Choosing the right state for your LLC is crucial as it impacts everything from costs to taxes and regulations.
Here we’ll break down the cost breakdown between the two Arizona and Missouri LLCs, highlight their similarities and differences, provide step-by-step guides on how to form LLC in each state, and compare key features such as taxes and flexibility in rules and regulations, so you can make the best decision when starting or expanding your business.
Arizona vs. Missouri LLC
Arizona and Missouri have specific processes for forming an LLC, involving filing the necessary documents and paying fees.
While not mandatory, having a written operating agreement is recommended in both states to establish ownership, management, and operational guidelines.
Both states treat LLCs as pass-through entities, where profits and losses are reported on individual members’ tax returns, but specific tax laws and rates may differ.
Consulting a tax professional is important to understand state-specific obligations.
| Arizona LLC | Missouri LLC |
|---|---|
| Arizona requires a filing fee of $50 for the Articles of Organization. | Missouri has a higher formation fee, requiring a filing fee of $50 for the Articles of Organization. |
| It has a publication requirement where they must publish a notice of formation in an approved newspaper. | It does not have a publication requirement. |
| Arizona LLCs have no fee and no information report | Missouri LLCs also have no fee and no information report |
| It has a state sales tax rate of 5.6%, with the average combined rate being 8.4% due to local additions. | It has a state sales tax rate of 4.225%, with the average combined rate being around 8.2% due to local additions. |
| Arizona has a corporate income tax rate of 4.9% on net income for C corporations. | Missouri imposes a corporate income tax rate of 4% on net income. |
| It has relatively low property tax rates compared to many other states, averaging around 0.63% of assessed value. | It has moderate property tax rates, with an average effective rate of approximately 0.88% of the assessed value. |
Cost Breakdown of The Two
You may use our free LLC cost calculator by state to find out filing fees, tax percentages, income taxes, and more.
Arizona LLC
The filing fee for the Articles of Organization with the Arizona Corporation Commission is $50.
Arizona requires LLCs to publish a notice of formation in a newspaper approved by the county where the LLC is located.
The cost of this publication can vary depending on the newspaper and location.
Arizona LLCs are not required to file an Annual Report with the Arizona Corporation Commission.
LLCs in Arizona must have a registered agent, which is a person or entity responsible for receiving legal documents on behalf of the company. Registered agent services typically range from $50 to $300 per year.
Missouri LLC
The filing fee for the Articles of Organization with the Missouri Secretary of State is $50.
Missouri does not have a publication requirement for LLCs.
Missouri LLCs are not required to file an Annual Report with the Missouri Secretary of State.
Similar to Arizona, LLCs in Missouri must have a registered agent, and the cost of registered agent services can vary.
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- Missouri LLC: Cost Breakdown, Pros and Cons, Requirements
Similarities Between Arizona and Missouri LLC
Both Arizona and Missouri provide limited liability protection to LLC owners.
This means that the personal assets of the owners are generally protected from the debts and liabilities of the LLC.
This is one of the main advantages of operating as an LLC.
Both states treat LLCs as pass-through entities for tax purposes.
This means that the LLC itself does not pay taxes on its profits. Instead, the profits and losses “pass through” to the individual members, who report them on their tax returns.
This simplifies the tax filing process for LLC owners.
Both Arizona and Missouri allow for flexible management structures within an LLC. Members can choose to manage the LLC themselves or appoint managers to handle day-to-day operations.
This provides flexibility in structuring the management of the LLC according to the owners’ preferences.
While not legally required in either state, having an operating agreement is highly recommended in both Arizona and Missouri.
The operating agreement is a document that outlines the ownership, management, and operational procedures of the LLC.
It helps establish clear guidelines and expectations among the members, reducing potential disputes and conflicts.
Both states require LLCs to file annual reports with their respective state agencies. These reports typically include basic information about the LLC, such as its name, principal address, and registered agent.
Filing annual reports helps maintain good standing and compliance with state regulations.
Both Arizona and Missouri require LLCs to have a registered agent. A registered agent is a person or entity designated to receive legal and official documents on behalf of the LLC.
This ensures that important communications and notices reach the LLC promptly.
Additional Resources:
- Arizona vs. Connecticut LLC
- Arizona vs. Delaware LLC
- Best States to Form LLC For Non-resident Individuals
Steps to Form LLC in Arizona
Choose a name for your LLC that complies with Arizona’s naming requirements.
File Articles of Organization with the Arizona Corporation Commission and pay the required filing fee.
Designate a registered agent with a physical address in Arizona.
Create an operating agreement, although it is not legally required.
Publish a notice of formation in a newspaper approved by the county where the LLC is located.
Obtain any necessary business licenses or permits at the local or state level.
Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you have employees or plan to hire them.
Comply with any additional tax and regulatory requirements at the state and federal levels.
Steps to Form LLC in Missouri
Choose a name for your LLC that complies with Missouri’s naming requirements and is distinguishable from other business entities.
File Articles of Organization with the Missouri Secretary of State and pay the required filing fee.
Designate a registered agent with a physical address in Missouri.
Consider creating an operating agreement, although it is not legally required.
Obtain any necessary business licenses or permits at the local or state level.
Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you have employees or plan to hire them.
Comply with any additional tax and regulatory requirements at the state and federal levels.
Keep accurate records of your LLC’s activities, including financial transactions, meeting minutes, and important documents.
Feature Comparisons Between Arizona LLC vs. Missouri LLC
The process of forming an LLC in Arizona and Missouri involves filing the Articles of Organization with the respective state agencies.
Both states require a filing fee, but the specific forms and requirements may differ slightly.
Arizona has a publication requirement where LLCs must publish a notice of formation in an approved newspaper.
Missouri, on the other hand, does not have a publication requirement for LLCs.
While an operating agreement is not legally required in either state, having one is highly recommended.
The content and flexibility of operating agreements may vary depending on the specific needs of the LLC and the state’s laws.
Both Arizona and Missouri provide limited liability protection to LLC owners, meaning that the personal assets of the owners are generally shielded from the debts and liabilities of the LLC.
Both states allow for flexible management structures within an LLC. Members can choose to manage the LLC themselves or appoint managers to handle day-to-day operations.
Both Arizona and Missouri require LLCs to have a registered agent. A registered agent is responsible for receiving legal and official documents on behalf of the LLC.
Business Environment
Arizona LLC
Arizona has a diverse and growing economy with sectors such as healthcare, tourism, technology, manufacturing, and real estate.
The state offers a business-friendly environment, with incentives for businesses and a supportive entrepreneurial ecosystem.
Arizona has a moderate tax environment for businesses. The state has a corporate income tax rate of 4.9%, and LLCs are generally taxed as pass-through entities, with profits and losses flowing through to individual members’ personal tax returns.
Arizona has a relatively business-friendly regulatory environment, with streamlined processes for business formation and compliance.
The Arizona Corporation Commission is the primary agency responsible for business registration and regulation.
Missouri LLC
Missouri also has a diverse economy, with industries such as manufacturing, agriculture, healthcare, transportation, and financial services.
The state offers a range of business opportunities and has a history of fostering entrepreneurship and innovation.
Missouri has a corporate income tax rate of 4%, making it relatively competitive. LLCs are treated as pass-through entities for tax purposes, similar to Arizona, with profits and losses passed through to individual members.
Missouri has a business-friendly regulatory environment, with streamlined processes for business formation and compliance.
The Missouri Secretary of State is the main agency responsible for business registration and oversight.
Read Also:
Arizona vs. Missouri Taxes
Arizona Taxes
Arizona does not have a state income tax for individuals or businesses.
The state sales tax rate in Arizona is 5.6%, but local jurisdictions can add additional sales tax, making the combined rates vary across the state.
The average combined sales tax rate in Arizona is approximately 8.4%. Certain items, such as groceries and prescription drugs, are exempt from sales tax.
Arizona has relatively low property tax rates compared to many other states.
The exact rates vary by county, but the average effective property tax rate in Arizona is around 0.63% of a property’s assessed value.
Arizona imposes a corporate income tax with a flat rate of 4.9% on C corporations’ net income.
LLCs and other pass-through entities are generally not subject to a separate state-level business income tax, as profits and losses flow through to individual members’ tax returns.
Missouri Taxes
Missouri has a progressive income tax system with a maximum tax rate of 5.4%.
The state has ten tax brackets, and higher-income individuals pay higher rates. Similar to Arizona, Missouri allows for has has various deductions and exemptions.
The state sales tax rate in Missouri is 4.225%. However, local jurisdictions can impose additional sales tax, leading to combined rates that vary across the state.
The average combined sales tax rate in Missouri is around 8.2%.
Missouri’s property tax rates are relatively moderate. The average effective property tax rate in Missouri is approximately 0.88% of a property’s assessed value.
Property assessments and tax rates vary by county and local jurisdictions within the state.
Missouri imposes a corporate income tax with a flat rate of 4%. Like Arizona, LLCs and other pass-through entities are generally not subject to a separate state-level business income tax, and profits and losses flow through to individual members’ tax returns.
Flexibility in Rules and Regulations
Arizona
Arizona is known for its business-friendly climate, which includes streamlined processes for business formation and a welcoming atmosphere for entrepreneurship, and innovation.
The state strives to simplify regulations and reduce bureaucratic barriers to business.
Agencies like the Arizona Corporation Commission work towards efficient regulation and provide resources to assist businesses in complying with rules.
Arizona has taken steps to reduce occupational licensing requirements, promoting economic growth and entrepreneurship by making it easier for individuals to enter various professions.
Arizona allows for various business structures, including LLCs, corporations, partnerships, and sole proprietorships, giving entrepreneurs the flexibility to choose the organizational structure that best suits their needs.
Arizona offers tax credits and incentives to businesses in targeted industries, encouraging investment and growth.
Missouri
Missouri aims to create a business-friendly environment, promoting economic development and growth.
The state has initiatives and programs in place to support entrepreneurs and attract businesses.
Missouri has made efforts to review and reform regulations to eliminate unnecessary burdens and streamline processes for businesses, fostering a more flexible regulatory environment.
The state provides resources, funding, and support to foster innovation and entrepreneurship, encouraging businesses to pursue new ideas and technologies.
Missouri offers various incentives and tax credits to businesses that invest in the state, expand operations, or create jobs, providing flexibility and potential financial benefits.
Key Differences Between Arizona and Missouri- An Overview
