1.0Arizona LLC Lawhttps://www.keytlaw.com/azllclawRichard Keythttps://www.keytlaw.com/azllclaw/author/1llclawyer/rich600338<blockquote class="wp-embedded-content" data-secret="oecwsaH7rD"><a href="https://www.keytlaw.com/azllclaw/2018/05/vote/">New Arizona LLC Law Nightmare: Vote at Member Meeting & Get Sued for Failing to Disclose Conflict of Interest</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www.keytlaw.com/azllclaw/2018/05/vote/embed/#?secret=oecwsaH7rD" width="600" height="338" title="“New Arizona LLC Law Nightmare: Vote at Member Meeting & Get Sued for Failing to Disclose Conflict of Interest” — Arizona LLC Law" data-secret="oecwsaH7rD" 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> Why LLCs Must Have an ALLCA Compliant Operating Agreement: Reason #5 New Arizona Limited Liability Company Act (ALLCA) effective September 1, 2019, creates many new grounds for members of Arizona LLCs to sue each other and their company.  I call the new law the Arizona liability company because its creates so many new grounds that members can use to sue each other. New Arizona Revised Statutes Section 29-3409.B.4 is the new law that for the first time gives a member of an Arizona LLC grounds to sue one or more other members as a result of a vote by the members to cause the company to engage in an action or refrain from engaging in an action. Section 29-3409.B.4 states: B. The fiduciary duty of loyalty of a member in a member-managed limited liability company includes the following duties: 4. 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. (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. The problem for members of Arizona LLCs under ALLCA is that Section 29-3409.B.4 for the first time creates liability for a member of an Arizona LLC who votes on an issue and fails to disclose that the member has a conflict of interest. When Does a Conflict of Interest Exist? The big problem is that the [...]