{"id":12094,"date":"2019-09-01T20:27:09","date_gmt":"2019-09-02T03:27:09","guid":{"rendered":"https:\/\/www.keytlaw.com\/azllclaw\/?p=12094"},"modified":"2020-10-17T10:41:08","modified_gmt":"2020-10-17T17:41:08","slug":"llclaw","status":"publish","type":"post","link":"https:\/\/www.keytlaw.com\/azllclaw\/2019\/09\/llclaw\/","title":{"rendered":"Arizona&#8217;s New LLC Law Is Now Effective (9\/1\/19)"},"content":{"rendered":"<p style=\"text-align: justify;\">Today, September 1, 2019, is the day that Arizona&#8217;s new LLC law replaces entirely the LLC law that was adopted in 1992.\u00a0 \u00a0I&#8217;ve <a href=\"https:\/\/www.keytlaw.com\/azllclaw\/new-law\/\" target=\"_blank\" rel=\"noopener noreferrer\">written extensively<\/a> about the new law.\u00a0 I think it sucks for two reasons:<\/p>\n<ul>\n<li style=\"text-align: justify;\">It replaced a law that was not broken and did not need to be replaced.<\/li>\n<\/ul>\n<ul>\n<li style=\"text-align: justify;\">It replaces Arizona&#8217;s <em><strong>limited liability company act<\/strong><\/em> with what I call the <span style=\"color: #ff0000;\"><strong>liability company act<\/strong><\/span> because the new law creates many new ways that members and managers of an Arizona LLC can be sued.<\/li>\n<\/ul>\n<p><strong>One Example of a New Way a Member of an Arizona LLC Can be Sued<\/strong><\/p>\n<p style=\"text-align: justify;\">New Arizona Revised Statutes\u00a0<a href=\"https:\/\/www.keytlaw.com\/azllclaw\/ars-section-29-3409\/\" target=\"_blank\" rel=\"noopener noreferrer\">Section 29-3409.B.4<\/a> gives a member of an Arizona LLC the right to sue another member as a result of a the members&#8217; vote on a company matter.\u00a0 <a href=\"https:\/\/www.keytlaw.com\/azllclaw\/ars-section-29-3409\/\" target=\"_blank\" rel=\"noopener noreferrer\">Section 29-3409.B.4<\/a>\u00a0states:<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">B. The <strong>fiduciary duty of loyalty<\/strong>\u00a0of a member in a member-managed limited liability company includes the following duties:<\/p>\n<p style=\"text-align: justify; padding-left: 40px;\">4. to\u00a0<strong>disclose to each of the other members that are considering or voting on a decision or transaction regarding the company<\/strong>\u00a0or one or more of the members\u2019 interests in the company both of the following:<\/p>\n<p style=\"text-align: justify; padding-left: 80px;\">(a)\u00a0<strong>any material conflict of interest<\/strong>\u00a0on the part of the disclosing member with respect to the decision or transaction.<\/p>\n<p style=\"padding-left: 80px; text-align: justify;\">(b) if a material conflict of interest exists,\u00a0<strong>all material facts relating to the decision or transaction that are within the disclosing member\u2019s knowledge and not known or reasonably available to the affected members<\/strong>.<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">Fortunately most of the liability creating provisions in the new LLC act can be eliminated or minimized by a well drafted Operating Agreement signed by all of the members.<\/p>\n<p><strong>What You Need to Know About Arizona&#8217;s New LLC Act<\/strong><\/p>\n<p style=\"text-align: justify;\">The good news is that new LLC act does not significantly affect single member LLCs or PLLCs or companies that are owned by a married couple because the single member won&#8217;t sue himself or herself and the married couple won&#8217;t sue themselves.\u00a0 The new LLC act has major negative consequences to multi-member LLCs and PLLCs other than those owned solely by a married couple.<\/p>\n<p><strong>Bottom Line<\/strong><\/p>\n<p style=\"text-align: justify;\">All multi-member Arizona LLCs and PLLCs <del>should<\/del> must have an Operating Agreement that is written to eliminate or minimize some or all of the liability creating provisions in the new LLC act.<\/p>\n<p><strong>Effective Date of the New Law<\/strong><\/p>\n<p style=\"text-align: justify;\">Arizona&#8217;s new LLC law applies to all Arizona LLCs and PLLCs created on or after September 1, 2019.\u00a0 Prior Arizona LLC law applies to all Arizona LLCs and PLLCs created before September 1, 2019, but the new law will apply beginning of September 1, 2020.<\/p>\n<p><strong>My Three Types of Operating Agreements<\/strong><\/p>\n<p style=\"text-align: justify;\">I give people a choice between three different Operating Agreements unlike almost all other Operating Agreement preparers who offer a one size fits all Operating Agreement. My three types of Operating Agreements are:<\/p>\n<ul>\n<li style=\"text-align: justify;\"><strong>$$297 <\/strong>for a one member LLC or an LLC owned solely by a married couple.<\/li>\n<\/ul>\n<ul>\n<li style=\"text-align: justify;\"><strong>$$797 <\/strong>for multi-member LLCs other than an LLC owned solely by a married couple.<\/li>\n<\/ul>\n<p><strong>How to Purchase an Operating Agreement for an Arizona LLC<\/strong><\/p>\n<p style=\"text-align: justify;\">To hire us to prepare an Operating Agreement for your Arizona LLC complete and submit our online <a href=\"https:\/\/www.azllcoa.llc\/q\" target=\"_blank\" rel=\"noopener noreferrer\">Operating Agreement questionnaire<\/a>.\u00a0 You may also call me, Arizona LLC attorney <a href=\"http:\/\/www.keytlaw.com\/attorneys-staff\/richard-keyt\/\" target=\"_blank\" rel=\"noopener noreferrer\">Richard Keyt<\/a> (480-664-7478) or my son Arizona LLC attorney and former CPA <a href=\"http:\/\/www.keytlaw.com\/attorneys-staff\/richard-c-keyt\" target=\"_blank\" rel=\"noopener noreferrer\">Richard C. Keyt<\/a> (480-664-7472) if you have questions (we don&#8217;t charge to answer) and give us your LLC information over the phone.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today, September 1, 2019, is the day that Arizona&#8217;s new LLC law replaces entirely the LLC law that was adopted in 1992.\u00a0 \u00a0I&#8217;ve written extensively about the new law.\u00a0 I think it sucks for two reasons: It replaced a law that was not broken and did not need to be replaced. It replaces Arizona&#8217;s limited liability company act with what I call the liability company act because the new law creates many new ways that members and managers of an Arizona LLC can be sued. One Example of a New Way a Member of an Arizona LLC Can be Sued New Arizona Revised Statutes\u00a0Section 29-3409.B.4 gives a member of an Arizona LLC the right to sue another member as a result of a the members&#8217; vote on a company matter.\u00a0 Section 29-3409.B.4\u00a0states: B. The fiduciary duty of loyalty\u00a0of a member in a member-managed limited liability company includes the following duties: 4. to\u00a0disclose to each of the other members that are considering or voting on a decision or transaction regarding the company\u00a0or one or more of the members\u2019 interests in the company both of the following: (a)\u00a0any material conflict of interest\u00a0on the part of the disclosing member with respect to the decision or transaction. (b) if a material conflict of interest exists,\u00a0all material facts relating to the decision or transaction that are within the disclosing member\u2019s knowledge and not known or reasonably available to the affected members. Fortunately most of the liability creating provisions in the new LLC act can be eliminated or minimized by a well drafted Operating Agreement signed by all of the members. What You Need to Know About Arizona&#8217;s New LLC Act The good news is that new LLC act does not <a href=\"https:\/\/www.keytlaw.com\/azllclaw\/2019\/09\/llclaw\/\"> [&#8230;]<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[18,830],"tags":[],"class_list":["post-12094","post","type-post","status-publish","format-standard","hentry","category-arizona-corporation-commission","category-new-arizona-llc-act"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.7 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Arizona&#039;s New LLC Law Is Now Effective (9\/1\/19) - Arizona LLC Law %<\/title>\n<meta name=\"description\" content=\"Arizona&#039;s new LLC law become effective on September 1, 2019.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.keytlaw.com\/azllclaw\/2019\/09\/llclaw\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arizona&#039;s New LLC Law Is Now Effective (9\/1\/19)\" \/>\n<meta property=\"og:description\" content=\"Arizona&#039;s new LLC law become effective on September 1, 2019.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.keytlaw.com\/azllclaw\/2019\/09\/llclaw\/\" \/>\n<meta property=\"og:site_name\" content=\"Arizona LLC Law\" \/>\n<meta property=\"article:publisher\" content=\"http:\/\/www.facebook.com\/keytlaw\" \/>\n<meta property=\"article:author\" content=\"http:\/\/www.facebook.com\/keytlaw\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-02T03:27:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-10-17T17:41:08+00:00\" \/>\n<meta name=\"author\" content=\"Richard Keyt\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Richard Keyt\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/\"},\"author\":{\"name\":\"Richard Keyt\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#\\\/schema\\\/person\\\/9d6c74d30296559f95e238fa25182391\"},\"headline\":\"Arizona&#8217;s New LLC Law Is Now Effective (9\\\/1\\\/19)\",\"datePublished\":\"2019-09-02T03:27:09+00:00\",\"dateModified\":\"2020-10-17T17:41:08+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/\"},\"wordCount\":589,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#organization\"},\"articleSection\":[\"AZ Corporation Commission\",\"New Arizona LLC Act\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/\",\"name\":\"Arizona's New LLC Law Is Now Effective (9\\\/1\\\/19) - Arizona LLC Law %\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#website\"},\"datePublished\":\"2019-09-02T03:27:09+00:00\",\"dateModified\":\"2020-10-17T17:41:08+00:00\",\"description\":\"Arizona's new LLC law become effective on September 1, 2019.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2019\\\/09\\\/llclaw\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Arizona&#8217;s New LLC Law Is Now Effective (9\\\/1\\\/19)\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#website\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/\",\"name\":\"Arizona LLC Law\",\"description\":\"Information about Forming &amp; 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