Starting a company

How To Start A Business In Arizona

Key Takeaways

  • Research the type of business you want to start and the laws and regulations that apply to it in Arizona. 
  • Decide which business structure best suits your needs and register your business with the Arizona Corporation Commission. 
  • Obtain the required licences and permits to operate your business in Arizona. 
  • Establish a business bank account and open a business insurance policy. 
  • Determine where your business will be located and complete any necessary zoning requirements.

Planning to start a business in Arizona? Before you start, you will need a checklist and will have to get a few things off the list. Starting a business is not easy, but you can do wonders with the right tips and support. We are setting up this comprehensive guide on starting a business in Arizona to help make things clear. 

Did you know? Arizona is a harbour for small businesses, as there are already over 611,000 businesses being operated in the state. Moreover, every day plenty of new applications are received by the state for new businesses. Below are a few steps you need to consider; however, following them in the same order is not mandatory. Instead, we try to make our readers understand what it takes for people to start a business in Arizona. 

Let us start with the steps to help you establish a profitable business in Arizona without much hassle. 

Before You Get Started 

Before starting to set up your business, you need to consider your idea and ensure it is viable. To do this best, you can write your business plan outlining its fundamentals. The information can include what the business is about, to whom it will serve, who and how to market it to, organising the finances, and so much more. 

The business plan is more like a blueprint for the business and will guide you ahead in the journey. Also, you should review and update it many times during the year after the commencement of your business. This way, you will enjoy the peace of mind that you are on the right track, and also, you will have something to show to your investors. 

The Business Entity Type 

Choosing the type of business entity you want to operate in Arizona is the foremost step. You can start several different types of business entities, so make an informed choice. The other business entity types are; 

  • Partnership
  • Sole Proprietorship
  • Limited Liability Partnership (LLP)
  • Limited Liability Limited Partnership (LLLP)
  • Limited Liability Company (LLC) 
  • Limited Partnership (LP)
  • Corporation

Starting a sole proprietorship or partnership business is the easiest to establish and get going. Still, the law doesn't offer much liability protection or has any separate taxes from personal taxes. 

On the contrary, the liability for an LLC is limited while the profits or losses are still passed to the owner to address an individual's tax return. Liability is also limited for a corporation, and a separate account can be established where the expenses and profits will be accounted for. 

Company Registration

When you step ahead with getting your company registered, you should check that the name you have thought of for your business still needs to be taken. That said, the name should not be in use by any other company. You can check this by searching the database of the Corporation Commission. Then, after deciding the type of entity you want to establish, register it with the Arizona Secretary of State. 

The sole proprietorship businesses using a name that is different from their legal name will have to file a trading name with the Arizona Secretary of State at $10. Other business types have to file the qualification to be a limited liability partnership, certificate of a limited partnership, articles of incorporation, or articles of organisation. 

Starting A Business In Arizona

Now that you have checked all the items from your pre-start business checklist, it's time to break the post-process into simple steps. 

#1 Defining The Business Concept

The start of every business is the same, and it requires a good idea. Irrespective of the type of business you plan to start in Arizona, you need to determine the value of your idea and the unique products or services you plan to offer. Make sure you adopt an idea that aligns with your interests, passions, and skill sets. Starting a business and maintaining it takes a lot, and staying motivated throughout is highly critical. To ensure success in the long run, you need to stay excited.  

#2 Draft A Business Plan

A detailed business plan will serve as the guide to moving ahead with your business operations. This will help you understand your long-term goals better. Furthermore, it serves as a proof of concept to help you know the future success of your business. That said, the business plan you draft will be your roadmap to achieve your business objectives. 

Many use it as a blueprint and include the finest business details in it well ahead of time. Furthermore, this enables business owners to stay prepared for the challenges that lie ahead in their way. Below are a few questions you should ask yourself when drafting the business plan. 

  • The cost of getting your business off the ground and getting it running. Also, the source from where the funding will come. 
  • What services/products will you be offering to your consumers? 
  • Who are your main competitors operating in the market? 
  • Who is your target audience, and a rough estimate of the size of the target audience that you intend on conducting business with? 

#3 Exploring Business Funding Options

No denying starting a business requires a considerable investment. It means you will have to look for some business fund options. Determining the source of your business fund will also impact its legal structure. Hence, planning your startup cost funding in the right way is essential. 

You can turn to a few available options when you need additional funding. Find them listed below: 

  • Loans Available For Small Business: Several financial institutions and banks offer small business loans to help startups continue their operations during the initial days. Remember that you will have to pay this money back with interest to the lender; therefore, calculate the total costs in your financial plan. 
  • Outside Investment: Entrepreneurs and venture capitalists can serve as a source of funding. They generally do this to take a percentage of ownership in your business in exchange. We recommend starting a corporation if you desire to raise funds via this option. 
  • Bootstrapping: One of the safest sides of finding your business is using nothing more than your savings or reinvesting the profit earned in the initial days back into your business. One of the advantages of taking this route is that you get to enjoy full ownership of your business. 
  • Friends And Family: Taking a loan from your friends and family is a great way of funding your business and reducing the amount of interest otherwise paid. These loans can also be taken in addition to bank loans for extra funding or to expand your business. However, ensure you get the terms of repayment of the loan amount written in a contract. Also, accept only a reasonable amount you can pay within a specific period. 

#4 Registering The Business With Arizona Secretary Of State

After deciding on the best business structure for your venture, it is time to register it in Arizona. First, you must register it with the Arizona Secretary Of State. The paperwork can be either submitted directly, or you can also do it online. Professional help is recommended to register your business smoothly. 

When registering a business in Arizona, the steps will differ from one business type to another. However, the information you will have to provide to register your business will be the same. It will include the basic details about your business, the details of the registered agent hired, the name of your business, etc. 

  • Basic Business Details: The basic details include the name of the business, its purpose, details of the owner, certificates obtained, etc. 
  • Name Of The Business: The shortlisted name you wish to register your business with, and also add a few alternatives in case another entity already takes the previous one. 
  • Registered Agent Information: The name and the address of the registered agent who will serve as the point of contact for all business matters to the Arizona Secretary of State. The address must be local in Arizona. 

#5 Obtaining Business Licences And Permits

When operating a business in Arizona, all companies must obtain a general business licence, also known as the business tax certificate. Municipalities and cities issue such licences, and the requirements of each city are different. That is why you collect the required information based on the city you are operating in. If you plan to operate in multiple cities, you should apply for a business licence in each location.

In addition to the general licence, other permits are required, which should be filed within the state or a country. Gather information about the licences applicable to your business by checking the offices in the cities you will run your business. 

#6 Opening A Business Bank Account

After registering your business, you gain some liability protections; to maintain that, you need to separate your finances from your business. For this reason, opening a bank account for your business is mandatory. However, if you mix the finances in Arizona, the separation between the owner and the business gets blurred. 

Furthermore, this puts your assets at risk if your business is sued. Therefore, separating your finances is recommended. With a business bank account, there will be a clear separation between your finances and your business. Obtaining an EIN is mandatory to open a bank account for your business. 

EIN is the employee identification number, also known as tax ID, a nine-digit number issued by the IRS. This number is issued by the IRS and makes a business unique for tax purposes. 

#7 Business Insurance Options

Business insurance could be a more impressive option for business owners, but they should obtain it for its benefits. Insurance is vital in helping protect your business from some unavoidable circumstances. However, most of the business insurance types are optional. Only workers' compensation insurance is mandatory in some states for employers. 

A few other states also require businesses to attain professional liability insurance for offering certain services and commercial auto insurance. Without insurance, if the business ever faces damages due to theft, fire, or personal injury, the business owner will have to pay for the legal fees and damages out of their pockets. 

For this reason, even home-based businesses and side businesses are nowadays considering business insurance. But unfortunately, vehicle and personal policies do not cover anything in the event of business loss of any kind. 


With expert guidance, starting a business is an easier and more complex task. You will need dedication, motivation, patience, careful planning, and time to turn your dreams into the reality of becoming a business owner. We have tried setting up a short and simple guide for you to start your venture easily. But first, build a strong foundation for your business and see it take flight in the right direction. 


Is Arizona a good place to start a business? 

Forbes rated Arizona as one of the five states with the best economic growth prospects. The choice of this state is indeed a great one for entrepreneurs to give a kick start to their business. 

What is the cost of starting a business in Arizona? 

The cost of starting a business depends on the type of business that you plan to start. The cost incurred will range somewhere between $10 to $60 to file for the incorporation of an Arizona business entity. Some other expenses will include permits and licences, general overheads, and lease costs. 

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