ARS Section 29-654 Member or Manager as Agent

ARS Section 29-654 Member or Manager as Agent 2016-11-16T08:23:24+00:00

A. Unless the articles of organization of a limited liability company provide that management is vested in one or more managers:

1. Each member is an agent of the limited liability company for the purpose of carrying on its business in the usual way.

2. The act of each member, including the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the business of the limited liability company of which he is a member binds the limited liability company unless the acting member has in fact no authority to act for the limited liability company in the particular matter and the person with whom he is dealing has knowledge of the fact that the member has no such authority.

B. If the articles of organization of a limited liability company provide that management is vested in one or more managers:

1. A member is not an agent of the limited liability company for the purpose of its business solely by reason of being a member except to the extent that authority has been delegated to the member by the sole manager or managers or by the provisions of an operating agreement.

2. Each manager is an agent of the limited liability company for the purpose of carrying on its business in the usual way.

3. The act of each manager, including the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the business of the limited liability company of which he is a manager binds the limited liability company unless the acting manager has in fact no authority to act for the limited liability company in the particular matter and the person with whom he is dealing has knowledge of the fact that the manager has no such authority.

C. An act of a member or manager that is not apparently for carrying on the business of the limited liability company in the usual way does not bind the limited liability company unless authorized in fact by the limited liability company in the particular matter.

D. An act of any member, manager, employee, officer or other agent of a limited liability company in violation of a restriction on authority does not bind the limited liability company to persons with knowledge of the restriction.

Caution:  The above language was taken from Arizona’s statutes on November 12, 2016.  Check the Arizona legislature’s website to determine if this statute changed after November 12, 2016.