Section 3.1 Checklist of Tasks to Complete in the First 75 Days after Your LLC is Formed
If you thought that filing the Articles of Organization and getting it approved by the Arizona Corporation Commission was all you had to do for your new LLC you are mistaken. There are a number of post Article filing tasks that must be accomplished to get your LLC up and running properly.
The following table contains a list of the most important tasks the your new Arizona limited liability company must accomplish within the 75 days of filing the Articles of Organization. The right column titled “Responsible Party” names the person who is responsible for accomplishing the designated task. If this column names KEYTLaw then we will perform the task. If it names Manager then the manager must perform the task. If it names a third party the manager must coordinate with the third party to accomplish the task.
| Event | Due Date | Responsible Party |
|---|---|---|
| 1. Create the LLC. File the LLC's Articles of Organization with the Arizona Corporation Commission. | The day you approve the LLC formation questionnaire you submitted to us and pay the fee. | KEYTLaw |
| 2. Articles of Organization. We email the Articles or Organization approved by the ACC to the LLC's contact person. | The day we file the Articles of Organization with the ACC | KEYTLaw |
| 3. Operating Agreement. We prepare the Operating Agreement. We send the Operating Agreement via DocuSign to all the members of the LLC for their digital signatures. | One or two business days after we file the Articles of Organization. | KEYTLaw |
| 4. Organizational Resolutions: Silver & Gold LLC Purchasers. We prepare the organizational Resolutions of the Members and put it behind the tab of the same name in the LLC portfolio. | This document is included in the portfolio we mail to the contact person two or three business days after the Articles of Organization are filed. | KEYTLaw |
| 5. Membership Certificates: Silver & Gold LLC Purchasers. We prepare a membership certificate for each member and put it behind the tab of the same name in the LLC portfolio. | This document is included in the portfolio we mail to the contact person two or three business days after the Articles of Organization are filed. | KEYTLaw |
| 6. Disclaimer. If any married member will own his or her membership interest as separate property we prepare a Disclaimer for the non-owner spouse to sign that acknowledges that he or she does not have any interest in the LLC. The Disclaimer is found at the end of the Operating Agreement. You can make your own Disclaimer by copying and pasting the sample Disclaimer in the Operations Manual into your Word processor then editing it. | The Disclaimer is the last page of the Operating Agreement that we email to the members the day the LLC is formed or the next day. | KEYTLaw |
| 7. Mail LLC Portfolio: Silver & Gold LLC Purchasers. The portfolio contains all of your LLC documents organized behind tabs. We mail it to the LLC's contact person. | Two or three business days after the Articles of Organization are filed. | KEYTLaw |
| 8.a. Employer ID Number (EIN): Silver & Gold LLC Purchasers & Bronze LLC Purchasers Who Paid for this Service. Complete, print, sign and send the partially completed IRS form SS-4 to us. For help completing this form see How to Complete IRS form SS-4. When we have the signed & completed SS-4 we will get the EIN and email it to the LLC's contact person. See Section 11.2 for a discussion on how to get the EIN for Your LLC. | The day a member of the LLC digitally signs IRS form SS-4 or the next business day. | KEYTLaw |
| 8.b. Employer ID Number (EIN): Bronze LLC Purchasers Who Did Not Pay Extra for this Service. See Section 11.2 for a discussion on how to get the EIN in five minutes from www.irs.gov. When you see your new EIN on the IRS' website, print the page on the IRS' website that displays the EIN. | As soon as possible after forming the LLC. | Member, Manager or Accountant |
| 9. Safe Guard IRS EIN Documentation. When you get your EIN letter from the IRS keep it in a safe place because third parties will ask for the EIN. | Approximately 2 - 3 weeks after obtaining the EIN the IRS will mail to the LLC's responsible party a letter that confirms the LLC's EIN. | Manager |
| 10. Open LLC's Bank Account. See Section 5.1. You need two items to open a bank account: (i) Articles of Organization with the ACC stamp on it, and (ii) the EIN. A few banks also require a copy of the Operating Agreement. If a trust owns your LLC you will also need to give the bank a copy of your trust agreement or the trust's Certification of Trust. | As soon as possible, but not later than when the LLC first receives revenue | Manager |
| 11. File the LLC's FinCEN Beneficial Owner Information Report. The company must file a FinCEN Beneficial Owner Information report with the U.S. Treasury's Financial Crimes Enforcement Network that discloses information about the company's owners or be fined $500 a day for every day the report is late. | Not later than 90 days after the company's Articles of Organization were filed. To learn more about this nasty requirement sign up for FinCEN Filer, LLC's free Corporate Transparency Act newsletter. | We file the FinCEN BOI report for Silver & Gold LLC formation packages and Bronze LLC formation packages that paid an additional amount for this service. |
| 12. Set Up Bookkeeping System. Purchase QuickBooks and configure it to do the LLC's bookkeeping. See Section 5.5. We recommend you hire Joy Jaske, CPA, of CPA for Hire, P.C., 33755 North Scottsdale Road #130, Scottsdale, Arizona 85266; Phone 480-437-9022. Her company only does bookkeeping for small businesses, including our books. | Immediately, but not later than when the LLC receives its first revenue or pays money from its bank account | Manager or Accountant |
| 13. Get Insurance. Before engaging in any activity, including owning real estate, the LLC must purchase insurance in amounts and types appropriate for the company’s activities and for the assets owned by the company. Consult with an experienced business insurance agent. | Before engaging in business or acquiring assets | Manager |
| 14. Get State & Local Sales Tax License. If your LLC will engage in an activity that requires an Arizona state and/or local jurisdiction transaction privilege tax license (aka a sales tax license) get the license. Get an Arizona sales tax license from the Arizona Department of Revenue. See Chapter 14. | Before engaging in activity in Arizona that requires a license | Manager or Accountant |
| 15. Safe Guard Sales Tax License Number. Insert the transaction privilege tax license information in your AZ LLC portfolio or company records. | When received | Manager |
| 16. Review Operating Agreement. Have all members review the Operating Agreement. If the members want to modify the Operating Agreement or discuss possible changes, contact LLC attorney Richard C. Keyt at 480-664-7472 (email [email protected]). | As soon as possible | All Members |
| 17. Sign Operating Agreement. All members should sign the Operating Agreement. Any member who does not sign the Operating Agreement will not be bound by it. | As soon as possible | All Members |
| 18. Springing Member. If your Operating Agreement has a springing member clause and you want the LLC to have a springing member, insert the springing member's name where indicated at the end of the Operating Agreement and have the Springing Member sign below his or her name. See Section 6.6. | As soon as possible | Manager & Springing Member |
| 19. Non-economic Member. If your Operating Agreement has a non-economic member article and you want the LLC to have a non-economic member, insert the non-economic member's name where indicated at the end of the Operating Agreement and have the Non-economic Member sign below his or her name. See Section 6.7 | As soon as possible | Manager & Non-economic Member |
| 20. Organizational Resolutions: Silver & Gold LLC Purchasers. Arrange to have all members sign the organizational resolutions. Put a fully signed copy of the resolutions behind tab called Resolutions in the LLC portfolio. | As soon as possible | Manager & All Members |
| 21. Membership Certificates: Silver & Gold LLC Purchasers. The manager must sign the membership certificates, deliver originals to the member named on the certificate and keep a copy in the LLC's portfolio. | As soon as possible | Manager |
| 22. Confidential Trust. If any member is the trustee of a Confidential Trust: The trustmaker(s) must sign the trust agreement. See Section 2.9. Keep a signed copy in a safe place. | As soon as possible | Trustmaker(s) |
| 23. Give all Members Copies of LLC Documents. Give every member a copy of the Articles of Organization and fully signed copy of the Operating Agreement. Silver & Gold LLC purchasers should also give all members a copy of the signed organizational resolutions and give each member the member's original membership certificate. | As soon as possible | Manager |
| 24. Approved Articles of Organization: Silver & Gold LLC Purchasers. Insert the Articles of Organization approved by the ACC and the ACC's approval letter in the LC portfolio. | When received | Manager |
| 25. Newspaper Publication. If the street address of the LLC's statutory agent is not in Maricopa or Pima County the LLC must publish a notice of the filing of the Articles of Organization in a newspaper of general circulation in the county of the statutory agent’s street address for three consecutive publications. | Within sixty days after the Arizona Corporation Commission files the Articles of Organization | Publication is not required if KEYTLaw is the statutory agent. |
| 26. Affidavit of Publication. If publication is required, send a copy of the Affidavit of Publication to the ACC and the LLC's contact person. | Although Arizona LLC law no longer requires the LLC to file an Affidavit of Publication with the Arizona Corporation Commission we reommend the LLC file the affidavit so there is proof on the public record that the LLC complied with the law and timely published in the newspaper. | Not applicable if KEYTLaw is the statutory agent. |
| 27. Affidavit of Publication. Insert a copy of the Affidavit of Publication in the LLC's portfolio. | When received from the newspaper | Manager |
| 28. Tax Advisor. Consult with a tax accountant to determine the best method of federal income taxation (sole proprietorship, partnership, C corporation or S corporation) for the LLC and its members. See Chapter 11 and Professional We Like for our list of Arizona CPAs. | As soon as possible, but not later than 75 days after the date the LLC was created. | Manager |
| 29. Optional: File IRS Form 8832. File IRS Form 8832 (if C corporation taxation is desired) with the IRS to elect federal income tax method different from IRS default tax method (sole proprietorship for single member LLCs and partnership for multi-member LLCs) | As soon as possible,but not later than 75 days after the date the LLC was created or the date you want the LLC to be taxed as a C corporation if later | Manager or Accountant |
| 30. Optional: File IRS Form 2553. File IRS Form 2553 (if S corporation taxation is desired) with the IRS to elect federal income tax method different from IRS default tax method (sole proprietorship for single member LLCs and partnership for multi-member LLCs) | As soon as possible, but not later than” (i) 2 months and 15 days after the date the LLC was created or (ii) the beginning of the first fiscal year you want S corp status if the LLC did not elect S corp from day one | Manager or Accountant |
| 31. Review ACC LLC Database. Review the LLC’s information on file in the ACC's LLC Information Database to make sure that the members and managers names and address and the domestic address is correct and that all other information about the LLC displayed on the ACC's website is correct | Not later than 90 days after the LLC is created and at least once every calendar year thereafter | All Members & Managers |
| 32. Meetings of Members. If the LLC has multiple members (other than a husband and wife) the members should hold meetings of members and managers to approve or reject major company actions and document the meetings with minutes and resolutions. See Section 4.9 | Not required by Arizona law, but recommended at least once a year to prove that the LLC is operated like a business rather than a hobby. This is an important factor the courts consider when a plaintiff asks the court to pierce the company veil and hold the members of the LLC liable for the LLC's debts. | All Members & Managers |
| 33. Monitor ACC Record. Correct any inaccurate information about the company or its members and managers contained in the . To check the status of your LLC look it up on the ACC's LLC Database. | Whenever inaccurate information exists. If you need to update any addresses complete and submit our LLC, Member & Manager Address Change Questionnaire. | All Members & Managers |
Section 3.2 The Operations Compliance Alert System
Because we were hired to form the Company, we added the manager/contact person to our LLC Alert System. The LLC Alert System is our automated email system that sends periodic alerts to the members of the Company concerning important operational issues. It’s an automatic tickler / reminder system for Arizona LLCs. Here are just a few examples of what the LLC Alert System does:
- Reminds the members to get an Employer ID Number (EIN) if we didn’t get it for the LLC.
- Reminds the members to open a bank account in the Company’s name.
- Reminds the members to sign the Operating Agreement and the organizational documents.
- Reminds the members to set up a bookkeeping system.
- Reminds the members to consult with a tax advisor in the first 75 days after forming the LLC with respect to which of the four possible federal income tax methods is best for the Company and its members.
- Reminds the members of the deadline for electing C corporation or S corporation federal income tax methods.
- Reminds real estate Companies to convey the real estate to the Company by signing and recording a deed in the appropriate county.
- Reminds the members to document loans made by the members to the Company.
See the subjects of the 49 email messages contained in the Alert system.
Arizona law requires that the LLC keep its ACC information current, but most people never think to check to see if it is out of date. The LLC Alert System sends reminder email alerts to the members twice a year to check the LLC’s information on file with the Arizona Corporation Commission to confirm that all information is correct.
But the LLC Alert System is more than just a reminder system. It can also help you complete LLC operational tasks. To check the ACC information for your LLC, you simply click on the link in the LLC Alert System reminder email alert and you are taken to the ACC’s website where you can enter the name of your LLC and review the information about your LLC on file with the ACC.
If you need to update an address or appoint a new statutory agent, click on the link in the LLC Alert System reminder email alert to access the ACC’s change of address form. This online fill-in-the-blanks change of address form is on the KEYTLaw website. To change an out of date address for the Company, member or manager, you simply fill out the form online, print and sign it then mail the form to the ACC with a check for $5.
The LLC Alert System is intended to make complying with Arizona LLC law easier. LLC Alert System subscribers do not have to: (1) trust their memory to check the Company’s address on file with the ACC, (2) waste time trying to find the ACC’s change of address form on the its website, or (3) use the ACC’s non-fill-in-the-blanks change of address form. The LLC Alert System simplifies the entire ACC data checking and updating process for you.
If you are the manager and contact person for the Company and you are not getting emails from Richard Keyt that remind you of operational tasks the Company must accomplish, send Rick an email at [email protected] and ask him to add you to the LLC Alert System.