-owner spouse disclaims all ownership of the membership interest.

Because you told me that you wanted to own your membership interest in the LLC as community property I named both spouses as members of the LLC in its Articles of Organization. Arizona law provides that it is a felony to file Articles of Organization with the Arizona Corporation Commission if contains known factual misrepresentations. If one spouse owns his or her membership interest as separate property then the non-owner spouse should not be named as a member in the Articles of Organization.

Richard Keyt2013-09-20T07:17:39-07:00September 20th, 2013|Articles of Organization, FAQs, Forming LLCs|0 Comments

How an LLC Owned by a NonUS Citizen / NonUS Resident Opens a US Bank Account

Question: I am not a resident or citizen of the United States. I want to form a limited liability company in the U.S. to own and operate a business or to own investment real estate. How do I open a bank account in the name of the LLC?

Answer: I form a lot of Arizona LLCs for people who are not residents or citizens of the United States, aka nonresident aliens. Opening a US bank account for the US LLC can be a very big problem. The US Patriot Act imposes substantial limits and restrictions on the ability of a US bank with respect to creating a US bank account for a people and entities.

The number one new account requirement is that the bank must positively identify the person who seeks to open the bank account. Positive ID means two things:

Sufficient documentation such as a passport to prove the identity of the person who seeks to open the bank account, and

The presence of the person who seeks to open the bank account personally in front of the bank employee who is opening the account.

The banks seem to be getting tougher with respect to the personal ID requirement. This week I met with a nonresident alien client from Australia who opened two LLC bank accounts with Wells Fargo for his two Arizona LLCs two years ago. He did come to Phoenix to present himself to the bank personnel in order to open the accounts.

The client told me that he came to Phoenix this week because Wells Fargo notified him that it was closing ALL LLC BANK ACCOUNTS IN THE US IF THE LLC IS OWNED BY A NONRESIDENT ALIEN OR ALIENS. Wells Fargo closed his LLC bank accounts, but did allow him to open a personal bank account while he was present at the bank.

If somebody tells you that they know of a bank that will open an LLC bank account for a nonresident alien without the need for the nonresident alien satisfying the two requirements described above, don’t buy it. I personally know that MidFirst Bank and Commerica Bank had opened LLC bank accounts without requiring the nonresident alien owner of the LLC to satisfy the two requirements listed above. When supervisors found out about the accounts, they closed the accounts and fired the bank officer.

One potential solution to the problem is for the LLC to have a member or manager that is a US citizen or legal resident. That person could open a bank account in the US for the LLC. However, this solution creates its own set of problems. The person who opens the bank account is taking a risk that if the LLC is involved with anything that is illegal he or she could be in big trouble, perhaps criminal trouble.

Richard Keyt2023-04-06T12:23:31-07:00September 5th, 2013|Bank Problems, FAQs, Forming LLCs, How Do I, Questions People Ask|3 Comments

Can an Arizona LLC’s Address be a Post Office Box?

Question: I know that all LLCs formed in Arizona must file Articles of Organization with the Arizona Corporation Commission in which the LLC notifies the ACC of its known place of business in Arizona. Can the LLC’s address be a U.S. post office box?

Answer: No. The ACC used to allow LLCs to use a PO box for the LLC’s address, but it burped last year and decided to outlaw U.S. post office boxes for the LLC’s Arizona address. US post office boxes are fine for members and managers, but if you try to file Articles of Organization that state that the LLC’s address is a US P.O. box the ACC will reject the Articles.

Richard Keyt2013-08-22T20:04:48-07:00August 22nd, 2013|Articles of Organization, FAQs, Forming LLCs|0 Comments

Is Publication in a Newspaper Optional for a New Arizona LLC?

Question: How important is it to publish a Notice of Publication for your Arizona LLC after it is formed?

Answer: If newspaper publication is required the failure to publish timely could cause a court to deny the existence of the LLC, which could cause the members to become liable for its debts and liabilities.

Arizona LLC law requires that a notice of publication for the new Arizona LLC to be published in an Arizona Corporation Commission approved newspaper within 60 days after the ACC approves the filing if the company’s statutory agent is not located in Maricopa or Pima County. Arizona Revised Statutes Section 29-3201.G states:

“Within sixty days after the Commission files the Articles of Organization, either of the following must occur:

1. a notice of the filing of the Articles shall be published in a newspaper of general circulation in the county of the statutory agent’s street address for three consecutive publications containing the information required in subsection B of this Section. an affidavit evidencing the publication may be filed with the Commission.

2. the Commission shall input the information regarding the approval into the database as prescribed by Section 10-130 if the statutory agent’s street address is in a county with a population of more than eight hundred thousand persons.”

Because Section 29-3201.G.1 uses the word “shall” I interpret Arizona LLC law to say that publication within the required period is a requirement to the valid formation of the Arizona LLC whose statutory agent is not located in Maricopa or Pima county. An LLC that fails to publish within the required period opens itself up to a challenge by a creditor in court that the LLC was not formed as required by Arizona LLC law and therefor does not exist. If the court agreed with that argument then all of the members of the LLC would potentially be liable for the LLC’s debts and obligations.

Bottom Line: Publication is not an option when the company’s statutory agent is not located in Maricopa or Pima county. Every new Arizona LLC that does not have a statutory agent located in Maricopa or Pima county should always publish in an approved newspaper in the appropriate county within 60 days of the Arizona Corporation Commission approving the submitted Articles of Organization AND it should deliver an affidavit of publication to the ACC so it can put proof of publication online for the world to see.

Richard Keyt2021-01-02T15:46:14-07:00August 13th, 2013|AZ Corporation Commission, FAQs, Forming LLCs|2 Comments

Can I See Your LLC Documents before You Form My LLC?

This week a man inquired about my LLC formation services. He asked if he would see the Articles of Organization and Operating Agreement before I formed the LLC. I said normally I prepared and filed the Articles of Organization and prepared the Operating Agreement without first sending the documents to my client.

The man said “I am appalled.” He added that he was offended that I would have the gall to prepare LLC documents without his prior input.

I said that in forming 9,300+ Arizona LLCs not once had I ever sent both of these documents to the owner of the LLC before forming the company. Nor had anybody ever asked me to see either document before I filed the Articles of Organization with the Arizona Corporation Commission. When I send the Operating Agreement to an LLC member I ask the member to review the document and to let me know if he or she wants to modify the Operating Agreement.

I also said that I would be happy to send the man both documents before I formed the company to get his input and make changes if necessary. Despite my offer, the man was too offended by my long-time practice and he declined to hire me to form his LLC.

The whole discussion was surreal. I could not imagine why a person who had never seen Articles of Organization or an Operating Agreement and had never owned an LLC would think that he or she needed to review the documents before I filed the Articles of Organization. I cannot remember anybody ever asking me to modify my three page custom drafted Articles of Organization (before or after I filed the document).

From time to time people do want to make minor modifications to my Operating Agreement. Sometimes people even want to make major changes to my Operating Agreement. In fact, the day after the angry would-be LLC expert declined to hire me to form his LLC another person hired me to form an LLC and gave me six pages of text that the members of her new LLC wanted included in my Operating Agreement. I was happy to include the client supplied provisions, subject to charging for attorney time to revise the document.

Bottom line: As you can imagine, after forming 9,300+ Arizona LLCs my documents are excellent, but if you want to modify my Articles of Organization or Operating Agreement, I am happy to do so unless I believe a change would be inappropriate.

Richard Keyt2019-06-15T07:29:27-07:00August 4th, 2013|Articles of Organization, Forming LLCs, Operating Agreements|0 Comments

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