Arizona vs. Delaware LLC Formation — 2026 Cost & Requirements Comparison

1. Compare formation costs: AZ $50 vs. DE $90 Arizona's formation fee ($50) is $40 less than Delaware's ($90). The difference is modest, but Arizona's total first-year cost — $50 filing + RA service (~$50–$100) — is dramatically lower than Delaware's first-year cost of $90 + $300 Annual LLC Tax + RA service. Over the life of a typical Arizona-based small business, the cost difference is one of the most favorable in the U.S.
2. Understand Arizona's zero annual report advantage Arizona is one of a small number of U.S. states with no annual report requirement for LLCs. Once the LLC is formed and a registered agent is maintained, there are no recurring state filing fees. Over 3 years: Arizona ~$50 ($50 formation, $0/yr ongoing) vs. Delaware ~$990 ($90 + 3×$300). For a 10-year holding period, Arizona saves approximately $3,000 in Annual LLC Tax compared to Delaware — all else being equal.
3. Consider Delaware's Court of Chancery advantage Delaware's primary structural advantage is its Court of Chancery — a dedicated business court with specialist judges (chancellors) and no juries. Over a century of LLC and corporate case law makes business disputes highly predictable. This matters for venture-backed startups, multi-entity holding structures, and companies expecting investor scrutiny. For most Arizona-based small businesses and operating LLCs, this advantage does not apply and does not justify the $300/yr Annual LLC Tax.
4. Evaluate privacy: DE member non-disclosure vs. AZ Articles Delaware's Certificate of Formation requires only the LLC name and registered agent — member names and addresses are entirely absent from the public record. Arizona's Articles of Organization may list member or manager information depending on how the LLC is managed. For business owners who want maximum privacy, Delaware's structure is meaningfully stronger. However, this requires a DE-address registered agent ($50–$150/yr) for out-of-state owners.
5. Factor in the foreign qualification cost for Delaware Most Delaware LLCs formed by Arizona-based owners that operate in Arizona will trigger an Arizona foreign LLC registration requirement ($85 Application for Registration). The Arizona RA obligation then applies on top of Delaware's $300/yr Annual LLC Tax. The combined annual carrying cost makes Delaware formation approximately $300/yr more expensive for an Arizona-operating LLC than forming directly in Arizona.
6. Note: Arizona's publication requirement was eliminated in 2023 Arizona previously required LLCs to publish notice of formation in a county newspaper for three consecutive weeks. This requirement was eliminated effective September 1, 2023, under AZ HB 2088. LLCs formed in Arizona after that date have no publication obligation. This removes what was historically the only significant friction point in Arizona LLC formation.
7. Choose your state and file Arizona: file at ecorp.azcc.gov (Articles of Organization, $50). Delaware: file at icis.corp.delaware.gov (Certificate of Formation, $90). After formation, obtain an EIN at irs.gov/ein, draft an operating agreement, and open a business bank account. Arizona-based business owners should almost always form in Arizona — no annual report fee is a durable, multi-year cost advantage. Delaware makes sense when structural advantages (Court of Chancery, investor familiarity, privacy) outweigh the $300/yr Annual LLC Tax and dual-state carrying cost.

Arizona LLC Act, ARS § 29-3101 et seq. (Arizona Revised Uniform Limited Liability Company Act, effective September 1, 2019); ARS § 29-3203 (formation filing); AZ HB 2088 (publication requirement elimination, effective September 1, 2023); Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq.; Delaware Annual LLC Tax: 30 Del. C. § 502(b); IRS guidance on single-member LLC disregarded entity treatment.

FAQ

Arizona vs. Delaware LLC — common questions