LLC Formation Requirements
Arizona LLC Formation Statute
The following LLC Formation statutes are from the Arizona Limited Liability Company Act:
Section 29-3201. Formation of limited liability company; articles of organization
A. One or more persons may act as organizers to form a limited liability company by delivering to the commission for filing the articles of organization.
B. The articles of organization must state all of the following:
1. The name of the limited liability company that complies with section 29-3112.
2. The principal address, which may be the same as the mailing address of the company's statutory agent.
3. The name and street and mailing addresses in this state of the company's statutory agent.
4. Whether the company is a manager-managed limited liability company or a member-managed limited liability company and either of the following:
(a) If the company is a manager-managed limited liability company, the name and address of each manager and the name and address of each member who owns a twenty percent or greater interest in the capital or profits of the company.
(b) If the company is a member-managed limited liability company, the name and address of each member of the company.
C. The articles of organization may contain statements as to matters other than those required by subsection B of this section but may not vary or otherwise affect the provisions specified in section 29-3105, subsections C and D in a manner inconsistent with section 29-3105.
D. A limited liability company is formed when the articles of organization become effective.
E. A parent limited liability company and its subsidiary limited liability companies may be formed at the same time.
F. The filing of the articles of organization by the commission is conclusive proof that all conditions precedent that are required to be performed by the organizers have been satisfied and that the limited liability company has been legally organized and formed under this chapter.
G. Within sixty days after the commission files the articles of organization, either of the following must occur:
1. A notice of the filing of the articles shall be published in a newspaper of general circulation in the county of the statutory agent's street address for three consecutive publications containing the information required in subsection B of this section. An affidavit evidencing the publication may be filed with the commission.
2. The commission shall input the information regarding the approval into the database as prescribed by section 10-130 if the statutory agent's street address is in a county with a population of more than eight hundred thousand persons.
What This Means: Key Takeaways*
Required Information for Arizona LLC Formation:
- LLC’s name (Must meet Arizona LLC naming requirements)
- LLC principal office’s street and mailing address
- Statutory agent’s name and Arizona address
- Whether the LLC is member-managed or manager-managed
- If the LLC is manager-managed, provide the name and address of each manager and each member that owns a 20% or greater interest in the capital or profits of the company
- If the LLC is member-managed, provide the name and address of each member of the company
- Within 60 days after the commission files the Articles of Organization, a Notice of LLC Formation must be published in an approved newspaper in the statutory agent’s county for three consecutive publications.
- The exception to this rule is if the statutory agent’s address is in a county that has a population of more than 800,000 individuals (i.e., Maricopa and Pima Counties). In this case, the Arizona Corporation Commission will post a public notice on their website of your LLC’s formation.
Recommended: For help with completing the LLC formation forms, visit our Arizona LLC Articles of Organization guide.
Statutory Agent Duties and Appointment
Arizona LLC laws define the duties and appointment of the LLC statutory agent. A statutory agent is also known as a registered agent.
Arizona LLC Statutory Agent Statute
The following statutory agent statutes are from the Arizona Limited Liability Company Act:
Section 29-3115, Statutory agent
A. Each limited liability company and each registered foreign limited liability company shall designate and maintain a statutory agent in this state. Unless the statutory agent signed the document making the appointment, the appointment of a statutory agent is not effective until the agent or the company delivers a record to the commission signed by the agent accepting the appointment.
B. A statutory agent for a limited liability company or registered foreign limited liability company must have a place of business or residence in this state. A statutory agent must be either an individual resident of this state, a domestic corporation, a limited liability company, a foreign corporation or a foreign limited liability company authorized to transact business in this state.
C. The only duties under this chapter of a statutory agent that has complied with this chapter are:
1. To forward to the limited liability company or registered foreign limited liability company at the address most recently supplied to the agent by the company or foreign company any process, notice or demand pertaining to the company or foreign company that is served on or received by the agent.
2. If the statutory agent resigns, to provide the notice required by section 29-3117, subsection C to the company or foreign company at the address most recently supplied to the agent by the company or foreign company.
3. To keep current the information with respect to the agent in the articles of organization or foreign registration statement.
What This Means: Key Takeaways*
An Arizona statutory agent must:
- Maintain a registered office in Arizona (i.e., no P.O. Boxes)
- Be an individual, an Arizona corporation or LLC, or foreign corporation or LLC with a business address that is the same as the registered office address
- Sign an acceptance of appointment form
Statutory agent information is kept on file by the State of Arizona. If you change your statutory agent or if your statutory agent resigns, you must file a change of statutory agent form.
Arizona LLC laws provide guidelines for creating and maintaining an LLC operating agreement.
The following operating agreement statutes are from the Arizona Limited Liability Company Act:
Section 29-3105. Operating agreement; scope, function and limitations
A. Except as otherwise provided in subsections C and D of this section:
1. The operating agreement governs all of the following:
(a) Relations among the members as members and between the members and the limited liability company.
(b) The rights and duties under this chapter of a person in the capacity of manager.
(c) The activities and affairs of the company and the conduct of those activities and affairs.
(d) The means and conditions of amending the agreement.
2. The operating agreement may contain any provision that is not contrary to law.
3. In the event of a conflict between a provision of the operating agreement and this chapter, the provision of the operating agreement governs.
B. To the extent the operating agreement does not provide for a matter described in subsection A of this section, this chapter governs the matter.
C. An operating agreement may not:
1. Vary the law applicable under section 29-3104.
2. Vary a limited liability company's capacity under section 29-3109 to sue and be sued in the limited liability company's own name.
3. Vary any requirement, procedure or other provision of this chapter pertaining to:
(a) Statutory agents.
(b) The commission, including provisions pertaining to records authorized or required to be delivered to the commission for filing under this chapter.
4. Vary the provisions of section 29-3204.
5. Eliminate the contractual obligation of good faith and fair dealing or the duty to refrain from wilful or intentional misconduct under section 29-3409.
6. Limit or eliminate a person's liability for any violation of the contractual obligation of good faith and fair dealing or conduct involving wilful or intentional misconduct.
7. Unreasonably restrict the duties and rights of members and managers under section 29-3410, but the operating agreement may impose reasonable restrictions on the availability and use of information obtained under section 29-3410 and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use.
8. Vary the causes of dissolution specified in section 29-3701, subsection A, paragraph 4, subdivision (b) and section 29-3701, subsection A, paragraph 5.
9. Unreasonably restrict the right of a member to maintain an action under article 8 of this chapter, except that the operating agreement may require a member maintaining a direct action under section 29-3801 to plead and prove an actual or threatened injury that is not solely the result of any injury suffered or threatened to be suffered by the company.
10. Vary the provisions of section 29-3805, but the operating agreement may provide that the company may not have a special litigation committee.
11. Vary the required contents of a plan of merger, a plan of interest exchange, a plan of conversion, a plan of domestication or a plan of division under article 10 of this chapter.
12. Except as otherwise provided in section 29-3106 and section 29-3107, subsection B, restrict the rights under this chapter of a person other than a member or manager.
13. Reduce or eliminate the restrictions on distributions under section 29-3405, subsection A.
D. Subject to subsection C, paragraphs 5 and 6 of this section, without limiting other terms that may be included in an operating agreement, the following apply:
1. To the extent that, at law or in equity, a member or manager or other person has duties, including the duty of care, the duty of loyalty and any other fiduciary duty, to a limited liability company, to another member or manager or to another person that is a party to or is otherwise bound by an operating agreement, the member's, manager's or other person's duties may be expanded, limited or eliminated by the operating agreement.
2. An operating agreement may provide for the limitation or elimination of any or all liabilities for breach of the operating agreement or breach of duties, including the duty of care, the duty of loyalty and any other fiduciary duty, as expanded, limited or eliminated in the operating agreement, of a member, manager or other person to a company or to another member or manager or another person that is a party to or is otherwise bound by the operating agreement.
3. An operating agreement may specify a method by which a specific act, omission or transaction, or a specific category of acts, omissions or transactions, that would otherwise violate a duty, including the duty of care, the duty of loyalty and any other fiduciary duty, as expanded, limited or eliminated in the operating agreement, may be authorized or ratified. A general provision in an operating agreement that provides for management by one or more members or managers, without more, is not sufficient to specify a method for authorization or ratification under this paragraph.
4. An operating agreement may specify a method by which a member, manager or other person may be reimbursed, indemnified or held harmless, or by which the liability of a member, manager or other person may be limited or eliminated, for a specific act, omission or transaction, or a specific category of acts, omissions or transactions, that would otherwise violate a duty, including the duty of care, the duty of loyalty and any other fiduciary duty, as expanded, limited or eliminated in the operating agreement. A general provision in an operating agreement that provides for management by one or more members or managers, without more, is not sufficient to specify a method for reimbursing, indemnifying or holding harmless a person or limiting or eliminating a person's liability under this paragraph.
E. Subject to the limitations of subsection C, paragraphs 5 and 6 of this section, an operating agreement may define some or all of the fiduciary duties of a member, manager or other person that is a party to or is otherwise bound by an operating agreement to be the same as the fiduciary duties of a director, officer or shareholder of a corporation formed under the laws of this state, in which case, unless the operating agreement provides otherwise, all laws of evidence and evidentiary presumptions and other laws that apply to the fiduciary duties of a director, officer or shareholder of a corporation formed under the laws of this state apply to such duties.
Section 29-3106. Operating agreement; effect on limited liability company and persons becoming members; preformance agreement
A. A limited liability company is bound by and may enforce the operating agreement, whether or not the company has itself manifested assent to the operating agreement.
B. A person that becomes a member is deemed to assent to the operating agreement.
C. Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that on the formation of the company the agreement will become the operating agreement. One person intending to become the initial member of a limited liability company may assent to terms providing that on the formation of the company the terms will become the operating agreement.
What This Means: Key Takeaways*
An LLC operating agreement allows LLC members to create rules for how their unique LLC operates. These rules are often called “terms” or “provisions.”
Operating agreements are limited by state statute. For example, if the statute says LLC members can’t dissolve an LLC without all members agreeing, LLC members can’t change or override the statute with an operating agreement.
When an operating agreement is in place, it’s easier to navigate situations involving the operation of the LLC. And, if a lawsuit or dispute arises, LLC members (or the courts) have something to reference.
If a dispute arises that can’t be resolved by LLC members and there isn’t an operating agreement, the courts will use LLC statute to resolve disputes.
Creating an Operating Agreement
Some LLCs, such as professional LLCs or real estate LLCs, might need unique terms, while others might only need to cover standard provisions:
- Each member’s responsibilities
- How new members will be admitted
- How existing members may transfer or terminate their membership
- How profits and dividends will be distributed
- The process for amending the operating agreement
*This information is provided for educational and entertainment purposes only. Please consult a lawyer for legal advice.