{"version":"1.0","provider_name":"Arizona LLC Law","provider_url":"https:\/\/www.keytlaw.com\/azllclaw","author_name":"Richard Keyt","author_url":"https:\/\/www.keytlaw.com\/azllclaw\/author\/1llclawyer\/","title":"New LLC Law Warning: Beware of Baffling Section 29-3407.B","type":"rich","width":600,"height":338,"html":"<blockquote class=\"wp-embedded-content\" data-secret=\"rWdvbatlYy\"><a href=\"https:\/\/www.keytlaw.com\/azllclaw\/2018\/05\/act-29-3407-b\/\">New LLC Law Warning: Beware of Baffling Section 29-3407.B<\/a><\/blockquote><iframe sandbox=\"allow-scripts\" security=\"restricted\" src=\"https:\/\/www.keytlaw.com\/azllclaw\/2018\/05\/act-29-3407-b\/embed\/#?secret=rWdvbatlYy\" width=\"600\" height=\"338\" title=\"&#8220;New LLC Law Warning: Beware of Baffling Section 29-3407.B&#8221; &#8212; Arizona LLC Law\" data-secret=\"rWdvbatlYy\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" class=\"wp-embedded-content\"><\/iframe><script type=\"text\/javascript\">\n\/* <![CDATA[ *\/\n\/*! This file is auto-generated *\/\n!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);\n\/\/# sourceURL=https:\/\/www.keytlaw.com\/azllclaw\/wp-includes\/js\/wp-embed.min.js\n\/* ]]> *\/\n<\/script>\n","description":"Why LLCs Must Have an ALLCA Compliant Operating Agreement: Reason #4 Your Arizona LLC needs an Operating Agreement that eliminates or clarifies new Arizona Revised Statutes Section 29-3407.B that is effective September 1, 2019.\u00a0 This statute applies to member managed LLCs and states: In a member-managed limited liability company, the following apply: 1. . . . the management and conduct of the company are vested in the members. 2. within the ordinary course of the company&#8217;s activities and affairs, each member has the right to manage and conduct the company&#8217;s activities and affairs. 3. . . . a majority in interest of the members shall decide any of the following: (a) matters that are outside the ordinary course of the company&#8217;s activities and affairs but within the company&#8217;s purpose. (b) matters on which there exists a known difference among members. (c) whether to make an interim distribution before dissolution and winding up. (d) whether to make an advance to a member or manager under Section 29-3408.C. The first thing to know about this statute is that without an Operating Agreement that defines how members vote, a majority in interest of the members is determined by counting the number of members (husband and wife are two members) then asking what number is a majority of the total number of members?\u00a0 See New LLC Law Warning: Beware of Section 29-3404.A, which explains the new law&#8217;s definition of majority in interest.\u00a0 For example, if an Arizona LLC has two members, Homer who owns 90% and Ned &amp; Molly, a married couple, who own 10%, Section 29.3404.A provides that there there are three members so Ned and Molly&#8217;s two votes overrule Homer&#8217;s one vote. Subsection 3 of\u00a0Section 29-3407.B creates [...]"}