Should My Arizona LLC Adopt an Operating Agreement Drafted for the New LLC Act?

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 6,200+ 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 13.1ALLCA Provisions that Are Deleted & Not Applicable to this Company
Section 13.2Definitions
Section 13.3Company’s Principal Address After August 31, 2020
Section 13.4Operating Agreement Can Modify the Act
Section 13.5Members Who Do Not Sign This Agreement
Section 13.6Liability for Inaccurate Information in Records Filed with the ACC
Section 13.7Agency Power of a Member
Section 13.8Agency Power of a Manager
Section 13.9Liability of Members
Section 13.10Liability of Managers
Section 13.11How a Person Becomes a Member
Section 13.12Termination of Joint Tenancy & Community Property with Right of Survivorship
Section 13.13Liability for Capital Contributions
Section 13.14Sharing of and Right to Distributions before Dissolution
Section 13.15Limitations on Distributions
Section 13.16Liability for Improper Distributions
Section 13.17Management of the Company When It is Member Managed
Section 13.18Management of the Company When It is Manager Managed
Section 13.19Reimbursement; Indemnification; Advancement; Insurance
Section 13.20Standards of Conduct for Members When the Company is Member Managed
Section 13.21Standards of Conduct for Managers When the Company is Manager Managed
Section 13.22Records to be Kept; Rights to Information and Records of Members & Managers
Section 13.23Charging Order
Section 13.24Wrongful Dissociation
Section 13.25Events Causing Dissociation
Section 13.26Effect of Dissociation
Section 13.27Direct Action by Member
Section 13.28Derivative Action

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How to Hire Richard Keyt to Prepare an ALLCA Compliant Operating Agreement

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.

Two ways to get an ALLCA compliant Operating Agreement:

  1. Hire me to form a new Arizona LLC, or
  2. If you have an existing Arizona LLC, hire me to prepare an Operating Agreement for the LLC.

Option 1 Form a New LLC: To hire me, Arizona LLC attorney Richard Keyt (6,200+ LLCs formed and 138 five star Google & Facebook reviews), to form your new LLC complete our online LLC formation questionnaire or call me at 480-664-7478 and give me your information. Your LLC will be formed the first Wednesday or Friday after we are hired.  See the “Contents of the Bronze ($397), Silver ($597) & Gold ($997) LLC Packages.

Option 2 Purchase an Operating Agreement:  If you have an existing Arizona LLC and want to upgrade to a new ALLCA compliant Operating Agreement complete our online Operating Agreement questionnaire.

2018-05-06T15:13:01+00:00May 6th, 2018|New Arizona LLC Act|0 Comments

About the Author:

The author of this article is Richard Keyt, an Arizona limited liability company attorney who has formed 6,000+ LLCs. His Silver & Gold LLC packages include the $85 expedited filing fee, a custom Operating Agreement and 170 ebook called the Arizona LLC Operations Manual. Connect with Richard at 480-664-7478 or on Google+