Arizona LLC Operating Agreement Template

Arizona LLC Operating Agreement Law

Arizona's LLC statute defines an operating agreement as the agreement of all the members of a limited liability company, including a sole member, and says the agreement can be oral, implied, in a record or any combination of these.^[1] Wherever the agreement is silent, the default rules of the statute apply.^[2.2]

Subjects the Agreement Governs

Under Ariz. Rev. Stat. § 29-3105, the operating agreement governs four things.^[2.1]

• How the members deal with each other and with the company.
• The rights and duties of a person acting as manager.
• The company's activities and affairs, and how they are carried out.
• How, and on what conditions, the agreement can be amended.

The agreement may contain any provision that is not contrary to law. If a provision of the agreement conflicts with the LLC statute, the provision of the agreement governs, apart from the limits listed below.^[2.1]

The statute says what happens to matters the agreement does not cover.

To the extent the operating agreement does not provide for a matter described in subsection A of this section, this chapter governs the matter.

Limits on the Operating Agreement

Section 29-3105 sets limits on what the members can change through the agreement.^[2.1] The agreement may not do any of the following.

• Vary the law that applies under section 29-3104.
• Vary the company's capacity under section 29-3109 to sue and be sued in its own name.
• Vary any requirement, procedure or other provision of the LLC chapter about statutory agents, or about the commission and the records delivered to it for filing.
• Vary the provisions of section 29-3204.
• Eliminate the contractual obligation of good faith and fair dealing, or the duty to refrain from willful or intentional misconduct under section 29-3409.
• Limit or eliminate a person's liability for violating that obligation or for willful or intentional misconduct.
• Unreasonably restrict the duties and rights of members and managers under section 29-3410. Reasonable restrictions on the availability and use of that information are allowed, and the agreement may set remedies, including liquidated damages, for breaking them.
• Vary the causes of dissolution in section 29-3701, subsection A, paragraph 4, subdivision (b) and paragraph 5.
• Vary the requirements of section 29-3108, subsection C or D.
• Reduce or eliminate the restrictions on distributions under section 29-3405, or the liabilities for prohibited distributions under section 29-3406, in a way that hurts a person who is not a member or manager.
• Unreasonably restrict a member's right to bring an action under article 8 of the chapter. The agreement may require a member bringing a direct action under section 29-3801 to plead and prove an actual or threatened injury that is not solely the result of an injury to the company.
• Restrict the rights under the chapter of a person who is not a member or manager, except as sections 29-3106 and 29-3107, subsection B, allow.
• Vary the required contents of a plan of merger, interest exchange, conversion, domestication or division under article 10 of the chapter.
• Vary the provisions of section 29-3805 on special litigation committees. The agreement may say that the company has no special litigation committee.

Provisions the Agreement Can Change

Members can reshape the duties they owe. The agreement may expand, limit or eliminate the duty of care, the duty of loyalty and any other fiduciary duty of a member or manager. Duties the statute makes nonwaivable are the exception.^[2.1]

The agreement may also define those duties to match the duties of a director, officer or shareholder of an Arizona corporation. If it does, the corporate laws of evidence and evidentiary presumptions apply to those duties unless the agreement says otherwise.^[2.1]

The agreement may also limit or eliminate liability for breaching the agreement or breaching those duties. It cannot eliminate liability for violating the obligation of good faith and fair dealing or for willful or intentional misconduct.^[2.1]

How to Fill Out the Arizona LLC Operating Agreement

The Arizona LLC operating agreement template is a form of about 15 pages for an LLC with one member, whom the form calls the Member. The company is manager-managed, so the form also names the Managers. Work through it in order. Most blanks sit on the first page, and the rest are checkboxes, dates and the schedules at the end.

Have these details ready before you open the form.

• The LLC's exact name and the date the Articles of Organization were filed.
• The principal office address and the registered agent's name and address.
• The Member's name and address, and the names of any Managers and Officers.
• The start and end dates of the fiscal year.
• A short description of the Member's initial capital contribution.

1. Title and opening paragraph (page 1). Enter the LLC's name, its state of formation, the date of the agreement and the Member's name. For example, a made-up company called Sample Desert Holdings LLC with a Member named Jane Sample. Add the date the Articles of Organization were filed and the Arizona LLC statute the form asks you to name.
2. Sections 1 to 3 (page 1). Repeat the company name, then enter the principal business office and the name and address of the registered agent, also called the statutory agent. A made-up address such as 100 Example Street shows the format.
3. Section 6, Purposes (page 2). Check one box. Either describe the company's specific activities, such as owning and renting out sample equipment, or choose all matters permitted by applicable law.
4. Section 8, Managers (page 2). Enter the initial number of Managers, for example one or two. Their names go in Schedule B.
5. Section 8(g), Compensation of Managers (pages 3 and 4). Check one box. Either Managers may be paid expenses for attending Board meetings, or no compensation or reimbursement is paid.
6. Section 9, Officers (page 4). Check one box. Either the company has no Officers, or it has Officers and you describe each role.
7. Section 15, Fiscal Year (page 6). Enter the date the fiscal year starts and the date it ends.
8. Section 30, Effectiveness (page 10). Enter the date the LLC was legally formed.
9. Signature page (page 11). The Member signs and prints a name and title under the MEMBER line.
10. Schedule A (page 12). In the definition of Articles of Organization, enter the date the Articles were filed.
11. Schedule B (page 14). Enter the Member's name and address, the initial Managers and the initial Officers.
12. Schedule C (page 15). Describe the Member's initial capital contribution, for example cash or equipment, in your own words.

When every blank is complete, read the agreement once from the first page to the last, sign the Member line, and store a copy with the LLC's records.

Need the form for another state? Start from our LLC operating agreement template page. FormsPal also has other Arizona business paperwork, including the Arizona non-compete agreement, the Arizona promissory note and the Arizona bill of sale.

Frequently Asked Questions

These questions cover writing your own agreement, what happens without one, whether it can be oral, and what it can and cannot change. Each answer comes from the Arizona LLC statute.

Can I write my own operating agreement for my LLC?

Arizona's LLC statute makes the operating agreement the members' own agreement. It governs how the members deal with each other and the company, the rights and duties of managers, how the company is run, and how the agreement is amended. The agreement may contain any provision that is not contrary to law, within the limits listed above.^[2.1]

What happens if an LLC does not have an operating agreement?

To the extent an operating agreement does not provide for a matter, the Arizona LLC statute governs that matter. In other words, where the agreement is silent, the statute's default rules fill the gap.^[2.2]

Can an Arizona operating agreement be oral?

Yes. The statute defines an operating agreement as the agreement of all the members, including a sole member, whether oral, implied, in a record or any combination of these.^[1] Many LLCs still put the terms in writing so the members can see exactly what they agreed.

Can an operating agreement change the duties members owe?

Yes, to a large extent. The agreement may expand, limit or eliminate the duty of care, the duty of loyalty and any other fiduciary duty of a member or manager. It may also define those duties to be the same as the duties of a director, officer or shareholder of an Arizona corporation. Duties that the statute makes nonwaivable cannot be changed this way.^[2.1]

Can an operating agreement limit liability?

Yes, within limits. The agreement may limit or eliminate liability for breaching the agreement or breaching the duties it sets. It cannot eliminate liability for violating the obligation of good faith and fair dealing or for willful or intentional misconduct.^[2.1]

Is there anything an Arizona operating agreement cannot change?

Yes. Section 29-3105 lists matters the members cannot vary, including these.^[2.1]

• The law that applies to the company.
• The company's capacity to sue and be sued in its own name.
• The statutory agent provisions.
• The dissolution causes the statute names.
• The required contents of a merger plan.

The full list appears in the limits section above.

Other Arizona Forms
Different fillable Arizona templates readily available for download and that can be customized in our hassle-free document maker.

Arizona Last Will Arizona Living Will Arizona Small Estate Affidavit Arizona Bill of Sale Arizona Power of Attorney Arizona Rental Lease Agreement Arizona Eviction Notice Arizona Promissory Note Arizona Non-compete Agreement Arizona Prenuptial Agreement Arizona Marital Settlement (Divorce) Agreement

General information, not legal or tax advice.

Sources

1. A.R.S. 29-3102.
2. Ariz. Rev. Stat. § 29-3105.
   • 2.1 § 29-3105
   • 2.2 § 29-3105(B)