1.0Arizona LLC Lawhttps://www.keytlaw.com/azllclawRichard Keythttps://www.keytlaw.com/azllclaw/author/1llclawyer/rich600338<blockquote class="wp-embedded-content" data-secret="wSdBvJpNXA"><a href="https://www.keytlaw.com/azllclaw/2018/03/sb-1353/">Proposed New Arizona LLC Act SB 1353 is Amended</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www.keytlaw.com/azllclaw/2018/03/sb-1353/embed/#?secret=wSdBvJpNXA" width="600" height="338" title="“Proposed New Arizona LLC Act SB 1353 is Amended” — Arizona LLC Law" data-secret="wSdBvJpNXA" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script type="text/javascript"> /* <![CDATA[ */ /*! This file is auto-generated */ !function(d,l){"use strict";l.querySelector&&d.addEventListener&&"undefined"!=typeof URL&&(d.wp=d.wp||{},d.wp.receiveEmbedMessage||(d.wp.receiveEmbedMessage=function(e){var t=e.data;if((t||t.secret||t.message||t.value)&&!/[^a-zA-Z0-9]/.test(t.secret)){for(var s,r,n,a=l.querySelectorAll('iframe[data-secret="'+t.secret+'"]'),o=l.querySelectorAll('blockquote[data-secret="'+t.secret+'"]'),c=new RegExp("^https?:$","i"),i=0;i<o.length;i++)o[i].style.display="none";for(i=0;i<a.length;i++)s=a[i],e.source===s.contentWindow&&(s.removeAttribute("style"),"height"===t.message?(1e3<(r=parseInt(t.value,10))?r=1e3:~~r<200&&(r=200),s.height=r):"link"===t.message&&(r=new URL(s.getAttribute("src")),n=new URL(t.value),c.test(n.protocol))&&n.host===r.host&&l.activeElement===s&&(d.top.location.href=t.value))}},d.addEventListener("message",d.wp.receiveEmbedMessage,!1),l.addEventListener("DOMContentLoaded",function(){for(var e,t,s=l.querySelectorAll("iframe.wp-embedded-content"),r=0;r<s.length;r++)(t=(e=s[r]).getAttribute("data-secret"))||(t=Math.random().toString(36).substring(2,12),e.src+="#?secret="+t,e.setAttribute("data-secret",t)),e.contentWindow.postMessage({message:"ready",secret:t},"*")},!1)))}(window,document); //# sourceURL=https://www.keytlaw.com/azllclaw/wp-includes/js/wp-embed.min.js /* ]]> */ </script> The Arizona legislature revised the text of proposed SB 1353, the law that if enacted will replace Arizona’s existing limited liability company law that took effect in 1992.  The red lined version of the proposed law is show below. I oppose the proposed law.  If SB 1353 becomes law it will have the following consequences: Instead of being a state that has “good” LLC law, Arizona will become a state that has “bad” LLC law. The new law will cause Arizona’s limited liability company act to be nicknamed the Arizona liability company act because it creates many new obligations and liabilities on members and managers that will be the basis for lawsuits not possible under existing Arizona LLC law.  For example, new Section 29-409.B.4 states: “The fiduciary duty of loyalty of a member . . . includes the following duties: . . . . To disclose to each of the other members that are considering or voting on a decision or transaction regarding the company or one or more of the members’ interests in the company both of the following: (a) Any material conflict of interest on the part of the disclosing member with respect to the decision or transaction; and. (b) If a material conflict of interest exists, All material facts relating to the decision or transaction that are within the disclosing member’s knowledge and not known or reasonably available to the affected members.”  This statute will be a litigator’s dream because few members who vote on an issue will prepare a written disclosure document and give it to the other members.  A written disclosure document is the only way a member can prove that the member disclosed all material facts. Knowledgeable people will [...]