{"id":9073,"date":"2017-07-15T10:17:43","date_gmt":"2017-07-15T17:17:43","guid":{"rendered":"http:\/\/www.keytlaw.com\/azllclaw\/?p=9073"},"modified":"2017-07-15T10:17:43","modified_gmt":"2017-07-15T17:17:43","slug":"newlaw","status":"publish","type":"post","link":"https:\/\/www.keytlaw.com\/azllclaw\/2017\/07\/newlaw\/","title":{"rendered":"My First Impression of the Proposed New Arizona LLC Law"},"content":{"rendered":"<p style=\"text-align: justify;\">This article is the second of what will become many articles I write about the proposed Arizona Revised Limited Liability Company Act (RULLCA) that some Arizona lawyers intend to ask the Arizona legislature to adopt.\u00a0 If the Arizona RULLCA were to become law it would replace Arizona&#8217;s 25 year old LLC law in its entirety. See <a href=\"http:\/\/www.keytlaw.com\/azllclaw\/2017\/07\/new-llc-law\/\">After 7 Years of Drafting a Small Group of Lawyers Wants to Replace Arizona\u2019s LLC Law<\/a> for the complete text of the proposed LLC law.<\/p>\n<p style=\"text-align: justify;\">On July 11, 2017, I sent the following email to 39 lawyers on an Arizona State Bar business law section email list:<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">&#8220;I am writing an article about the RULLCA as revised by the committee. I would like to include the names and backgrounds of the people who are willing to admit they are responsible for the proposed law. If you are one of the authors of the law please send me an email with the following information:<\/p>\n<p>1. Your name<br \/>\n2. Name of your law firm<br \/>\n3. Your primary area(s) of practice<br \/>\n4. Your experience forming and administering Arizona LLCs.<br \/>\n5. How many LLCs did you form in the last year?<br \/>\n6. How many LLCs have you formed since 1992?<br \/>\n7. Why you think Arizona should replace its current LLC law with RULLCA as revised by you.<br \/>\n8. Whether or not you authorize me to include your email address in the article.<\/p><\/blockquote>\n<p style=\"text-align: justify;\">I sent the people on the email list the message above because I knew that all of the people who were responsible for drafting the proposed Arizona RULLCA were on the email list.\u00a0 The purpose of my email message was to identify the people who were involved in drafting the Arizona RULLCA and learn about their experience with LLCs.\u00a0 I also invited the drafters to tell me why Arizona should adopt the drafter\u2019s Arizona RULLCA.\u00a0 The public should know this information about the drafters of the proposed law. Sadly only one person admitted to me that he worked on the committee. I hope that the people who drafted the proposed Arizona RULLCA are not afraid to tell the public their names.\u00a0 If a drafter of the proposed Arizona RULLCA sends me information or text for an article about the proposed law I will be happy to publish it on this website.<\/p>\n<p style=\"text-align: justify;\">I have not decided if I will support or oppose the Arizona RULLCA. I\u2019m still reading and studying the proposed law and making notes. When I am done I will publish my analysis and whether I support or oppose the proposed Arizona RULLCA.\u00a0 If adopted the proposed law would replace Arizona&#8217;s existing LLC law in its entirety.\u00a0 To get updates of the blog posts I will be making over the next year or so enter your email address in the right column of this page under the text &#8220;<strong>Subscribe to LLC Law Blog<\/strong>.&#8221;<\/p>\n<p style=\"text-align: justify;\">My initial impression of the Arizona RULLCA is that the proposed law needs to be tweaked.\u00a0 Here are some problems I found just in the Section 102, Definitions, which is the second section of the new law:<\/p>\n<p style=\"text-align: justify;\"><strong>Section 102(12)<\/strong><\/p>\n<p style=\"text-align: justify;\">This subsection states \u201c&#8217;Majority in interest of the members&#8217; means, at any particular time, one or more members that hold in the aggregate a majority of the interests in the limited liability company\u2019s profits held at that time by all members, disregarding any profit interests held by persons who are not members. The members\u2019 respective interests in the company\u2019s profits shall be in proportion to their rights to share in distributions that exceed the repayment of their contributions.&#8221;<\/p>\n<p style=\"text-align: justify; padding-left: 30px;\">Problem 1: The term &#8220;profits&#8221; is not defined in the new law.<\/p>\n<p style=\"text-align: justify; padding-left: 30px;\">Problem 2: What does the last sentence mean?<\/p>\n<p style=\"padding-left: 30px; text-align: justify;\">Problem 3: If the members want to define Majority in interest to be a majority of the members (2 of 3 members or 3 of 4 members) regardless of their share of the profits, can they do it?<\/p>\n<p style=\"text-align: justify;\"><strong>Section 102(13)<\/strong><\/p>\n<p style=\"text-align: justify;\">This subsection states \u201c&#8217;Manager&#8217; means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in Section 407(c).\u201d<\/p>\n<p style=\"text-align: justify; padding-left: 30px;\">Problem 4: This means that despite the Articles of Organization stating the LLC is manager managed and naming all the managers, nobody is actually a manager unless the LLC has an Operating Agreement that names the manager(s). Requiring all manager managed LLC to have an Operating Agreement would be a major change to existing LLC law.<\/p>\n<p style=\"text-align: justify;\"><strong>Section 102(19)<\/strong><\/p>\n<p style=\"text-align: justify;\">This subsection defines Person as \u201can individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.\u201d<\/p>\n<p style=\"text-align: justify; padding-left: 30px;\">Problem 5: How does the group of business lawyers who worked on the proposed law for seven years fail to include in the definition of Person the following types of entities recognized by Arizona law: benefit corporations, general partnerships, real estate investment trusts, limited liability partnerships and limited liability limited partnerships?\u00a0 The drafters might say that they didn&#8217;t need to mention GPs, LLPs and LLLPs because the definition includes the word partnership.\u00a0 If that is the answer then why doesn&#8217;t the definition mention corporation and eliminate the words business corporation, nonprofit corporation and public corporation and why does it list limited partnership if that type of entity is included in partnership?<\/p>\n<p><strong>How to Stay Informed of the Status of the Proposed Arizona RULLCA<\/strong><\/p>\n<p>To get updates of the blog posts I will be making over the next year or so enter your email address in the right column of this page under the text &#8220;<strong>Subscribe to LLC Law Blog<\/strong>.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article is the second of what will become many articles I write about the proposed Arizona Revised Limited Liability Company Act (RULLCA) that some Arizona lawyers intend to ask the Arizona legislature to adopt.\u00a0 If the Arizona RULLCA were to become law it would replace Arizona&#8217;s 25 year old LLC law in its entirety. See After 7 Years of Drafting a Small Group of Lawyers Wants to Replace Arizona\u2019s LLC Law for the complete text of the proposed LLC law. On July 11, 2017, I sent the following email to 39 lawyers on an Arizona State Bar business law section email list: &#8220;I am writing an article about the RULLCA as revised by the committee. I would like to include the names and backgrounds of the people who are willing to admit they are responsible for the proposed law. If you are one of the authors of the law please send me an email with the following information: 1. Your name 2. Name of your law firm 3. Your primary area(s) of practice 4. Your experience forming and administering Arizona LLCs. 5. How many LLCs did you form in the last year? 6. How many LLCs have you formed since 1992? 7. Why you think Arizona should replace its current LLC law with RULLCA as revised by you. 8. Whether or not you authorize me to include your email address in the article. I sent the people on the email list the message above because I knew that all of the people who were responsible for drafting the proposed Arizona RULLCA were on the email list.\u00a0 The purpose of my email message was to identify the people who were involved in drafting the Arizona <a href=\"https:\/\/www.keytlaw.com\/azllclaw\/2017\/07\/newlaw\/\"> [&#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":[74],"tags":[],"class_list":["post-9073","post","type-post","status-publish","format-standard","hentry","category-proposed-llc-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.7 (Yoast SEO v27.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>My First Impression of the Proposed New Arizona LLC Law - Arizona LLC Law %<\/title>\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\/2017\/07\/newlaw\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"My First Impression of the Proposed New Arizona LLC Law\" \/>\n<meta property=\"og:description\" content=\"This article is the second of what will become many articles I write about the proposed Arizona Revised Limited Liability Company Act (RULLCA) that some Arizona lawyers intend to ask the Arizona legislature to adopt.\u00a0 If the Arizona RULLCA were to become law it would replace Arizona&#8217;s 25 year old LLC law in its entirety. See After 7 Years of Drafting a Small Group of Lawyers Wants to Replace Arizona\u2019s LLC Law for the complete text of the proposed LLC law. On July 11, 2017, I sent the following email to 39 lawyers on an Arizona State Bar business law section email list: &#8220;I am writing an article about the RULLCA as revised by the committee. I would like to include the names and backgrounds of the people who are willing to admit they are responsible for the proposed law. If you are one of the authors of the law please send me an email with the following information: 1. Your name 2. Name of your law firm 3. Your primary area(s) of practice 4. Your experience forming and administering Arizona LLCs. 5. How many LLCs did you form in the last year? 6. How many LLCs have you formed since 1992? 7. Why you think Arizona should replace its current LLC law with RULLCA as revised by you. 8. Whether or not you authorize me to include your email address in the article. I sent the people on the email list the message above because I knew that all of the people who were responsible for drafting the proposed Arizona RULLCA were on the email list.\u00a0 The purpose of my email message was to identify the people who were involved in drafting the Arizona [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.keytlaw.com\/azllclaw\/2017\/07\/newlaw\/\" \/>\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=\"2017-07-15T17:17:43+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=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/\"},\"author\":{\"name\":\"Richard Keyt\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#\\\/schema\\\/person\\\/9d6c74d30296559f95e238fa25182391\"},\"headline\":\"My First Impression of the Proposed New Arizona LLC Law\",\"datePublished\":\"2017-07-15T17:17:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/\"},\"wordCount\":955,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#organization\"},\"articleSection\":[\"Proposed LLC Law\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/\",\"name\":\"My First Impression of the Proposed New Arizona LLC Law - Arizona LLC Law %\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#website\"},\"datePublished\":\"2017-07-15T17:17:43+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/2017\\\/07\\\/newlaw\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"My First Impression of the Proposed New Arizona LLC Law\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#website\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/\",\"name\":\"Arizona LLC Law\",\"description\":\"Information about Forming &amp; Operating Arizona LLCs\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#organization\",\"name\":\"KEYTLaw, LLC\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/wp-content\\\/uploads\\\/logo.png\",\"contentUrl\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/wp-content\\\/uploads\\\/logo.png\",\"width\":500,\"height\":500,\"caption\":\"KEYTLaw, LLC\"},\"image\":{\"@id\":\"https:\\\/\\\/www.keytlaw.com\\\/azllclaw\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"http:\\\/\\\/www.facebook.com\\\/keytlaw\",\"https:\\\/\\\/x.com\\\/azestateplanner\",\"http:\\\/\\\/www.linkedin.com\\\/pub\\\/richard-keyt\\\/5\\\/a88\\\/a30\\\/\",\"https:\\\/\\\/www.youtube.com\\\/user\\\/keytlaw\"],\"description\":\"We are Arizona attorneys who have formed 9,000+ Arizona LLCs. 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We also prepare wills, trusts and estate plans to protect our clients' most valuable assets - their loved ones.","email":"rk@keytlaw.com","telephone":"480-664-7478","legalName":"KEYTLaw, LLC","foundingDate":"2001-06-01","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"1","maxValue":"10"}},{"@type":"Person","@id":"https:\/\/www.keytlaw.com\/azllclaw\/#\/schema\/person\/9d6c74d30296559f95e238fa25182391","name":"Richard Keyt","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/be46af086de7d79cb650301f8e2188550999d39b68ef6226ddae375f7b4c0778?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/be46af086de7d79cb650301f8e2188550999d39b68ef6226ddae375f7b4c0778?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/be46af086de7d79cb650301f8e2188550999d39b68ef6226ddae375f7b4c0778?s=96&d=mm&r=g","caption":"Richard Keyt"},"description":"The author of this article is Richard Keyt, an Arizona limited liability company and estate planning attorney who has formed 9,800+ LLCs. His Silver &amp; Gold LLC packages include the $85 expedited filing fee, a custom Operating Agreement and 170 ebook called the \"Arizona LLC Operations Manual.\" Read Rick's 400 five star Google &amp; Birdeye reviews. Connect with Richard at 480-664-7478 or send him an email message at rk@keytlaw.com. Make a free office, phone or Zoom meeting appointment using his online calendar.","sameAs":["https:\/\/www.keytlaw.com\/","http:\/\/www.facebook.com\/keytlaw","http:\/\/www.linkedin.com\/pub\/richard-keyt\/5\/a88\/a30\/","https:\/\/x.com\/azestateplanner","http:\/\/www.youtube.com\/keytlaw"],"gender":"male","jobTitle":"Estate Planning & LLC Attorney","worksFor":"KEYTLaw, LLC"}]}},"views":6924,"_links":{"self":[{"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/posts\/9073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/comments?post=9073"}],"version-history":[{"count":0,"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/posts\/9073\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/media?parent=9073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/categories?post=9073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.keytlaw.com\/azllclaw\/wp-json\/wp\/v2\/tags?post=9073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}