ARS Section 29-657 Liability for False Statement in Articles; Definition

ARS Section 29-657 Liability for False Statement in Articles; Definition 2017-02-25T05:49:53+00:00

A. If any articles of organization, articles of merger or articles of termination contain any false statement, a person, including a member of a limited liability company, who suffers loss by relying on the false statement may recover damages for the loss from the limited liability company and from:

1. Any person who executes the articles, or causes another to execute the articles on his behalf, and knew or reasonably should have known, and any responsible person who knew or reasonably should have known, the statement to be false at the time the articles were executed.

2. Any responsible person who knows or reasonably should have known that any arrangement or other fact described in the articles has changed, making the statement inaccurate in any respect within a sufficient time before the statement was relied upon reasonably to have enabled that responsible person to amend the articles.

B. For purposes of this section, “responsible person” means a manager of a limited liability company in which management is vested in a manager or managers and a member of a limited liability company in which management is reserved to the members.

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.