How Do I

I Want Investors to Invest in My LLC

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.

Richard Keyt2023-03-13T12:42:00-07:00March 13th, 2023|FAQs, How Do I, LLCs & Securities Laws, Questions People Ask|0 Comments

3 Ways Your Loved One Will Be Harmed If You Own an LLC & Do Not Prepare for Death

If a member of an Arizona LLC dies and the member did not take action to protect the member’s loved one(s) bad things will happen. The failure to plan for death creates the following problems:

1. The membership interest of the deceased member may not be inherited by the person or people the deceased member would want to inherit the membership interest.

2. A person who inherits the membership interest of a deceased member of a multi-member LLC will not be a member of the LLC. Instead, the heir will acquire only an economic interest in the LLC, which means the heir(s) will not be able to vote on any issue or receive records that all members have a right to receive.

3. The person who inherits the LLC interest may have to do an expensive and time consuming court probate to change ownership of the LLC.

Click on the blue text below or the + icon to open the text box to see the explanation of each problem.

Problem 1: The Person Who Inherits Your LLC After Your Death May Not be the Person You Want to Inherit It

If you do not have a will or a trust that states who inherits your interest in the LLC if you die the LLC will go to the person or people selected by the intestate succession law of your state of residence. Your state’s plan for who inherits may be different from who you want to inherit the LLC.

If you are an Arizona resident see “Who Inherits Property of an Arizona Resident Who Dies without a Will or a Trust?“

Example 1: Bob Jones owns his LLC as his separate property. He is married to Linda and has two children from a prior marriage. Bob wants Linda to inherit all of his valuable LLC. Bob dies without a Will or trust that designates who inherits the LLC. The law of intestate succession of Bob’s state of residence gives one half of the LLC to Linda and the other half to Bob’s children equally.

Solution: Bob should have signed a will or a trust that named Linda as the sole heir of Bob’s interest in the LLC.

Example 2: Bob Jones invests $90,000 in J&F LLC and owns a 90% membership interest. Linda is Bob’s significant other of 20 years. Ned Flanders invests $10,000 and owns 10%. Bob dies without a Will or a trust. Instead of the 90% interest in the LLC going to Linda the law of intestate succession of Bob’s state of residence gives the LLC interest to Bob’s son whom Bob hasn’t heard from in 25 years. Linda gets none of the LLC.

Solution: Bob should have signed a will or a trust that named Linda as the sole heir of Bob’s interest in the LLC.

Example 3: Bob Jones is single and has three kids. Bob wants his entire interest in his LLC to go to his daughter Maggie who works in the business with Bob. Bob dies without a Will or trust. The law of intestate succession of Bob’s state of residence gives the LLC interest equally to Bob’s three kids. Maggie gets one third of the LLC instead of all of it.

Solution: Bob should have signed a will or a trust that named Maggie as the sole heir of Bob’s interest in the LLC.

Example 4: Bob Jones is single. He wants his brother James to inherit his LLC. Bob dies without a Will or a trust. The law of intestate succession of Bob’s state of residence gives the LLC interest to Bob’s parents. James gets nothing.

Solution: Bob should have signed a will or a trust that named Linda as the sole heir of Bob’s interest in the LLC.

Problem 2: Your Heir Will Not be a Voting Member of the LLC

Arizona Revised Statutes Section 29-3502 states:

A. A transfer, in whole or in part, of a transferable interest does not entitle the transferee to either of the following:

(a) participate in the management or conduct of the company’s activities and affairs.

(b) . . . have access to records or other information concerning the company’s activities and affairs.

B. A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

This statute prevents an heir from voting on LLC matters and getting information about the LLC.

Example 5: Same facts as Example 2 above, but the good news is that Bob’s Will left Bob’s 90% interest in the LLC to Linda. Because of Section 29-3502 Linda does not have any voting rights and can’t get any information about the LLC. Linda inherited only an economic interest in the LLC, not a membership interest. This means that Ned Flanders who owns 10% of the LLC is the only voting member and now has total control of the LLC that Linda has a right to receive 90% of the and distributions.

Solution: The Operating Agreement of the LLC signed by Bob and Ned should have had a clause that stated that Bob’s heir Linda would automatically become a member of the LLC entitled to all rights of membership on Bob’s death. Our Operating Agreements contain this language.

Problem 3: Your Heir May be Forced to Do an Expensive & Time-Consuming Probate

If you die and your LLC is not owned by your trust your heir(s) may be forced to open a probate with a court in your state of residence to transfer ownership of the LLC to your heir(s). We are Arizona probate lawyers. Our fee to do an uncontested Arizona probate is $2,500 – $3,500 and it takes five or six months.

If you are an Arizona resident and the value of ALL of your personal property including your LLC is less than $75,000 your heir(s) can avoid probate by preparing a small estate affidavit.

Example 6: Bob dies without a Will or a trust. The total value of his personal property exceeds $75,000. Bob’s wife inherited his LLC interest under Arizona’s law of intestate succession, but she has to spend $3,500 to hire an attorney to do a probate.

Solution: If Bob had signed trust the LLC interest would have passed automatically to his wife on Bob’s death without the need for a probate.

Richard Keyt2023-11-01T10:18:05-07:00November 26th, 2020|FAQs, How Do I, Members, Operating Agreements|0 Comments

IRS Employer ID Number (EIN) Warning for New LLCs & Corporations

The Internal Revenue Service has an online wizard that allows people to apply for and receive an employer identification number (EIN) for a company in a 5 – 10 minute data entry session. Companies need an EIN to open a bank account and file federal tax returns. See our EIN online wizard video that shows how to complete the online application.

Usually the online EIN wizard works great and people can quickly get an EIN for a newly formed company. Unfortunately the online wizard sometimes rejects an EIN application because of “Reference Number 101,” which usually means the company’s name is the same as or too similar to another company’s name. The wizard displays this message:

“We are unable to provide you with an EIN. We apologize for the inconvenience, but based on the information provided we are unable to provide you with an EIN through this online assistant. Please call 1-800-829-4933 for assistance. When outside the US, call 267-941-1099. TTY/TDD: 1-800-829-4059. Please have your information readily available, and mention reference number 101.”

If you get the above message then your company must apply for its EIN by faxing its SS-4 application to the IRS at 855-641-6935. After getting this rejection message we’ve called the IRS and been told that it will be 45 days before the IRS issues the EIN.

Note: A one member LLC or an LLC owned only by a married couple as community property can use the social security number of one of the members to open the LLC’s bank account.

If getting your new company’s EIN immediately instead of in 45 days you have two options: (1) go with your desired name and take a chance that the EIN application will not be rejected, or (2) make the name of your company unique and a name that no other company will have.

Richard Keyt2021-08-18T10:38:31-07:00October 28th, 2020|Forming LLCs, How Do I, Tax Issues|0 Comments

How to Form an LLC in Arizona FAQ

Because people ask us the same LLC formation questions over and over I created an article called “How to Form an LLC in Arizona FAQ” that answers these LLC frequently asked questions. The questions and answers are:

How do I start an LLC in Arizona?
How much does it cost to form an LLC in Arizona?
How long does it take to form an LLC in Arizona?
Do I have to publish my LLC AZ and Do I have to publish my LLC?
What happens if you don’t publish your LLC?
How do I start a LLC company?
Can I start an LLC by myself?
Do I need an Arizona business license?
How do I set up an LLC in Arizona?
How long does an LLC take to process?
How LLC’s are taxed?
How are LLCs taxed in Arizona?

If you have any LLC questions that are not answered in my article, call me on my direct line at 480-664-7478 or send an email message to me at [email protected]. You can also book a free phone, office or Zoom video consultation with using my online calendar at www.keytlaw.com/rk.

To hire me to form an Arizona LLC for ($497 Bronze, $797 Silver & $1,297 Gold [the confidential LLC]) submit my LLC Formation Questionnaire or call me and give me your info over the phone. Our Gold LLC is the confidential LLC for people who do not want their name and address on the Arizona Corporation Commission’s public records, .

Richard Keyt2023-02-18T10:20:45-07:00January 3rd, 2020|FAQs, How Do I|0 Comments

How Do I Protect My Company’s Name in All 50 States?

Question: I want to form a new limited liability company and protect its name in all fifty states. How do I do that?

Answer: Each of the fifty states regulates and authorizes the names of companies formed in the state. Company names are protected only in the state in which the company is formed. There is no way to protect a company name in all fifty states other than forming a company with the same name in every state in every state, but that would not be practical or prudent. Bottom line: There is no practical way to protect a company name in all fifty states unless you can register the name as a trademark or service mark with the U.S. Patent & Trademark office.

Federally Registered Trademarks & Service Marks

The U.S. allows people and companies to register a trademark or service mark with the U.S. Patent & Trademark office. A federally registered trademark or service mark is protected in all fifty states. A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.

Examples of trademarks and service marks include: brand names, slogans, and logos. The term “trademark” is often used in a general sense to refer to both trademarks and service marks. Use of a business name does not necessarily qualify as trademark use, though other use of a business name as the source of goods or services may qualify it as both a business name and a trademark or service mark.

Trademarks are territorial and must be filed in each country where protection is sought. A U.S. trademark does not afford protection in another country. For more information on how to apply for trademarks in a foreign country, contact the intellectual property office in that country directly.

Richard Keyt2018-09-01T17:12:36-07:00September 1st, 2018|FAQs, How Do I|0 Comments

How to Add or Remove a Member of an Arizona LLC

This video demonstrates how to amend the Articles of Organization of an Arizona LLC to add or remove a member. Caution: Before removing or adding a member of an AZ LLC read my article called “Member Fraudulently Amends Articles of Organization to Remove Other Member.”

Links mentioned in the video are:

Arizona Corporation Commission’s Articles of Amendment form
ACC cover sheet that must be submitted with the member change of address form
Our video called How to do an Arizona Business Name Search for an Existing LLC

For more videos on forming and operating Arizona limited liability companies and how to use the Arizona Corporation Commission’s forms and online services see the KEYTLaw Youtube channel. Please click on the subscribe icon and the bell symbol to the right of the subscribe icon to get a notice when we upload a new video.

Richard Keyt2019-07-25T11:14:36-07:00March 3rd, 2018|ACC How to Videos, How Do I, Our Videos|0 Comments

How to Make an ACC Cover Sheet

This video demonstrates how to make an Arizona Corporation Commission cover sheet. Every document filed with the Arizona Corporation Commission (ACC) must include an ACC cover sheet. It’s one of the Arizona llc requirements. Without a cover sheet the Arizona Corporation Commission will reject the document. The Arizona Corporation Commission cover sheet (sometimes called an azcc cover sheet) is a simple one page document. Here’s the link to the ACC cover sheet.

For more videos on forming and operating Arizona limited liability companies and how to use the Arizona Corporation Commission’s forms and online services see the KEYTLaw Youtube channel. Please click on the subscribe icon and the bell symbol to the right of the subscribe icon to get a notice when we upload a new video.

Richard Keyt2020-05-30T06:30:44-07:00February 10th, 2018|ACC How to Videos, How Do I, Our Videos|0 Comments

How to Do an Arizona Business Name Search to Find a Name for a New LLC

If you want to form a new Arizona limited liability company the first thing you need to do is determine if your desired name is available. The good news is that the Arizona Corporation Commission has an online name check database that will tell you if a desired name is available or taken.

In this video we will demonstrate and show you how to how to do an Arizona business name search to find a name for a new LLC. If the name is available we will also show you how to reserve the name for 120 days.

Here is the link to the Arizona Corporation Commission’s entity name database:

http://ecorp.azcc.gov/

Warning: People sometimes mistakenly search for arizona secretary of state business entity search when they want to know if a name is available for an Arizona LLC or corporation. Do not search the Arizona Secretary of State’s website for LLC or corporation names because it is the Arizona Corporation Commission that determines is a name is available for an Arizona LLC or corporation.

For more videos on forming and operating Arizona limited liability companies and how to use the Arizona Corporation Commission’s forms and online services see the KEYTLaw Youtube channel. Please click on the subscribe icon and the bell symbol to the right of the subscribe icon to get a notice when we upload a new video.

Richard Keyt2023-10-24T10:18:29-07:00February 9th, 2018|ACC How to Videos, Forming LLCs, How Do I, Our Videos|0 Comments

How to Change the Statutory Agent of an Arizona LLC or Corporation

This video demonstrates how to prepare and file the Arizona Corporation Commission’s LLC Statement of Change of Know Place of Business Address or Statutory Agent form to notify the ACC that an Arizona LLC changed its statutory agent.

Links mentioned in the video are:

Arizona Corporation Commission’s form LLC Statement of Change of Know Place of Business Address or Statutory Agent form
ACC cover sheet that must be submitted with the member change of address form
Our video called How to do an Arizona Business Name Search for an Existing LLC

For more videos on forming and operating Arizona limited liability companies and how to use the Arizona Corporation Commission’s forms and online services see the KEYTLaw Youtube channel. Please click on the subscribe icon and the bell symbol to the right of the subscribe icon to get a notice when we upload a new video.

Richard Keyt2023-10-24T10:26:18-07:00March 3rd, 2017|ACC How to Videos, How Do I, Our Videos|0 Comments

How Does My LLC become an S Corporation?

Question: My accountant says that I need to turn my LLC into an S corporation. How do I do that?

Answer: First you need to understand that the term “S corporation” refers to a method of income tax under the Internal Revenue Code of 1986. S corporation is one of four federal income tax methods that can apply to a limited liability company.

You do not have to convert your LLC into a corporation. Instead, the LLC simply makes an election with the IRS to have the LLC taxed as an S corporation by having all members of the LLC sign an IRS Form 2553 and then file the signed Form 2553 with the IRS. See the Instructions to IRS Form 2553. If you want your LLC to be taxed as an S corporation for the tax year beginning January 1, 2022, the members must sign and file IRS Form 2553 with the IRS not later than March 15, 2022.

Caution: There are certain requirements that must be satisfied for an LLC to eligible to elect to be taxed as an S corporation. An LLC may to elect to be an S corporation only if it meets all the following tests.

It is (a) a domestic corporation, or (b) a domestic entity such as an LLC eligible to elect to be treated as a corporation, that timely files Form 2553. If Form 2553 is not timely filed, see Relief for Late Elections, later.

It has no more than 100 shareholders. You can treat an individual and his or her spouse (and their estates) as one shareholder for this test. You can also treat all members of a family (as defined in section 1361(c)(1)(B)) and their estates as one shareholder for this test.

Its only shareholders are individuals, estates, exempt organizations described in section 401(a) or 501(c)(3), or certain trusts described in section 1361(c)(2)(A).

It has no nonresident alien shareholders or members.

It has only one class of stock (disregarding differences in voting rights). Generally, a corporation or LLC is treated as having only one class of stock if all outstanding shares of the corporation’s stock or LLC’s membership interests confer identical rights to distribution and liquidation proceeds.

There are other requirements, but the major requirements are listed above. For more about S corporations and LLCs read my blog post called “S Corporation Ignorance.”

P.S. Besides the S corporation federal income tax method, an LLC can also be called taxed as a sole proprietorship (if it has one member or two members who are married and own their membership interests as community property) partnership (if it has two or more members), a C corporation.

Richard Keyt2022-01-31T07:50:17-07:00January 10th, 2017|FAQs, How Do I, Operating LLCs, Tax Issues|0 Comments

How Do I Transfer Real Estate to My LLC?

Question: I own Arizona real estate that I rent to tenants. I don’t want to be sued personally if somebody gets hurt on the property so I formed an Arizona limited liability company to own my investment real estate. If a tenant or guest is injured on the property and he or she wants to sue the owner the defendant will be the LLC not me because the LLC will own the land. What do I have to do to transfer the land to the Arizona LLC?

Answer: Forming an LLC to own the real estate and to shield you from liability if something goes wrong with the real estate is definitely a good idea. The plan, however, will not work unless you actually transfer ownership of the land from the current owner(s) to the LLC. To transfer the land to the LLC the owner(s) must sign a deed and the deed must be recorded with the county recorder of the county in which the real estate is located.

Warnings:

1. Title Insurance Issue #1. Example: After the LLC acquired title it discovers that the property is encumbered by a $25,000 lien. The title insurance policy acquired by the prior owner(s) did not list the lien as an exception from title insurance coverage.

Quit Claim Deed Bad Example. Because the LLC acquired title by a Quit Claim Deed the title insurance policy will not pay the $25,000 lien. A Quit Claim Deed does not contain any title warranties. This means that if a title defect is discovered while the LLC owns the land the LLC does not have a claim against the prior owner for breach of a title warranty. Because the LLC does not have a claim against the prior owner for breach of a title warranty the prior owner’s title insurance policy does not cover the $25,000 lien. The LLC must pay the lien or risk losing the property in a foreclosure.

Warranty Deed or Special Warranty Deed Good Example. A Warranty Deed and a Special Warranty Deed both contain title warranties that if breached give the new owner a claim against the prior owner(s). If a properly drafted Warranty Deed or Special Warranty Deed had been used to transfer title to the LLC the deed would contain a warranty that the land was not subject to the $25,000 lien. The breach of this title warranty gives the LLC a claim against the prior owner(s). Because the LLC has a claim against the prior owner(s) for breach of the title warranty the prior owner(s) could then make a claim under the prior owner(s) title insurance policy and the title insurance company would pay off the $25,000 lien.

2. Title Insurance Issue #2. The LLC should contact the title insurance company that issued the prior owner(s) title insurance and purchase an endorsement to the title insurance policy that names the LLC as an additional insured under the original title insurance policy issued to the prior owner(s) as of the date the prior owner(s) acquired the title insurance. With the endorsement the LLC can make a claim on the title insurance policy directly to the title insurer rather than against the prior owner(s) for breach of a title warranty. This type of endorsement typically costs $75 – $125.

3. Insurance Issue. When the LLC acquires title to the land be sure to contact your insurance company and notify it that the LLC owns the property and arrange for the LLC to be the named insured under the policy or added to the policy as an additional insured. If the property burns to the ground you don’t want the insurance company to deny coverage because it insured the prior owner(s) not the LLC. Make sure the LLC acquires all types of insurance that is appropriate for the property and its use.

4. Due on Sale Clause Issue. If the property is encumbered by a lien, the lender may have an option to call the loan if the borrower(s) transfers title to the LLC. This type of option is called a “due on sale clause.” If you ask the lender for permission to transfer the land to your LLC the lender will always say no. I’ve formed thousands of LLCs that acquired real estate subject to due on sale clauses. I’ve never had a client tell me that their lender called their loan when they transferred their land to their LLC. If you transfer your land to an LLC and your lender calls your loan, please let me know. The good news with respect to Arizona real estate encumbered by a Deed of Trust is that Arizona Revised Statutes Section 33-813.A allows the prior owner(s) to cure the default and stop a trustee’s sale under a Deed of Trust by deeding the property from the LLC back to the prior owner(s) who must also pay the lender its foreclosure costs.

Purchase a Do-It-Yourself Special Warranty Deed

If you need to transfer Arizona real estate to a limited liability company, purchase one of my editable do-it-yourself Word documents for $47. Each deed comes with instructions on how to complete the deed and record it with the appropriate Arizona county recorder. Purchase a deed in my legal forms web form store.

Richard Keyt2023-10-24T10:26:50-07:00January 8th, 2017|Asset Protection, FAQs, How Do I, Real Estate Issues|0 Comments

How to Add or Remove a Manager of an Arizona LLC

This video demonstrates how to amend the Articles of Organization of an Arizona LLC to add or remove a manager.

Links mentioned in the video are:

Arizona Corporation Commission’s Articles of Amendment form
ACC cover sheet that must be submitted with the member change of address form
Our video called How to do an Arizona Business Name Search for an Existing LLC

For more videos on forming and operating Arizona limited liability companies and how to use the Arizona Corporation Commission’s forms and online services see the KEYTLaw Youtube channel. Please click on the subscribe icon and the bell symbol to the right of the subscribe icon to get a notice when we upload a new video.

Richard Keyt2023-10-24T10:27:11-07:00January 3rd, 2017|ACC How to Videos, How Do I, Our Videos|0 Comments

Tax Free Merger of a Corporation into an LLC

Question: How do I convert my corporation into a limited liability company?

Answer: Two ways – the easy way and the hard, but not too hard way.

Easy Way: If your corporation does not have assets that have substantial value or contracts that cannot be assigned or transferred to the LLC without the consent of the other party to the contract then simply form a new LLC, dissolve the corporation and start doing business under the new LLC. If your corporation is an Arizona corporation and you dissolve it before or concurrently with forming your Arizona LLC the new LLC’s name can be identical to the corporation’s name.

Harder Way: Form an Arizona LLC and merge the corporation into the LLC. The advantage of this method is that a merger causes the assets and liabilities of the corporation to become assets and liabilities of the LLC automatically as of the effective date of the merger. If the dissolution of the corporation would cause its shareholders to pay unwanted income taxes the merger method may avoid the tax.

Example 1: World Wide Widgets, Inc. owns property that has a value of $101,000. The sole shareholder’s basis in his stock of the corporation is $1,000. If the corporation assigned the property to its shareholder before dissolving the shareholder would have taxable gain of $100,000 ($101,000 value of property – $1,000 adjusted basis of the stock).

If the stock is a capital asset (held for more than one year) the shareholder in this case could be paying as much as 23.8% of the gain as federal income tax plus state income tax if the shareholder resides in a state that has a state income tax. Arizona’s tax rate for capital gains in 2016 is 4.5%. Therefore, if the shareholder is an Arizona resident and the stock is a capital asset the total federal and Arizona income tax on the $100,00 gain is $24,500 if the shareholder is not subject to the 3.8% federal surtax on net investment income or $28,300 if the shareholder is subject to the surtax. Yikes! Who wants to pay federal and state income tax if it can be avoided.

The good news is that if the corporation is taxed as an S corporation or a C corporation and the LLC is taxed as an S corporation or a C corporation the merger can be a tax free reorganization under Section 368(a)(1)(F) of the Internal Revenue Code. By carrying out the “F” merger the shareholder can eliminate the income tax.

Example 2: Same facts as example 1 except the corporation taxed as a C or an S corporation merges into an LLC taxed as a C or an S corporation. Result: $0 income tax instead of $24,500 or $28,300.

Conclusion: Ask your CPA to tell you in writing what would be the income tax consequences to you if you were to dissolve your corporation. If dissolution will cause you to pay federal and/or state income tax you do not want to pay then do an F reorganization, i.e. merge your corporation into an LLC that is taxed as a C or S corporation.

P.S. If your surviving LLC will be an Arizona LLC hire me, Richard Keyt to prepare the merger documents and to consummate the tax-free merger. Call me at 480-664-7478 if you have questions or to get started.

Richard Keyt2016-11-24T11:13:40-07:00November 25th, 2016|FAQs, How Do I, LLCs & Corporations, Tax Issues|0 Comments

How a Married Couple Owns an Arizona LLC as Community Property

Married Arizona residents can own property as separate property, community property and community property with right of survivorship. Arizona law provides that if a married Arizona resident acquires property, the property is automatically community property (not community property with right of survivorship) unless the property was a gift or inherited property. When property is owned as community property or community property with right of survivorship then each spouse owns an undivided one half of the property and if they divorce, each spouse is entitled to one half the value of the combined value of the couple’s community property asset.

Separate property is property acquired from a gift or inherited property or property acquired before marriage. The non-owner spouse has no interest in or claim to his or her spouse’s separate property.

The only difference between community property and community property with right of survivorship is what happens to the interest of the first spouse to die. When an Arizona married couple owns property as community property and one of them dies, the interest of the deceased spouse does not transfer automatically to the other spouse. The interest of the deceased spouse is inherited as provided in the deceased spouse’s will or trust, but if there is no will or trust then the interest of the deceased spouse passes according to the law of intestate succession. A probate may be required to complete the transfer to the property heir(s) unless the value of the interest is less than $75,000.

When an Arizona couple owns property as community property with right of survivorship then if one spouse dies, the interest of the deceased spouse transfers automatically to the surviving spouse without the need for a probate. If a married Arizona couple wants the community property interest of a deceased spouse to pass automatically to the surviving spouse on the death of the first spouse they must own the property as community property with right of survivoship.

How to Own an Interest in an Arizona LLC as Community Property with Right of Survivorship

If a married couple who are Arizona residents form an Arizona LLC they automatically own their interest in the LLC as community property, not community property with right of survivorship. If they want to own their interest in the LLC as community property with right of survivorship they must sign an Operating Agreement that expressly declares that the married couple holds their interest in the limited liability company as community property with right of survivorship. Arizona Revised Statutes Section 29-732.01.C.

When people hire me to form their Arizona LLC and tell me they want to own their interest in the LLC as community property with right of survivorship then we insert language in the LLC’s Operating Agreement hat expressly declares that the married couple holds their interest in the limited liability company as community property with right of survivorship.

Richard Keyt2017-05-29T10:38:51-07:00November 24th, 2016|How Do I, Operating Agreements|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

How to Get a Certificate of Good Standing for an AZ LLC

Question: How can I get a Certificate of Good standing for my Arizona LLC from the Arizona Corporation Commission?

Answer: It is very easy. First go to the link below and search for the LLC.

http://ecorp.azcc.gov/Search

Do the following:

Enter the name of the limited liability company in the name field.
Click on “Search.”
Click on the link that says “Check Corporate Status.”
Click on the link that says “Print Certificate.”
Click on the link that says “Payment Screen.”
Follow the instructions to pay $45 with your major credit card to buy the Certificate of Good Standing.
As soon as you pay print the Certificate of Good Standing.

Richard Keyt2018-09-27T13:03:13-07:00June 4th, 2016|FAQs, How Do I|0 Comments

How a Non-U.S. Citizen or Non-U.S. Resident Can Get an Employer ID Number (EIN)

Question: I am not a citizen or resident of the United States who wants to form a U.S. limited liability company. Can I get a federal employer identification number (EIN) for my LLC and if so, how?

Answer: The instructions to IRS Form SS-4, explain how a non-U.S. citizen who is a non-resident of the U.S. can get an EIN for his or her LLC. The instructions say the following:

If you have NO legal residence, principal place of business, or principal office or agency in the U.S. or U.S. possessions, you can’t use the online application to obtain an EIN. Please use one of the other methods to apply.

Apply by telephone—option available to international applicants only. If you have NO legal residence, principal place of business, or principal office or agency in the U.S. or U.S. possessions, you may call 267-941-1099 (not a toll-free number), 6:00 a.m. to 11:00 p.m. (Eastern time), Monday through Friday, to obtain an EIN.

The person making the call must be authorized to receive the EIN and answer questions concerning Form SS-4. Complete the Third Party Designee section only if you want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of Form SS-4. The designee’s authority terminates at the time the EIN is assigned and released to the designee. You must complete the signature area for the authorization to be valid.

Note. It will be helpful to complete Form SS-4 before contacting the IRS. An IRS representative will use the information from Form SS-4 to establish your account and assign you an EIN. Write the number you’re given on the upper right corner of the form and sign and date it. Keep this copy for your records. If requested by an IRS representative, mail or fax the signed Form SS-4 (including any third-party designee authorization) within 24 hours to the IRS address provided by the IRS representative.

Apply by fax. Apply by fax. Under the Fax-TIN program, you can receive your EIN by fax generally within 4 business days. Complete and fax Form SS-4 to the IRS using the appropriate fax number listed in Where To File or Fax, later. A long-distance charge to callers outside of the local calling area will apply. Fax-TIN numbers can only be used to apply for an EIN. The numbers may change without notice. Fax-TIN is available 24 hours a day, 7 days a week. Be sure to provide your fax number so the IRS can fax the EIN back to you.

Apply by mail. Complete Form SS-4 at least 4 to 5 weeks before you will need an EIN. Sign and date the application and mail it to the appropriate address listed in Where To File or Fax, later. You will receive your EIN in the mail in approximately 4 weeks. Also, see Third-Party Designee, later. Call 800-829-4933 to verify a number or to ask about the status of an application by mail.

Where To File or Fax

If you have no legal residence, principal office, or principal agency in any state or the District of Columbia (international/U.S. possessions) fax to:

Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: 855-215-1627 (within the U.S.)
Fax: 304-707-9471 (outside the U.S.)

Richard Keyt2021-10-02T09:34:40-07:00May 7th, 2016|FAQs, How Do I, Tax Issues|0 Comments

Can I be the President of My LLC?

Question: I am the sole member of my Arizona limited liability company. Can I tell the public that I am the President of my LLC?

Answer: Yes, but I don’t recommend you use that term because some people may mistakenly think they are dealing with a corporation rather than an LLC. Arizona LLC law refers only members and managers of an Arizona limited liability company. The term “member” means a person or entity that holds an ownership interest in the LLC. The term “manager” means a person or entity of a manager managed AZ LLC that is a manager of the LLC. FYI: If your Arizona LLC is member managed, then it does not have any managers.

Although the terms President, Vice President, Secretary and Treasurer are most commonly used when referring to officers of a corporation, an Arizona LLC could elect to use any or all of those terms when referring to people who are associated with the LLC. If you own the LLC you can call people associated with the LLC anything you desire, but if the term is not member or manager it has no legal significance unless the term is defined.

If you insist on using a corporate term to describe somebody associated with your LLC I recommend that the LLC’s Operating Agreement specify the terms to be used and that it describe the duties and powers applicable to each position. For example, if your Arizona LLC is manager managed and you want to call the manager the “President” of the LLC, add the following text to the LLC’s Operating Agreement:

The manager of this Company may be referred to as the Company’s President both internally and in matters dealing with the public. The duties and powers of the President are identical to the duties and powers of the manager of this Company.

Richard Keyt2016-11-16T08:23:41-07:00January 31st, 2016|FAQs, How Do I|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

Warning: Improper Contract Signature May Create Personal Liability

Question: My LLC is to be the tenant on a real property lease. The landlord’s lease has a signature block that indicates I will sign the lease as the manager and as a member of the LLC. The signature block looks like this:

World Wide Widgets, LLC, an Arizona limited liability company

By:_______________________________
Homer Simpson, Manager and Member

If I sign the contract will I be personally liable under the lease in addition to the LLC?

Answer: Probably. If you sign the contract with the signature block as indicated above the landlord will claim you signed the contract in your capacity as the manager of the LLC AND in your individual capacity as a member. A court might agree because that is the strict reading of the text under your signature. Arizona LLC law says that a member does have have the legal power to sign a contract and bind the Arizona LLC on legal obligations. Therefore the text “and Member” can only mean the signer is signing in his or her individual capacity.

Bottom Line: If you do not want to be liable for obligations under a contract, make sure the signature line/block shows that you are signing only on behalf of the LLC. The signature block should be one of the following:

If the LLC is member managed:

World Wide Widgets, LLC, an Arizona limited liability company

By:_______________________________
Homer Simpson, Member

If the LLC is manager managed:

World Wide Widgets, LLC, an Arizona limited liability company

By:_______________________________
Homer Simpson, Manager

Richard Keyt2016-11-16T08:23:42-07:00April 21st, 2014|FAQs, How Do I, Operating LLCs|0 Comments