24 Hour LLC Guarantee
Form a Nevada LLC 
Business Formation 
Registered Agent Service 
Tax ID / EIN 
Legal Services 
Start up Coach 
Taxes and Bookkeeping 
Business Credit 
Call Today 
Arizona and Nevada have more than their incredible desert landscapes to offer to entrepreneurs. Both states allow LLC formation, with different benefits and drawbacks affecting new and seasoned business owners. NCH’s business formation experts have compared and discussed these factors below.
Key Takeaways
- To start an LLC in Arizona or Nevada, you must meet several requirements. These initial prerequisites, including a publication requirement in Arizona, can increase your operational costs.
- You can register as a foreign LLC in both states, although Arizona charges a higher registration fee.
- Nevada LLCs and Arizona LLCs can be member-managed or manager-managed. However, Nevada LLCs can have individuals without a stake in the business.
- The Silver State offers more tax and legal advantages than the Grand Canyon State. Nevada LLCs and their owners pay no state income taxes, plus Nevada’s charging order protection helps them shield their assets from potential liabilities.
- For ongoing compliance, Arizona and Nevada require all LLCs to maintain a registered agent who receives official documents on their behalf. Other requirements vary between both states.
The LLC Formation Process
In Arizona and Nevada, filing an LLC’s Articles of Organization comes first. But if you set up a Nevada LLC, you must submit an initial report and secure a state business license. Both will cost you $150 and $200, respectively. Add these costs to the $75 fee for filing your Articles of Organization, and you’ll get a total formation cost of $425.
Arizona charges $50 for filing an LLC’s Articles of Organization. However, new LLCs operating outside the Maricopa and Pima counties are required to publish a notice about their formation in a newspaper approved by the Arizona Corporation Commission (ACC). This additional requirement will cost you more than starting an LLC in Nevada.
For more details about Arizona’s publication requirement, read NCH’s guide to state publication requirements.
Foreign LLC Registration
If you live outside of Arizona or Nevada but want to conduct business in any of these states, you can register as a foreign LLC.
In Arizona, foreign LLCs register with the state by submitting a Foreign Registration Statement to the ACC. The filing fee for this document costs $150. But if you’re registering as a foreign LLC in Nevada, you only need to pay $75.
LLC Membership & Management Structure
Nevada and Arizona LLCs can be member-managed or manager-managed. In a member-managed LLC, the owners (“members”) operate the business themselves. Manager-managed LLCs appoint individuals other than the members to manage their daily operations.
However, there’s a key difference in the membership of Arizona and Nevada LLCs. The Silver State allows LLCs to have noneconomic members. These individuals have no stake in an LLC, but they can manage the business and vote on major decisions.
State Taxes
If you form and operate an LLC in Nevada, you won’t need to pay income and franchise taxes. The lack of both outweighs the state’s higher formation costs and annual fees. Still, your business may be subject to other types of taxes, depending on its specific activity.
In contrast, Arizona imposes income taxes on LLCs and their owners. The state’s individual income tax rate is 2.5%, while the corporate income tax rate is 4.9%. As a result, your tax burden increases.
Asset Protection
For asset protection, Nevada and Arizona allow creditors to obtain a charging order. This way, a creditor gains the financial rights of an indebted LLC member.
Nonetheless, a charging order comes with limitations. It prevents the creditor from forcing the LLC to pay them any distributions made to the debtor and managing the business. Despite these drawbacks, Nevada extends its charging order protection to single-member and multi-member LLCs. Arizona’s laws don’t explicitly state whether charging orders apply to both types of LLCs.
Overall, Nevada’s asset protection laws can help you shield your assets from potential liability, especially if you work in a high-risk industry.
Ongoing Compliance Requirements
Nevada and Arizona require all LLCs to maintain a registered agent (or “statutory agent” in the Grand Canyon State). This individual or company receives official documents on your LLC’s behalf.
Both states have varying requirements for registered agents.
- Nevada: You can appoint a commercial agent, non-commercial agent, or a registered agent with a specific position in your LLC.
- Non-commercial registered agents must have a physical address in the state. This rule also applies to registered agents with a position in an LLC.
- Arizona: A statutory agent can be an individual, a domestic corporation or LLC, or a foreign corporation or LLC.
- Individuals acting as registered agents for LLCs must have a physical address in the state.
- Arizona LLCs can’t conduct business without a registered agent.
For annual compliance, Nevada LLCs must file an Annual List of Managers or Members and renew their state business licenses. Both are done at the same time. The Nevada Secretary of State charges $150 for annual report filings and $200 for state business license renewals.
Conversely, Arizona LLCs don’t need to file an annual report. Still, they must renew any applicable business licenses and permits and fulfill certain tax obligations.
Bonus Resources
- Before choosing your LLC’s formation state and starting your business, check out the following resources:
- Learn why you should form a Nevada LLC from NCH’s Cort Christie.
Frequently Asked Questions
Which state offers more tax advantages: Nevada or Arizona?
Nevada offers more tax advantages, with no state income tax on LLCs and their owners. It doesn’t impose franchise tax on LLCs, either.
In contrast, Arizona levies personal and corporate income taxes. The state has an individual income tax rate of 2.9% and a corporate income tax rate of 4.9%.
Where do I form an LLC if I’m after strong asset protection?
You should form an LLC in Nevada if you’re after strong asset protection. The Silver State’s charging order protection applies to single-member and multi-member LLCs.
Start your Nevada LLC in
24 hours guaranteed
You don’t need to live in Nevada to enjoy the best asset protection
and audit defense a Nevada LLC can provide.
Arizona offers charging order protection as well. However, whether it’s available to single-member and multi-member LLCs remains unclear.
Can non-residents form LLCs in Nevada & Arizona?
Yes, non-residents can form LLCs in Nevada and Arizona.
Both states offer foreign LLC registration to non-residents. You don’t need to visit Nevada and Arizona to submit the required documents, as they have online portals where you can file for foreign qualification.
How much does LLC maintenance cost in both states?
In Nevada, you must file an annual report and renew your state business license. You’ll be charged $150 for the annual report and $200 for the state business license renewal.
Arizona LLCs aren’t required to submit an annual report. However, they incur additional costs from renewing their business permits and paying applicable state taxes.
Where should growing businesses operate: Nevada or Arizona?
The answer depends on factors such as business goals and operational costs.
Arizona has minimal compliance requirements, but it imposes state income taxes on LLCs and their owners. Plus, Arizona LLCs must pay applicable business taxes.
Meanwhile, Nevada’s lack of income tax and business-friendly legal environment outweigh its high formation and maintenance costs.
Do I need a registered agent in Nevada & Arizona?
Yes, you need a registered agent in Nevada and Arizona. Your chosen agent can be an individual or company, as long as they’re available to receive official documents during regular business hours. Also, your registered agent must have a physical address in Nevada or Arizona.
Which state requires LLCs to get a general business license?
Nevada requires LLCs to get a general business license. This must be done when an LLC files its Articles of Organization with the state.
Arizona doesn’t have a statewide business license requirement, but cities or counties may require you to obtain certain types of business permits.
Can forming an LLC in Nevada or Arizona help me protect my privacy?
Yes, forming an LLC in Nevada or Arizona can help you protect your privacy.
- In the Silver State, you don’t need to disclose the names of your LLC’s members or managers on public records.
- If you choose to start an Arizona LLC, you can include its registered agent’s information on its formation documents.
When should I file an annual report in Nevada & Arizona?
Nevada LLCs must file an annual report and renew their state business license every year. Both are typically done on the anniversary month of when the annual report and state business license were filed.
Arizona LLCs aren’t required to file an annual report. However, they must pay any applicable state taxes.
Which state is better for online or out-of-state businesses?
Nevada is better for online or out-of-state businesses because it:
- Imposes no personal and corporate income taxes
- Enforces strong asset protection laws
- Makes operating LLCs flexible
Arizona allows online or out-of-state businesses to operate as foreign LLCs, although they’ll be subject to state-level taxes.
Expert Tips From NCH
- Compare the initial and ongoing costs of LLC formation in Arizona and Nevada before starting the process. Requirements such as publishing an LLC formation notice and paying state-level taxes may cost you more.
- If you’re pursuing profitability, consider the taxation in both states. Nevada’s lack of personal, corporate, and franchise income taxes can increase your LLC’s long-term cash flow.
- Factor in asset protection for high-risk industries. LLCs for licensed professionals, e-commerce businesses, and even those with significant assets are covered by Nevada’s charging order protection.
- Determine your LLC’s ownership and management structure before formation. Nevada LLCs can have members without stakes in the business.
- Look at your long-term expansion plans. Nevada LLCs offer greater flexibility for multi-state operations.
Open an LLC in Nevada Today
Between Arizona and Nevada, the latter wins with operational flexibility for LLCs, no state income taxes, and a business-friendly legal environment. Growing and high-risk businesses can take advantage of all three when they operate in Nevada.
If you’re launching a new LLC in the Silver State, NCH is here to help you throughout the formation process.
DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.