Limited liability companies (also known as “LLCs”) are a well-known business structure. This form of business entity is especially popular among startup businesses. LLCs can offer great benefits for business owners by providing limited liability protection for them. LLCs are very popular across the States, and with the recent Pro-Tech Awards in Arizona highlighting the opportunities of an LLC to a new generation of tech entrepreneurs, there are many new startups looking to go in that direction.

To help everyone who is considering a new startup, here are the things you need to consider when opening an LLC in Arizona.

What is an LLC?

Simply put, a limited liability company is a business entity that is owned and operated by one entity. This may be you as the sole owner or in collaboration with other owners, but the owners have total control of the business. This flexibility is great for startups as it provides the flexibility they need whilst also reducing the risks inherent to other business models like sole proprietorships.

LLCs vs Other Business Models

Many business owners prefer to form their businesses as LLCs for various reasons but ensuring limited personal liability when starting a new business is one of the most important reasons. Other than liability protection, having an LLC can greatly reduce your amount of paperwork, add more credibility to your business, and can provide tax benefits. For small businesses, forming an LLC is considered the most appealing as they offer more protection regarding personal assets than forming a sole proprietorship. In addition, compared to corporations, LLCs are easier to form and operate as well.

Detailed Advantages of an LLC

Limited Personal Liability

When you form an LLC, you can create a separation between you personally and your business itself. This is highly recommended to help you avoid being liable for your business’ obligations or debts and having to put your personal assets on the line. This is important when Forming an LLC in Arizona and elsewhere, as startups often begin with limited funds, so this setup is ideal to reduce the risks and encourage entrepreneurship.

Reduced Formalities

Forming business entities generally comes with a vast number of legal and technical boxes to check along with the related paperwork. In contrast to sole proprietors, corporations and partnerships, LLCs are simpler to form and require less paperwork during their operation.

Management Flexibility

Business structures such as corporations tend to have a fixed structure of management that typically involves parties such as shareholders and board of directors. With LLCs, the management process is more flexible with a less formal structure and resultant discussion required. In today’s fast moving business world, this is a major advantage as business decisions and business plans can be made in a more timely manner with greater flexibility.


One of the biggest advantages for LLCs is that they can pick how they want to be taxed. For instance, you can choose to be taxed in the way a sole proprietor or a partnership will be taxed. In case you decide to change your business classification in the future to fit new business plans, you can file your paperwork to change this later.

It is important to compare the pros and cons of each business structure available and take into consideration what is best fit to your business needs. As forming an LLC offers various advantages to business owners and startup businesses, entrepreneurs in different industries are now seriously considering LLCs to be the most ideal. You can even choose to form your business as an LLC to build strong foundations and then adjust how your business operates as you go.