So, you’re thinking about starting a business in Arizona? Whether you’re a native Arizonaan or a transplant from another state, there are some things you should know before taking the plunge. Here’s a quick guide on how to start a business in Arizona.
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Decide on the structure of your business
The first step in starting any business is to decide on the structure of the business. Will you operate as a sole proprietorship, limited liability company (LLC), partnership, or corporation? Each business structure has its own advantages and disadvantages, so you will need to choose the one that is best for your specific business.
Sole Proprietorship: A sole proprietorship is the simplest and most common type of business structure. This type of business is owned and operated by one person, and there is no legal distinction between the owner and the business. Sole proprietorships are easy to form and require little paperwork or ongoing compliance. However, sole proprietorships offer the owner no personal liability protection from debts or lawsuits against the business.
Limited Liability Company (LLC): An LLC is a hybrid legal entity that offers both limited liability protection and pass-through taxation. LLCs can be formed by one or more individuals, partnerships, corporations, or other LLCs. Paperwork requirements for forming an LLC are usually minimal, and ongoing compliance requirements are also relatively simple. LLCs offer their owners significant flexibility in how the business is structured and operated.
Partnership: Partnerships are businesses owned by two or more people who have joined together for the purpose of operating a business. Partnerships can be either general partnerships or limited partnerships. In a general partnership, all partners are equally liable for debts and obligations of the partnership. In a limited partnership, there are both general partners (who have unlimited liability) and limited partners (who have only limited liability). Partnership agreements often spell out each partner’s rights and responsibilities within the business.
Corporation: A corporation is a legal entity that is separate from its owners. Corporations can be either “C” corporations or “S” corporations. C corporations are subject to double taxation—the corporation itself pays taxes on its profits, and then shareholders also pay taxes on any dividends they receive from the corporation. S corporations avoid this double taxation by pass-ing their profits through to their shareholders, who then pay taxes on those profits on their personal tax returns. Corporations must follow complex rules and regulations related to corporate governance, reporting requirements, shareholder rights, etc.
Register your business
The first step in starting your business is to register your business with the state of Arizona. You can do this online or in person at the Arizona Commerce Authority. The process is simple and only takes a few minutes. You will need to provide your business name, address, and contact information. You will also need to choose a business structure. The most common structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Once you have registered your business, you will need to get an employer identification number (EIN) from the Internal Revenue Service (IRS). You will use this number to open a bank account and file taxes.
The next step is to obtain any licenses or permits that are required for your type of business. For example, if you are opening a restaurant, you will need a food permit from the Arizona Department of Health Services. If you are going to sell products that you have manufactured, you will need to get a sales tax permit from the Arizona Department of Revenue.
After you have obtained all the necessary licenses and permits, you are ready to start operating your business!
Get an Employer Identification Number
You may need an Employer Identification Number (EIN) to open a business bank account and file your business taxes. You can apply for an EIN for free through the IRS website.
In addition to getting an EIN, you may also need to file for a sales tax license if you plan on selling products or services in Arizona. You can apply for a sales tax license through the Arizona Department of Revenue website.
Open a business bank account
You will need to obtain a business license from the state of Arizona and open a business bank account. To do this, you will need to provide the bank with your business license and your tax identification number. You will also need to choose a business structure, such as a sole proprietorship, partnership, or corporation.
Create a business plan
A business plan is vital to the success of any business. It provides a roadmap for your business, and is a tool for attracting investment and securing funding.
Creating a business plan can seem like a daunting task, but it doesn’t have to be. You can start by using a template or guide, such as the ones below.
Once you have created your plan, you will need to register your business with the Arizona Corporation Commission. This can be done online, by mail, or in person.
After your business is registered, you will need to obtain any licenses or permits that may be required for your business. The type of license or permit you need will depend on the nature of your business.
You may also need to file for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is used to identify your business for tax purposes.
Finally, you will need to open a bank account for your business. This will allow you to keep your personal and business finances separate.
Get business insurance
As a new business owner in Arizona, you’ll need to make sure your business is properly insured. This will protect you and your employees in the event of an accident or injury, and it will also protect your business financially if you are sued.
There are many different types of business insurance, so it’s important to do some research and figure out which type is right for your business. You may need to purchase more than one type of insurance, and you may need to adjust your coverage as your business grows.
Some common types of business insurance include:
-Property insurance: This type of insurance protects your business property from damage or theft.
-Liability insurance: This type of insurance protects your business from being sued for negligence or other damages.
-Workers’ compensation insurance: This type of insurance provides benefits to employees who are injured on the job.
-Business interruption insurance: This type of insurance covers lost income if your business is forced to close due to a covered event, such as a natural disaster.
Understand your tax obligations
The first step in starting any business is to understand your tax obligations. The types of taxes you will need to pay include federal, state, and local taxes.
You will need to pay federal taxes if your business is a partnership, corporation, or sole proprietor. The amount of tax you will need to pay will depend on the type of business you have.
If your business is a partnership, you will need to file an annual return with the IRS. The return must be filed by the 15th day of the 4th month after the end of your fiscal year.
If your business is a corporation, you will need to file an annual return with the IRS. The return must be filed by the 15th day of the 3rd month after the end of your fiscal year.
If your business is a sole proprietor, you will need to file an annual return with the IRS. The return must be filed by the 15th day of the 4th month after the end of your fiscal year.
In addition to federal taxes, you will also need to pay state and local taxes. The amount of tax you will need to pay will depend on the state and locality in which your business is located.
Promote your business
One of the most important things you can do to promote your business is to create a marketing plan. This document will lay out your entire marketing strategy for the coming year, including your budget, objectives, and tactics.
Be sure to research your target audience and what kind of messaging will resonate with them. You should also consider what channels you will use to reach them (e.g., social media, email marketing, paid advertising, etc.). Once you have a solid understanding of your audience and how to reach them, you can start creating your marketing materials.
Some essential components of a marketing plan include:
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