Recently somebody for whom I formed an Arizona LLC asked me if Arizona’s new LLC act (ALLCA) that is effective 9/1/19 for LLCs formed after 8/31/19 and all Arizona LLCs after 8/31/20 will require Arizona LLCs to adopt an Operating Agreement that contains language that makes the agreement compatible with ALLCA. The short answer is no. ALLCA does not require an Arizona LLC to have an Operating Agreement or amend existing Operating Agreements.
As an Arizona LLC attorney who has formed 8,900+ LLCs my answer to the question, even though ALLCA does not require an Arizona LLC to have an ALLCA complaint Operating Agreement is that all Arizona LLCs should have an ALLCA compliant Operating Agreement because it would be extremely foolish and potentially a costly mistake for an Arizona LLC to fail to have an ALLCA compliant Operating Agreement.
I recommend that all Arizona LLCs adopt an Operating Agreement that contains provisions derived from or based on the statutory provisions contained in ALLCA. Because all of Arizona’s existing LLC statutes will be completely eliminated and replaced by the new ALLCA, all Arizona LLCs need an ALLCA compliant Operating Agreement. To me it is a no brainer.
New Arizona LLC law means all Arizona LLCs need an Operating Agreement drafted for the new law. If you are thinking of forming a new Arizona LLC and will not get an ALLCA compliant Operating Agreement, ask yourself WHY? Don’t you want an agreement drafted for Arizona’s new LLC law now? Your new Arizona LLC’s Operating Agreement should be ALLCA compliant now so you don’t have to modify the Operating Agreement before September 1, 2020, to make it compliant with Arizona’s new LLC law.
ALLCA Compliant Operating Agreement
What do I mean by an ALLCA compliant Operating Agreement? I mean an Operating Agreement that has been drafted by an experienced Arizona LLC attorney like me who has studied ALLCA and who has written provisions for the Operating Agreement that take into consideration statutory provisions in the new law.
I invested a lot of time reading and studying Arizona’s new LLC law because I know that all existing and future Arizona LLCs need an Operating Agreement that is drafted specifically for Arizona’s new ALLCA. My ALLCA compliant Operating Agreements contains 17 pages of new text that addresses Arizona’s new LLC law.
New ALLCA Sections Added to My Operating Agreement
Below is the table of contents for Article 13 of my ALLCA compliant Arizona LLC Operating Agreements. The table shows the titles of the 28 sections of new provisions in Article 13 that constitute 17 pages of text in my ALLCA compliant Operating Agreement. A quick review of the 28 new sections I added to my Operating Agreements to make them ALLCA compliant will show you that the new ALLCA has a lot of provisions that affect Arizona LLCs that all Arizona LLCs need to address.
Article 13 Arizona LLC Act Provisions
|Section 13.1||ALLCA Provisions that Are Deleted & Not Applicable to this Company|
|Section 13.3||Company’s Principal Address After August 31, 2020|
|Section 13.4||Operating Agreement Can Modify the Act|
|Section 13.5||Members Who Do Not Sign This Agreement|
|Section 13.6||Liability for Inaccurate Information in Records Filed with the ACC|
|Section 13.7||Agency Power of a Member|
|Section 13.8||Agency Power of a Manager|
|Section 13.9||Liability of Members|
|Section 13.10||Liability of Managers|
|Section 13.11||How a Person Becomes a Member|
|Section 13.12||Termination of Joint Tenancy & Community Property with Right of Survivorship|
|Section 13.13||Liability for Capital Contributions|
|Section 13.14||Sharing of and Right to Distributions before Dissolution|
|Section 13.15||Limitations on Distributions|
|Section 13.16||Liability for Improper Distributions|
|Section 13.17||Management of the Company When It is Member Managed|
|Section 13.18||Management of the Company When It is Manager Managed|
|Section 13.19||Reimbursement; Indemnification; Advancement; Insurance|
|Section 13.20||Standards of Conduct for Members When the Company is Member Managed|
|Section 13.21||Standards of Conduct for Managers When the Company is Manager Managed|
|Section 13.22||Records to be Kept; Rights to Information and Records of Members & Managers|
|Section 13.23||Charging Order|
|Section 13.24||Wrongful Dissociation|
|Section 13.25||Events Causing Dissociation|
|Section 13.26||Effect of Dissociation|
|Section 13.27||Direct Action by Member|
|Section 13.28||Derivative Action|
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How to Hire Richard Keyt to Prepare a Custom Operating Agreement
Option 1: Form a New LLC with a Custom Operating Agreement: When you hire me, Arizona LLC attorney Richard Keyt who has formed 8,900+ and has 349 five star Google & Facebook reviews), to form a new LLC I will prepare a custom Operating Agreement. Complete our online LLC formation questionnaire or call me at 480-664-7478 and give me your information. We form new LLCs and get them approved by the Arizona Corporation Commission the same day we are paid and you approve the LLC formation questionnaire you submit to us. See the “contents of the Bronze ($497), Silver ($797) & Gold ($1,297) LLC packages.
Option 2: Purchase a Custom Operating Agreement: If your Arizona LLC's Operating Agreement was drafted for the obsolete Arizona LLC law or if it doesn't have an Operating Agreement its members should hire us to draft a custom Operating Agreement by submitting our online Operating Agreement questionnaire.