Summary: If you decided to open a new business that will be based in Arizona you can choose from several options: Sole Proprietorship: Sole owners of Arizona-based businesses could opt for sole proprietorship as the easiest form of business organization. Not the most recommended, given the liability a sole proprietor assumes as a result of owning a business. No registration with Arizona Corporation Commission is necessary, but it is recommended to register a trade name (DBA), and if you plan to hire employees then also obtain an EIN. Single Member LLC: Limited liability company, as the name suggests, is an entity that allows its owners to limit the liability of the business to the entity itself, shielding the owners' personal assets. This type of entity is recommended for most small businesses. By default your LLC will be taxed as "disregarded entity", meaning you will file your LLC tax return as part of your personal tax return. Keep in mind though - LLC is a flexible entity, which means you have the option of electing it to be taxed as S-Corp (assuming you are a U.S. person) or C-Corp. Learn more about LLC here, and about the details of forming LLC in Arizona here. Corporation: You can also form a corporation and be a sole shareholder with 100% of all shares. Corporations have more formalities than LLCs (for example in Arizona you are required to have bylaws and maintain minutes of meetings in corporate records), but provide similar limited liability protection. That's one of the reasons this entity type is often more suitable for bigger companies, or those who seek major investment. Corporations can be taxed as S-Corp or C-Corp, with each form of taxation having its pros and cons. Keep in mind, you can elect your corporation to be S-Corp only if you, as the sole shareholder, are a U.S. person. https://www.myusacorporation.eu/arizona.html MyUSACorporation is your reliable partner since 2009.
