Forming a Partnership in Arizona

Here is an outline of the steps you need to follow in order to form a partnership in Arizona. You should also read the general section on forming a partnership for information applicable in any state.

1. Choose a business name for your partnership and check for availability.

  • If you are forming a limited partnership (i.e., a partnership made up of one or more general partners and one or more limited partners, whose liability for the debts of the partnership is limited), your partnership name must include the words “limited partnership” or the initials “l.p.” or “LP”, in upper or lower case, and may not include the name of any limited partner, unless certain exceptions apply. A.R.S. § 29-302.

2. Register the business name with local, state, and/or federal authorities.

  • If you will be operating your partnership under a name that is different from your name and that of your partners, then you will need to file a certificate stating in full the names of all members of the partnership and their place of residence, signed by the partners and acknowledged, with the county recorder in the county where your business is located. A.R.S. § 29-102.
  • A “statement of partnership authority” may be filed with the Office of the Secretary of State of Arizona. A.R.S. §§ 29-1001, -1005, -1023.
  • Although you are not required to do so, you should consider registering your business name as a federal and/or state trademark. Please see the Trademark for Business Naming section for details.
  • If you are forming a limited partnership, you must maintain an office in Arizona and designate an agent for service of process on the limited partnership. A.R.S. § 29-304. You must also keep certain records at your office described in A.R.S. § 29-305.

3. Draft and sign a partnership agreement.

  • Although not legally required, it is strongly suggested that you and your partners sign a partnership agreement laying out the rights and responsibilities of the partners. A.R.S. 29-1003 places some limits on provisions the partnership agreement may include. For details, please see the Partnership Agreements section.

4. Obtain any required local licenses.

5. Determine what tax and other regulatory obligations your partnership has, and take care of any necessary registrations.

  • Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
  • If you have an employee or employees to whom you page wages for services performed in Arizona, you must register complete the Joint Tax Application for employer withholding and unemployment insurance. You can do this via the Arizona Department of Revenue website (click on “License a New Business”), which you can also use to register for other business taxes (if applicable).
  • Whenever you hire an employee in Arizona, you must inform both the IRS and the State of Arizona. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information at the Arizona New Hire Reporting website.
  • Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007. A.R.S. 23-214.
  • As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.

6. Open a bank account for your business.

  • It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN) and either a copy of the partnership agreement or a business name filing indicating the partners' names. (Here is one example of the documentation banks ask for.)

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