INCLUDED WITH OUR SILVER & GOLD LLC PACKAGES
The Arizona LLC Legal Audit

Forming an LLC is easy. Operating one correctly takes knowledge. After forming 10,000+ Arizona LLCs, we know the i’s and t’s owners most often fail to dot and cross. When you hire us to form your LLC with our Silver or Gold package, you get the Arizona LLC Legal Audit — 76 plain-English questions that show you exactly what your LLC still needs to do. This page is a preview of every question, Alert and Task in the audit.


76
audit questions
16
audit sections
73
Alerts & Tasks
2
packages: Silver & Gold
 

What Silver & Gold LLC Clients Get


The audit is designed for the person who runs the LLC — a manager of a manager-managed LLC or a member of a member-managed LLC. It is divided into sections, and not every section applies to every company. Here is how it works for our clients:


1
We form your LLC
You hire KEYTLaw to form your Arizona LLC with our Silver or Gold package. We prepare and file everything.
2
You get the audit
We send you the Arizona LLC Legal Audit. You answer the questions that apply to your LLC — the five core sections plus any optional sections that fit.
3
You know what to do
Every answer that reveals a problem points you to an Alert that explains the law or a Task that tells you what to do next.
 
ALERTAlerts explain the law

An Alert gives you important information about a legal issue that affects your LLC.


TASKTasks are to-dos

A Task is something your LLC should do as soon as possible. KEYTLaw is not responsible for completing any Task unless we are hired to do so in a separate written agreement.


 

The 16 Parts of the Audit


Parts 1–5 (navy) apply to every Arizona LLC. Parts 6–16 (gold) apply only if your LLC has the listed situation. Click any part to jump to it.


 
👁  You Are Viewing a Preview

Below is every question in the Arizona LLC Legal Audit. Click a question to open it and see its answer choices and the Alerts and Tasks it can trigger. The answer choices are shown for reference only and cannot be selected. Silver and Gold LLC clients receive the audit after we form their LLC.


 
PART 1 OF 16

Your LLC at a Glance


Five quick background questions. There are no wrong answers here — your answers help you decide which sections of the audit apply to your company.


 
Q1How many members does your LLC have?Click to openClick to close
Members are the owners of the LLC.
ANSWER CHOICES
One member
Two members who are married to each other
Two or more members who are not married to each other
 
Q2Where do the members live?Click to openClick to close
Select the statement that best describes your company’s members.
ANSWER CHOICES
No member of the LLC is an individual (all members are entities or trusts)
All members are Arizona residents
At least one member lives in Arizona and another member lives in another community property state
No member lives in Arizona, but at least one lives in another community property state
None of the above
 
Q3Who formed your LLC?Click to openClick to close
ANSWER CHOICES
KEYTLaw, LLC
Somebody other than KEYTLaw
 
Q4Which KEYTLaw formation package did you buy?Click to openClick to close
ANSWER CHOICES
Bronze
Silver
Gold
IRA LLC
 
Q5Is your LLC manager-managed or member-managed?Click to openClick to close
Your Articles of Organization state the type of management. You can also see it on the ACC’s website.
ANSWER CHOICES
Manager-managed
Member-managed
 
 
PART 2 OF 16

Arizona Corporation Commission Records


Your LLC’s public record at the Arizona Corporation Commission (ACC) must be accurate. Errors here cause rejected bank applications, lost lawsuits and missed legal notices.


 
🔍  Before You Answer: Pull Up Your LLC’s Public Record

Open the Arizona Corporation Commission’s entity database in a new tab, search for your LLC by name and click on it. Keep that page open while you answer the questions in this section.


If the ACC website shows information that differs from what your filed Articles of Organization actually say, the problem is a data-entry error at the ACC. Call the ACC at 602-542-3026 and point out the typo. If the information is wrong because your filed documents are wrong or out of date, the answers below explain which form fixes it.


 
Q6Is the LLC in good standing?TaskClick to openClick to close
On the ACC page for your LLC look for “Business Status: Active” and “Reason for Status: In Good Standing.”
ANSWER CHOICES
Yes. The ACC shows the LLC is in good standing.
No. The ACC shows the LLC is not in good standing.
TASKReinstate the LLC to Good Standing

Fix the problem immediately. If the problem is not corrected the ACC will administratively dissolve the LLC.


No statutory agent? Appoint a new one by filing an LLC Statement of Change of Principal Address or Statutory Agent together with a Statutory Agent Acceptance signed by the new agent.


No principal address? File the LLC Statement of Change of Principal Address or Statutory Agent to give the ACC the LLC’s address.


Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q7Is the LLC’s principal address correct?TaskClick to openClick to close
Compare the principal address on the ACC’s website with the LLC’s actual address.
ANSWER CHOICES
Yes. The principal address on the ACC’s website is correct.
No. The principal address on the ACC’s website is wrong.
TASKCorrect the LLC’s Principal Address

File the LLC Statement of Change of Principal Address or Statutory Agent to update the LLC’s principal address. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q8Is the statutory agent correct?Task + AlertClick to openClick to close
The statutory agent receives lawsuits and official notices for your LLC. Is the agent named on the ACC’s website the one you want?
ANSWER CHOICES
Yes. The statutory agent named on the ACC’s website is correct.
No. The statutory agent named on the ACC’s website is wrong.
The agent is correct, but I want to change statutory agents.
TASKAppoint a New Statutory Agent

File an LLC Statement of Change of Principal Address or Statutory Agent with the ACC. The new statutory agent must sign and file a Statutory Agent Acceptance. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
ALERTHire KEYTLaw as Your LLC’s Statutory Agent

KEYTLaw, LLC serves as statutory agent for $99 per year (free the first year for LLCs we form). Our statutory agent address is 24 W. Camelback Road, Suite 467, Phoenix, AZ 85013, which is in Maricopa County. To hire us, complete our Statutory Agent Questionnaire.


 
 
Q9Is the statutory agent’s street address correct?TaskClick to openClick to close
ANSWER CHOICES
Yes. The statutory agent’s street address is correct.
No. The statutory agent’s street address is wrong.
TASKCorrect the Statutory Agent’s Address

File an LLC Statement of Change of Principal Address or Statutory Agent with the correct street address. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q10Is the statutory agent’s street address in Maricopa or Pima County?AlertClick to openClick to close
This one answer decides whether your LLC had to publish a notice in a newspaper.
ANSWER CHOICES
Yes. Publication was not required. The ACC posts the notice on its website.
No. The agent’s address is in another Arizona county.
ALERTNewspaper Publication Is Required

Under A.R.S. §29-3201, if your statutory agent’s street address is outside Maricopa and Pima Counties, the LLC must publish a notice of the filing of its Articles of Organization in a newspaper of general circulation in the county of the agent’s street address. The notice must run three consecutive times, and publication must happen within 60 days after the ACC approves the Articles. Answer the next three questions.


 
 
Q11Did the LLC publish its notice in a newspaper?TaskClick to openClick to close
Answer only if your statutory agent is outside Maricopa and Pima Counties.
ANSWER CHOICES
Yes. The LLC published three consecutive times within 60 days.
No. The LLC did not publish.
Does not apply to my LLC
TASKPublish the Notice Now

Arizona LLC law does not spell out the consequence of failing to publish, but publication is mandatory. If your LLC has not published, publish immediately — even if the 60-day deadline has passed.


 
 
Q12Does the LLC have its Affidavit of Publication?TaskClick to openClick to close
After the notice runs, the newspaper sends an “Affidavit of Publication” to whoever placed the notice.
ANSWER CHOICES
Yes. The Affidavit of Publication is in the LLC’s records.
No. The LLC does not have the Affidavit.
Does not apply to my LLC
TASKGet Your Affidavit of Publication

Contact the newspaper that published your notice and ask for the Affidavit of Publication. It is your proof that the LLC complied with Arizona law. Keep it with the LLC’s permanent records.


 
 
Q13Does the ACC’s website show a publication date?TaskClick to openClick to close
Look for a date after “Original Publication Date” on your LLC’s ACC page.
ANSWER CHOICES
Yes. A publication date is shown.
No. The publication date is blank.
Does not apply to my LLC
TASKGet the ACC to Show Your Publication Date

If your LLC published and you have the Affidavit of Publication but the ACC shows no date, call the ACC at 602-542-3026. Ask whether the ACC has the Affidavit on file. If it does, ask the clerk to add the publication date. If it does not, ask how to deliver a copy so the date will appear on the ACC’s website.


 
 
 
PART 3 OF 16

LLC Formation Documents


Forming an LLC is easy. Operating one correctly requires the right documents — signed, distributed and kept in the LLC’s records.


 
Q14Do the members and managers have a copy of the filed Articles of Organization?TaskClick to openClick to close
The ACC’s approval stamp and file number appear at the top of the first page.
ANSWER CHOICES
Yes. Every member and manager has a copy.
No. Not everyone has a copy.
TASKGive Everyone a Copy of the Articles of Organization

Banks, lenders and title companies regularly ask for the Articles. If you do not have the approved copy, search for your LLC in the Arizona Corporation Commission’s entity database and download it. Then give a copy to every member and manager.


 
 
Q15Have all members signed an Operating Agreement?Task + AlertClick to openClick to close
The Operating Agreement is the LLC’s most important internal document.
ANSWER CHOICES
Yes. All members signed the Operating Agreement.
The LLC has an Operating Agreement, but not all members signed it.
The LLC does not have an Operating Agreement.
TASKGet Every Member to Sign the Operating Agreement

Arrange for every member to sign the Operating Agreement immediately, then give each member a copy of the fully signed agreement.


 
ALERTWhy Every Arizona LLC Needs an Operating Agreement

On September 1, 2019, Arizona replaced its old LLC law with the Arizona Limited Liability Company Act. Many of the new default rules can hurt members — and those rules control your LLC unless a signed Operating Agreement overrides them. We believe every Arizona LLC, single-member or multi-member, regardless of when it was formed, needs an Operating Agreement written for the current law.


Read Richard Keyt’s article 19 Ways Members Can Be Harmed if Their Multi-Member LLC Lacks an Operating Agreement. Every LLC we form under our Bronze, Silver and Gold packages includes a custom Operating Agreement signed with DocuSign. If your LLC needs a new or updated agreement, call 480-664-7478.


 
 
Q16Does every member have a copy of the signed Operating Agreement?TaskClick to openClick to close
ANSWER CHOICES
Yes. Every member has a signed copy.
No. Not every member has a signed copy.
I don’t know.
TASKGive Each Member a Signed Copy

Every member should have a copy of the Operating Agreement signed by all members. Distribute copies now.


 
 
Q17Have all managers signed the Operating Agreement?TaskClick to openClick to close
Answer only if the LLC is manager-managed.
ANSWER CHOICES
Yes. All managers signed.
No. Not all managers signed.
Does not apply to my LLC
TASKGet Every Manager to Sign

A manager who does not sign the Operating Agreement is not bound by the manager duties it contains. You want every manager legally obligated to perform those duties, which means every manager must sign.


 
 
Q18Does every manager have a copy of the signed Operating Agreement?TaskClick to openClick to close
Answer only if the LLC is manager-managed.
ANSWER CHOICES
Yes. Every manager has a signed copy.
No. Not every manager has a copy.
I don’t know.
Does not apply to my LLC
TASKGive Each Manager a Signed Copy

Give every manager a copy of the Operating Agreement signed by all members and managers.


 
 
Q19Does the Operating Agreement correctly state each member’s ownership percentage?AlertClick to openClick to close
ANSWER CHOICES
Yes. Every member’s percentage is correct.
No. One or more percentages are wrong or missing.
ALERTCorrect the Membership Percentages Now

Ownership percentages control voting, profits and what each member receives when the LLC is sold. Wrong percentages are a lawsuit waiting to happen. Amend the Operating Agreement and have all members sign it. Call attorney and former CPA Richard C. Keyt at 480-664-7472 to hire him to amend your Operating Agreement.


 
 
Q20Have all members signed the organizational resolutions?TaskClick to openClick to close
ANSWER CHOICES
Yes. All members signed the organizational resolutions.
No. Not all members have signed.
TASKGet All Members to Sign the Resolutions

The organizational resolutions are not legally effective until every member signs them. Collect the missing signatures.


 
 
Q21Has every member received a copy of the signed resolutions?TaskClick to openClick to close
ANSWER CHOICES
Yes. Every member has a copy.
No. Not every member has a copy.
TASKDistribute the Signed Resolutions

Give every member a copy of the resolutions signed by all members.


 
 
Q22Has a manager signed every membership certificate?TaskClick to openClick to close
Silver and Gold LLC clients will find the certificates in their LLC binder.
ANSWER CHOICES
Yes. All certificates are signed.
No. The certificates are not yet signed.
Does not apply to my LLC
TASKSign the Membership Certificates

Have a manager (or a member of a member-managed LLC) sign each membership certificate and keep a copy of each signed certificate in the LLC’s records.


 
 
Q23Has each member received his or her signed certificate?TaskClick to openClick to close
ANSWER CHOICES
Yes. Every member has a signed certificate.
No. Some certificates have not been delivered.
Does not apply to my LLC
TASKDeliver the Membership Certificates

Give each member the original membership certificate signed by the manager.


 
 
Q24Does the LLC keep the records Arizona law requires?AlertClick to openClick to close
ANSWER CHOICES
Yes. The LLC keeps every required record and members can inspect them.
No. The LLC does not keep all required records.
I don’t know which records are required.
ALERTRecords Every Arizona LLC Must Keep

A.R.S. §29-3410 requires every Arizona LLC to keep the following records and to let members and managers inspect and copy them:


  1. A current list of the full name and last known address of each member and manager.
  2. A copy of the Articles of Organization and all amendments.
  3. A copy of all current and prior written Operating Agreements and all amendments.
  4. Any record of a member’s obligation to make a capital contribution.
  5. The company’s federal, state and local income tax returns and reports, if any, for the three most recent years.
  6. The company’s financial statements, if any, for the three most recent years.

 
 
 
PART 4 OF 16

Managers


Answer this section if your LLC is manager-managed. Arizona law requires the Articles of Organization on file with the ACC to name every manager.


 
Q25Does the ACC’s website correctly name every manager?AlertClick to openClick to close
ANSWER CHOICES
Yes. Every manager is correctly named.
No. A manager is missing or a non-manager is listed.
Does not apply to my LLC
ALERTFix the Manager List

If a person or entity is wrongly listed as a manager, or a manager is missing, a manager must file Articles of Amendment with the ACC to correct the error. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q26Does the ACC’s website show the correct address of every manager?TaskClick to openClick to close
A manager’s address can be a home or business address, a U.S. post office box or a UPS Store box.
ANSWER CHOICES
Yes. Every manager’s address is correct.
No. At least one address is wrong.
Does not apply to my LLC
TASKCorrect the Manager’s Address

File a Statement of Change of Manager or Member Addresses with the ACC. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q27Do you want to add or remove a manager?AlertClick to openClick to close
ANSWER CHOICES
Yes. We want to add and/or remove a manager.
No. We do not want to change managers.
Does not apply to my LLC
ALERTHow to Add or Remove a Manager

Arizona LLC law provides these rules for electing a new manager:


  1. If the members signed an Operating Agreement, managers are designated, elected, removed and replaced as the Operating Agreement provides.
  2. If there is no Operating Agreement and every manager has resigned or stopped serving, a majority of the members elects the new manager(s). With three members a majority is two; with four members a majority is three.

If neither situation applies, Arizona law is silent. The best practice is for the members to vote on the addition or removal and document the vote in a resolution signed by the members.


After the change is properly approved, a manager must file Articles of Amendment with the ACC. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
 
PART 5 OF 16

Members


Who owns your LLC must be clear on the public record, in your Operating Agreement and in your estate plan.


 
Q28Member-managed LLCs: does the ACC’s website name every member?TaskClick to openClick to close
Arizona law requires the Articles of a member-managed LLC to name every member.
ANSWER CHOICES
Yes. Every member is correctly named.
No. A member is missing or a non-member is listed.
Does not apply to my LLC
TASKCorrect the Member Listing

A member of a member-managed LLC (or a manager of a manager-managed LLC) must file Articles of Amendment to correct the error. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q29Manager-managed LLCs: does the ACC’s website name every member who owns 20% or more?TaskClick to openClick to close
Arizona law requires the Articles of a manager-managed LLC to name every member who owns 20% or more of the LLC.
ANSWER CHOICES
Yes. Every 20%+ member is correctly named.
No. A 20%+ member is missing or a non-member is listed.
Does not apply to my LLC
TASKCorrect the 20% Member Listing

A manager must file Articles of Amendment to correct the error. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q30Does the ACC’s website show the correct address for every listed member?TaskClick to openClick to close
ANSWER CHOICES
Yes. Every listed member’s address is correct.
No. At least one address is wrong.
TASKCorrect the Member’s Address

File a Statement of Change of Manager or Member Addresses with the ACC. Paper filings must be accompanied by an ACC cover sheet. Most changes can also be filed online through the ACC’s eCorp online filing system, and online Statements of Change are generally approved automatically.


 
 
Q31Are there any former members of the LLC?Click to openClick to close
ANSWER CHOICES
Yes. At least one person or entity is no longer a member.
No. There are no former members.
 
Q32Did every former member sign a document transferring his or her membership interest?AlertClick to openClick to close
Answer only if the LLC has a former member.
ANSWER CHOICES
Yes. Every former member signed a dated transfer document.
No. At least one former member did not sign.
Does not apply to my LLC
ALERTMembership Interests Don’t Transfer by Osmosis

A former member must sign a document that transfers a specified percentage of the LLC to the person or entity receiving it, as of a specific date. To document a transfer yourself, use Richard Keyt’s editable Assignment of Membership Interest Agreement from our Keyt Forms website. Learn more in our article How to Add or Remove a Member of an Arizona LLC.


 
 
Q33Was the Operating Agreement amended to remove every former member?TaskClick to openClick to close
Answer only if the LLC has a former member.
ANSWER CHOICES
Yes. The amended agreement no longer names former members.
No. Former members are still parties to the agreement.
Does not apply to my LLC
TASKRemove Former Members from the Operating Agreement

The only way to remove a former member as a party is for all current members to sign an amended Operating Agreement. KEYTLaw can prepare an amended, current-law Operating Agreement that removes former members and adds new ones. Call 480-664-7478.


 
 
Q34Does the LLC have at least one member who is an individual Arizona resident?Click to openClick to close
ANSWER CHOICES
Yes
No
 
Q35Has every individual member signed an estate plan that says who inherits his or her LLC interest?AlertClick to openClick to close
ANSWER CHOICES
Yes. Every individual member has a will or trust that covers the LLC interest.
No. At least one member has no plan.
I don’t know.
ALERTWho Inherits Your Membership Interest?

Death is inevitable. A member who does not plan ahead lets Arizona law — not the member — decide who inherits the LLC interest. A will alone does not avoid probate, which can take months and cost thousands of dollars.


Two better options: a revocable living trust that owns the membership interest, or Richard Keyt’s Transfer of Membership Interest Testament, which passes the interest automatically at death without probate. See our Arizona Wills, Trusts & Estate Planning Articles and the 36 documents and services included in a KEYTLaw estate plan.


 
 
 
PART 6 OF 16  ·  OPTIONAL

Married Members & Community Property


For LLCs with a married member who lives in Arizona or another community property state.


 
ALERTMarried Members Who Are Arizona Residents

Arizona is a community property state (A.R.S. §25-211). When a married Arizona resident acquires an LLC interest, both spouses automatically own it as community property — even if only one spouse is named in the Articles of Organization or the Operating Agreement — unless one of these exceptions applies:


  1. The member acquired the interest before marriage.
  2. The member acquired the interest during marriage by gift or inheritance.
  3. The non-member spouse signed a Disclaimer acknowledging the interest is the member’s separate property.

If none of the exceptions applies and the spouse is not named as a member, the ACC record and the Operating Agreement may not accurately reflect who owns the LLC.


The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.


 
Q36Does a married member want to own his or her interest as separate property?Click to openClick to close
ANSWER CHOICES
Yes. At least one married member wants separate property ownership.
No.
Does not apply to my LLC
 
Q37Has every non-owner spouse signed a Disclaimer?TaskClick to openClick to close
Answer only if a married member wants separate property ownership.
ANSWER CHOICES
Yes. Every non-owner spouse signed a Disclaimer and copies are in the LLC’s records.
No. At least one Disclaimer is unsigned.
Does not apply to my LLC
TASKGet the Non-Owner Spouse to Sign a Disclaimer

If KEYTLaw formed your LLC: we prepared a Disclaimer for every Arizona resident member who intends to own the interest as separate property. It is at the end of the Operating Agreement. Have each non-owner spouse sign it.


If someone else formed your LLC: buy an editable Disclaimer form from our Keyt Forms website and have the non-owner spouse sign it. Give a copy to the other members.


 
 
 
PART 7 OF 16  ·  OPTIONAL

Member Capital Contributions


For an LLC with a member who has contributed, or will contribute, money or property.


 
ALERTWhat Is a Capital Contribution?

A capital contribution is money or property a member contributes to the LLC that the LLC does not have to repay. Under Arizona LLC law, no member is legally obligated to contribute money or property unless the member agreed to do so in writing. The most common way to create that obligation is language in the Operating Agreement signed by the member.


 
Q38Has every member who will contribute signed a written promise to do so by a specific date?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKPut Contribution Promises in Writing

If the LLC wants a member legally obligated to contribute, the member must sign a document promising to contribute specified money or property on or before a specified date. The best place for that promise is the Operating Agreement.


 
 
Q39Has every member paid what he or she promised?TaskClick to openClick to close
ANSWER CHOICES
Yes. All promised contributions have been made.
No. At least one member has not paid.
Does not apply to my LLC
TASKCure the Contribution Default

Send the defaulting member a demand letter by certified mail, return receipt requested, requiring payment within a reasonable time or the LLC will sue to collect.


 
 
Q40Has any member contributed (or will contribute) property other than money?TaskClick to openClick to close
Real estate, equipment, vehicles and intellectual property are common examples.
ANSWER CHOICES
Yes
No
TASKDocument Property Contributions

The contributing member and the LLC should sign a document stating the agreed value of the property on the contribution date and how much of that value is credited to the member’s capital account if the LLC is taxed as a partnership. For real estate, also see the Real Estate section of this audit.


 
 
 
PART 8 OF 16  ·  OPTIONAL

LLC Loans


For an LLC that has borrowed money or loaned money — especially to or from its own members.


 
Q41Is every loan to or from the LLC documented by a signed promissory note?TaskClick to openClick to close
The note should state the amount, repayment terms and interest rate, if any.
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKDocument Every Loan

The borrower must sign a promissory note and deliver it to the lender. Documenting loans between the LLC and its members is especially important for three reasons:


  1. It prevents the IRS from recharacterizing the loan as a capital contribution.
  2. It keeps a creditor from arguing the loan is really a capital contribution that gets repaid only after every creditor is paid.
  3. In a multi-member LLC, a signed note eliminates arguments over the loan’s terms.

Editable Promissory Note and Borrowing Resolution forms are available from our Keyt Forms website.


 
 
Q42Have the members approved every loan in a signed resolution?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKHave the Members Approve the Loans

If the Operating Agreement has loan-approval rules, follow them to the letter. Otherwise, approve every loan either (1) at a properly noticed members’ meeting where the required number of members votes yes, or (2) by a written resolution signed by the required number of members instead of a meeting.


An editable Borrowing Resolution is available from Keyt Forms.


 
 
Q43Is the LLC the lender on any loan that is in default?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKSend a Demand Letter

Send the borrower a demand for payment by certified mail, return receipt requested. If the borrower does not bring the loan current, the people managing the LLC may have a fiduciary duty to take legal action to collect.


 
 
 
PART 9 OF 16  ·  OPTIONAL

Multi-Member LLCs


For an LLC with two or more members who are not married to each other. Partners who agree today can disagree tomorrow.


 
Q44Have all members signed a Buy Sell Agreement?AlertClick to openClick to close
A Buy Sell Agreement is the members’ exit strategy if a member dies, becomes disabled, divorces, retires, breaches the Operating Agreement or wants out.
ANSWER CHOICES
Yes. All members signed a Buy Sell Agreement.
No. The members have no exit strategy in writing.
ALERTA Multi-Member LLC’s Most Important Document

Without a Buy Sell Agreement, the death of a member can leave you in business with the member’s spouse or children. Read Richard Keyt’s article on the Arizona LLC Buy Sell Agreement.


Fees: $1,294 if your LLC was formed within the last 90 days or KEYTLaw prepares your Operating Agreement at the same time; $1,994 for all other Arizona LLCs. Each fee includes up to one hour of attorney time for consultation and custom provisions. To hire us, complete our Buy Sell Agreement Questionnaire or call Richard Keyt at 480-664-7478 or Richard C. Keyt at 480-664-7472.


 
 
Q45Do the members hold meetings to approve major actions?AlertClick to openClick to close
Arizona law does not require member meetings, but we strongly recommend them for multi-member LLCs.
ANSWER CHOICES
Yes. Major actions are approved by member vote and documented.
No. Major decisions are made without a member vote.
ALERTMember Meetings Prevent Member Lawsuits

The most common cause of member disputes is the LLC taking action without the other members’ prior knowledge. Call a meeting to discuss every proposed major action, have the members vote and document the vote with minutes or a resolution signed by the members.


Editable minutes and resolutions forms are available from Keyt Forms.


 
 
 
PART 10 OF 16  ·  OPTIONAL

Newly Formed LLCs


For an LLC formed within the last year. These are the first steps after the ACC approves your Articles of Organization.


 
Q46Does the LLC have an Employer Identification Number (EIN)?TaskClick to openClick to close
ANSWER CHOICES
Yes. The LLC has an EIN from the IRS.
No. The LLC does not have an EIN.
TASKGet an EIN

Apply in minutes using the IRS’s online EIN application. Watch our tutorial video that walks through the IRS’s online process.


 
 
Q47Has the LLC opened a bank account in its own name?TaskClick to openClick to close
ANSWER CHOICES
Yes. The LLC has its own bank account.
No. The LLC does not have a bank account.
TASKOpen a Bank Account Now

If the LLC does not deposit its income into, and pay its expenses from, its own bank account, a court may “pierce the veil” and hold the members personally liable for the LLC’s debts. Never mix LLC money with personal money.


 
 
Q48Is the LLC using QuickBooks or another bookkeeping system?TaskClick to openClick to close
ANSWER CHOICES
Yes. The LLC keeps books.
No. The LLC does not yet keep books.
TASKSet Up the LLC’s Bookkeeping

Every LLC with income and expenses needs a real bookkeeping system. We have used QuickBooks for many years and recommend it. Most accountants will keep your books or help you set up QuickBooks for the LLC.


 
 
Q49Has a member consulted a CPA or tax advisor about how the LLC should be taxed?TaskClick to openClick to close
An LLC can be taxed as a disregarded entity (sole proprietorship), a partnership, a C corporation or an S corporation. Silver and Gold LLC clients will find a detailed discussion in the Arizona LLC Operations Manual.
ANSWER CHOICES
Yes. We have tax advice on the best method.
No. We have not talked to a tax advisor.
TASKMeet with a Tax Advisor — Soon

See a tax advisor as soon as possible after formation, and no later than 74 days after the formation date, for two reasons: (1) to set up the LLC’s books, and (2) to choose the best tax method. If S corporation taxation is recommended, the LLC must file IRS Form 2553 on time.


 
 
Q50Do you want the LLC taxed as an S corporation?AlertClick to openClick to close
ANSWER CHOICES
Yes, but we have not filed Form 2553.
We already filed Form 2553.
Not sure yet.
No.
ALERTThe S Corporation Election Deadline

To be taxed as an S corporation from day one, file IRS Form 2553 no later than two months and 15 days after the LLC’s formation date. See the Instructions for Form 2553. If you miss the deadline, your tax advisor may be able to request late-election relief. For later years, the election is generally due within the first two months and 15 days of the tax year in which it is to take effect.


 
 
 
PART 11 OF 16  ·  OPTIONAL

Real Estate LLCs


For an LLC that owns, or will own, Arizona real estate.


 
Q51Does the LLC own Arizona real estate?Click to openClick to close
ANSWER CHOICES
Yes. The LLC owns one or more Arizona properties.
Not yet, but it will soon.
 
Q52Was a deed to the LLC signed and recorded?TaskClick to openClick to close
ANSWER CHOICES
Yes. The deed was signed and recorded in the county where the property is located.
No. The current owner has not signed a deed to the LLC.
A deed was signed but not yet recorded.
Does not apply to my LLC
TASKGet a Signed Special Warranty Deed

Have the current owner sign a deed conveying the property to the LLC. Use a Special Warranty Deed, not a Quit Claim Deed — a Quit Claim Deed can end the title insurance coverage. To hire Richard Keyt to prepare a Special Warranty Deed for $295, complete our deed preparation questionnaire. If the property has a mortgage, read Does Transferring Land to LLC Trigger a Due on Sale Clause?


 
TASKRecord the Deed

An unrecorded deed leaves the LLC’s ownership off the public record and exposes the property to competing claims. Record the signed deed with the county recorder in the county where the property is located.


 
 
Q53Does the LLC have title insurance on its real estate?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKGet Title Insurance for the LLC

If a member conveyed the property to the LLC, contact the title company that issued the member’s owner’s policy and ask for an endorsement that names the LLC as an additional insured. The cost is usually modest.


 
 
Q54Has every tenant signed a written lease?TaskClick to openClick to close
Including any member or affiliated company that rents from the LLC.
ANSWER CHOICES
Yes. Every tenant signed a written lease.
No. At least one tenant has no written lease.
The LLC has no tenants.
TASKGet a Signed Lease from Every Tenant

Never let a tenant occupy LLC property without a signed lease. For residential property, an editable Arizona Residential Lease is available from Keyt Forms. For commercial property, call Richard Keyt at 480-664-7478.


 
 
Q55Were there tenants when the LLC acquired the property?Click to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
 
Q56Did the previous owner assign the existing leases to the LLC?TaskClick to openClick to close
Answer only if there were tenants when the LLC acquired the property.
ANSWER CHOICES
Yes. The previous owner signed an Assignment of Lease.
No.
Does not apply to my LLC
TASKGet a Signed Assignment of Lease

Because the LLC owns the property, it must be the landlord under every lease. The LLC becomes the landlord when the previous owner signs an Assignment of Lease transferring the landlord’s rights and obligations to the LLC.


 
 
Q57Did the LLC notify every tenant in writing of the new landlord?TaskClick to openClick to close
The notice should say the property was transferred to the LLC, the lease was assigned to the LLC and rent is now paid to the LLC.
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKNotify Tenants of the New Landlord

Send every tenant a written notice of the change of ownership. Tell the tenant who the new landlord is, to whom rent is paid and where to send it.


 
 
 
PART 12 OF 16  ·  OPTIONAL

Insurance Coverage


Insurance is your LLC’s first line of defense. It pays covered losses and pays the lawyers who defend the LLC. Review every policy type below with an experienced business insurance agent.


 
Q58General liability insuranceAlertClick to openClick to close
Does the LLC have general liability coverage?
ANSWER CHOICES
Yes
No
The LLC does not need it
ALERTGeneral Liability Insurance

Every business — even a home-based business — needs liability insurance. It pays defense costs and damages if the LLC, its employees, or its products or services cause, or are accused of causing, bodily injury or property damage to someone else.


 
 
Q59Property insuranceAlertClick to openClick to close
Does the LLC insure its buildings, equipment and inventory?
ANSWER CHOICES
Yes
No, but the LLC needs it
The LLC has no property to insure
ALERTProperty Insurance

If the LLC owns buildings or business personal property — computers, office equipment, inventory or tools — insure it against fire, theft, vandalism, smoke damage and other losses. Ask about adding business interruption coverage to the policy.


 
 
Q60Business owner’s policy (BOP)AlertClick to openClick to close
Has the LLC purchased a business owner’s policy?
ANSWER CHOICES
Yes
No, but the LLC operates a business
The LLC does not operate a business
ALERTBusiness Owner’s Policy

A BOP packages the coverage most small businesses need — typically liability, property and business interruption, with options such as vehicle and crime coverage — into one policy. A BOP usually costs less than buying each policy separately.


 
 
Q61Commercial auto insuranceAlertClick to openClick to close
Does the LLC have commercial auto coverage?
ANSWER CHOICES
Yes
No, but the LLC needs it
The LLC does not need it
ALERTCommercial Auto Insurance

Commercial auto insurance covers the LLC’s cars, SUVs, vans and trucks. If employees drive their own cars on company business, the LLC should carry non-owned auto liability coverage in case the employee’s insurance is missing or inadequate. Non-owned coverage can often be added to a BOP.


 
 
Q62Umbrella insuranceAlertClick to openClick to close
Does the LLC have umbrella coverage?
ANSWER CHOICES
Yes
No
The LLC does not want it
ALERTUmbrella Insurance

We recommend at least $1,000,000 of umbrella coverage. Additional coverage in $1,000,000 increments up to $5,000,000 is often relatively inexpensive. Ask your agent to price several amounts.


 
 
Q63Professional liability (errors & omissions) insuranceAlertClick to openClick to close
Does the LLC provide professional services, and is it insured?
ANSWER CHOICES
Yes. The LLC provides services and is insured.
The LLC provides services but is not insured.
The LLC does not provide professional services.
ALERTProfessional Liability Insurance

Professional liability, also called errors and omissions insurance, pays defense costs and damages for failing to render, or improperly rendering, professional services. A general liability policy does not cover these claims. Lawyers, accountants, consultants, notaries, real estate and insurance agents, salons and technology providers all need it.


 
 
Q64Directors & officers (D&O) insuranceAlertClick to openClick to close
Has the LLC purchased D&O coverage?
ANSWER CHOICES
Yes
No, but the LLC should have it
The LLC does not need it
ALERTDirectors & Officers Insurance

D&O insurance protects the people who manage the company if they are sued over decisions that affect the company’s profitability or operations. It pays defense costs and damages resulting from covered lawsuits.


 
 
Q65Data breach (cyber) insuranceAlertClick to openClick to close
Does the LLC store customer, client or employee information?
ANSWER CHOICES
Yes, and the LLC has data breach insurance
Yes, but the LLC has no data breach insurance
The LLC stores no such data
ALERTData Breach Insurance

Any LLC that stores sensitive or non-public information about employees or clients — digitally or on paper — is responsible for protecting it. Data breach insurance covers losses from a breach. Warning: under A.R.S. §18-552, Arizona can impose civil penalties of up to $500,000 on a business that suffers a breach and fails to follow the law’s notice requirements.


 
 
Q66Business interruption insuranceAlertClick to openClick to close
Has the LLC purchased business interruption coverage?
ANSWER CHOICES
Yes
No, but the LLC needs it
The LLC does not need it
ALERTBusiness Interruption Insurance

If a fire, flood or other catastrophe shuts down your location, business interruption insurance replaces lost income while you can’t operate. It is especially important if your LLC needs a physical location to do business.


 
 
Q67Products liability insuranceAlertClick to openClick to close
Does the LLC make or sell products?
ANSWER CHOICES
Yes, and the LLC has products liability insurance
Yes, but the LLC has no products liability insurance
The LLC does not make or sell products
ALERTProducts Liability Insurance

If your LLC manufactures or sells products, products liability insurance is a must. Even a careful business can be sued over injuries caused by its products. Coverage can be tailored to your specific products.


 
 
 
PART 13 OF 16  ·  OPTIONAL

LLCs with Employees


For an LLC that has, or will have, an employee. Employers have obligations that start on the employee’s first day.


 
Q68Has the LLC reported its new hires to the State of Arizona?AlertClick to openClick to close
ANSWER CHOICES
Yes. Every new hire was reported.
No. The LLC has not reported its new hires.
ALERTNew Hire Reporting

A.R.S. §23-722.01 requires every employer doing business in Arizona to report new hires, rehires and employees returning to work within 20 days. Report every employee who lives or works in Arizona, even one who worked only a day.


Report online through the Arizona New Hire Reporting Center, or let a payroll service or your CPA handle it.


If you employ Arizona employees, read our article Arizona Employment Law, which includes links to the posters Arizona employers must display.


 
 
Q69Does the LLC have workers’ compensation insurance?AlertClick to openClick to close
ANSWER CHOICES
Yes
No
ALERTWorkers’ Compensation Is Mandatory

Arizona requires employers to provide workers’ compensation coverage for their employees. Knowingly failing to comply with Arizona’s workers’ compensation law can be a class 6 felony under A.R.S. §23-932.


Workers’ compensation is a no-fault system: an employee injured on the job receives medical and wage benefits no matter who caused the accident. Buy coverage from an insurer licensed in Arizona. For more information see the Industrial Commission of Arizona and the Arizona Department of Insurance and Financial Institutions.


 
 
Q70Does any employee need a written employment agreement?AlertClick to openClick to close
ANSWER CHOICES
Yes. At least one employee should sign an employment agreement.
No.
ALERTEmployment Agreements

Employers are frequent lawsuit targets, and employees with a signed agreement that spells out the terms of employment are less likely to sue. Any manager who is employed by the LLC should always sign an employment agreement.


For an employment agreement, call Richard C. Keyt at 480-664-7472 or email rck@keytlaw.com.


 
 
 
PART 14 OF 16  ·  OPTIONAL

LLCs with Independent Contractors


For an LLC that pays independent contractors. Calling a worker a contractor doesn’t make it so.


 
ALERTIndependent Contractor or Employee?

Courts decide on a case-by-case basis, looking at the totality of the facts: how long the relationship lasts, how the worker is paid, who can hire and fire, how much control the company has over the work, who supplies the tools, who sets the hours, and whether the work is part of the company’s regular business. No single factor decides the question.


Warning: misclassifying an employee as an independent contractor can be a very expensive mistake — back taxes, penalties and claims for employee benefits.


 
Q71Has every independent contractor signed an Independent Contractor Agreement?AlertClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
ALERTGet a Signed Independent Contractor Agreement

Without a written agreement, a court and the IRS are more likely to treat the worker as an employee. The agreement should spell out the contractor’s duties and state that the contractor is responsible for all income and employment taxes on what the contractor earns.


For an Independent Contractor Agreement, call Richard C. Keyt at 480-664-7472 or email rck@keytlaw.com.


 
 
 
PART 15 OF 16  ·  OPTIONAL

Arizona Sales Tax (Transaction Privilege Tax)


For an LLC engaged in retail sales, restaurants and bars, hotels and short-term lodging, commercial leasing, residential rentals where taxed, amusements, personal property rentals, contracting, mining, transporting, job printing, publishing, utilities, communications or private rail cars.


 
ALERTHow Arizona’s Transaction Privilege Tax Works

Arizona’s “sales tax” is technically a transaction privilege tax (TPT) imposed on the seller for the privilege of doing business in Arizona, although the seller usually passes it on to the customer. Businesses engaged in taxable activities must be licensed before they start.


Since 2017 the Arizona Department of Revenue (ADOR) has been the single point of licensing, filing and payment for state, county and city TPT. One TPT license, applied for at AZTaxes.gov, covers the state, county and every Arizona city where the LLC does business. A business with several locations can license each one separately or use one consolidated license. Licenses are renewed every year. See the ADOR’s TPT page for details.


 
Q72Does the LLC have a TPT license from the Arizona Department of Revenue?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKGet a TPT License Before You Sell

Apply online at AZTaxes.gov using the Arizona Joint Tax Application (JT-1). The license number is usually issued the same day. Learn more on the ADOR’s TPT License page.


 
 
Q73Does the TPT license cover every location and every city where the LLC does business?TaskClick to openClick to close
ANSWER CHOICES
Yes
No
I’m not sure
Does not apply to my LLC
TASKAdd Every Location and City to Your License

Log in to AZTaxes.gov and add any missing business location, city or business activity code to the LLC’s license. Reporting under the wrong city code means the right city never receives its tax — and the LLC remains liable for it.


 
 
Q74Has the LLC checked whether its city requires a separate business license?TaskClick to openClick to close
A city business or occupational license is different from TPT.
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKCheck City Business License Requirements

ADOR handles city TPT, but many Arizona cities also require their own business, occupational or regulatory licenses or permits. Contact each city where the LLC does business. If the LLC operates in an unincorporated area, check with the county.


 
 
 
PART 16 OF 16  ·  OPTIONAL

Intellectual Property


For an LLC with a trademark, service mark, copyrightable work, domain name or website.


 
ALERTTrademarks, Copyrights and Patents

A trademark is a word, phrase, symbol or design (or a combination) that identifies the source of goods. A service mark does the same for services. Trademarks protect brand names and logos; copyrights protect original artistic and literary works; patents protect inventions.


 
Q75Does the LLC have a trademark or service mark?Click to openClick to close
ANSWER CHOICES
Yes
No
 
Q76Has the LLC registered its marks with the U.S. Patent and Trademark Office?TaskClick to openClick to close
Answer only if the LLC has a mark.
ANSWER CHOICES
Yes
No
Does not apply to my LLC
TASKRegister Your Trademarks

Federal registration with the U.S. Patent and Trademark Office gives the LLC nationwide rights and the ability to use the ® symbol. If you need a trademark or patent lawyer send an email to Richard Keyt at rk@keytlaw.com and he will reply with his recommendation.


 
 
 
ALERTClients Retake the Audit Every Six Months

Your LLC changes over time — new members, new properties, new employees, new loans. We recommend that our clients retake the audit every six months, and never less than once a year, to make sure every base stays covered.


 

Frequently Asked Questions


Who gets the Arizona LLC Legal Audit?


Clients who hire KEYTLaw to form an Arizona LLC with our Silver or Gold LLC package. See the contents of our Bronze, Silver & Gold LLC packages.


How often should I audit my Arizona LLC?


Every six months, and never less than once a year. Also run the audit whenever something important changes, such as adding a member, buying real estate, hiring an employee or borrowing money.


Does an Arizona LLC have to file an annual report?


No. Arizona does not require LLCs to file an annual report with the Arizona Corporation Commission. That makes it easy to forget the LLC’s public record. Check the ACC’s website at least once a year to confirm the LLC is in good standing and its information is current.


Does every newly formed Arizona LLC have to publish a notice in a newspaper?


No. Publication is required only if the statutory agent’s street address is outside Maricopa and Pima Counties. Those LLCs must publish a notice three consecutive times in a newspaper of general circulation in the agent’s county within 60 days after the ACC approves the Articles of Organization. See A.R.S. §29-3201.


Does a single-member LLC need an Operating Agreement?


Arizona LLC law does not require an LLC to have an Operating Agreement, but we highly recommend that all LLCs (including single member LLCs) have a custom Operating Agreement. Arizona’s LLC Act contains default rules that apply to every LLC unless a signed Operating Agreement changes them. Third parties such as banks, lenders, title insurance companies and a party to a contract with the LLC frequently ask to see a copy of the LLC’s Operating Agreement because they want proof of who owns the LLC and who has the power to act on behalf of the LLC.


What records must an Arizona LLC keep?


Under A.R.S. §29-3410, a current list of members and managers with their addresses, the Articles of Organization and amendments, all current and prior Operating Agreements and amendments, records of any member’s obligation to contribute capital, and the last three years of tax returns and financial statements, if any.


Can KEYTLaw fix the problems the audit uncovers?


Yes. We prepare Operating Agreements, amendments, Buy Sell Agreements, deeds, estate plans and ACC filings, and we serve as statutory agent. Call 480-664-7478, email rk@keytlaw.com or book a free consultation by office, phone or Zoom video.


 

Let Experienced Arizona LLC Attorneys Help


Arizona LLC attorneys Richard Keyt and his son, attorney and former CPA Richard C. Keyt, have formed 10,000+ Arizona LLCs. We built this audit from the mistakes we have seen, and we include it with every Silver and Gold LLC we form.


See the contents of our Bronze, Silver & Gold LLC packages.


To hire us to form an LLC submit our online questionnaire at keytlaw.com/llcq, call 480-664-7478 or email rk@keytlaw.com. Prefer to talk first? Book a free consultation by office, phone or Zoom video, or explore our Arizona LLC Center.


 

This preview provides general information about Arizona LLC law and is not legal advice. Reading it does not create an attorney-client relationship. Copyright © 2026 Richard Keyt. All rights reserved.


Created November 11, 2026, by Richard Keyt, Arizona attorney

Call, email or text Richard Keyt, father

Direct phone: 480-664-7478

Email: rk@keytlaw.com

Call, email or text Richard C. Keyt, son

Direct phone: 480-664-7472

Email: rck@keytlaw.com