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The Arizona LLC operating agreement is a recommended legal document for all LLCs in Arizona. An LLC’s operating agreement is used to outline the hierarchy and procedure of a business, including owner responsibilities and rights to help prevent disputes and protect liability for members.

From AZ Rev Stat § 29-3102 (2019):

17. “Operating agreement” means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in section 29-3105, subsection A. Operating agreement includes the agreement as amended or restated.

Arizona Operating Agreement Law

Per AZ Rev Stat § 29-3105 (2019) of the Arizona Partnership Statutes:

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.

Forming an LLC in Arizona

  1. Conduct a name search
  2. Choose a registered agent
  3. File formation articles
  4. Publication in newspaper
  5. Draft an operating agreement

Before filing to create the LLC, all Arizona LLCs need to choose a legal registered business name. This name must include a designator for an LLC, such as:

  • LLC
  • L.L.C.
  • or Limited Liability Company

The chosen name should be unique from all other businesses in the state, and should not include designators for other business types (corp, inc, etc.).

Names relating to a professional LLC service may require additional verification of a licensed practitioner on the LLC to allow for titles such as “MD”, “CPA”, or “PA”.

The name cannot include government agencies or their abbreviations such as Treasury, CIA, Secret Service, etc.

To conduct the name search, use the Arizona Corporation Commission Business Entity Search website.

Step 2: Choose Your Registered Agent

All Arizona LLCs are required to appoint a registered agent that will accept service of process and legal correspondence for the company. The agent can be an individual or an agent service.

The agent must:

  • Be a resident of the state
  • Have a physical (not a P.O. Box) address in Arizona

When using a registered agent service, the agent must be:

    • Registered to do business in Arizona
    • Located at a physical, non-PO box address in Arizona

Step 3: File Your Formation Articles

In Arizona, every LLC formation is required to file formation articles – either Articles of Organization or a Foreign Registration statement. More information on expedited processing can be found on the ACC website.

Online Filing (Domestic):

      • $50 filing fee, plus optional $35 expedited service fee, $100 next-day service fee, $200 same-day fee, or $400 2-hour fee
      • Turnaround time: 7-9 business days, or 5-7 business days if expedited
      • Create an account and submit online

Mailed Filing (Domestic):

      • $50 filing fee, plus optional $35 expedited service fee
      • Turnaround time: 7-9 business days upon receipt, 5-7 business days upon receipt if expedited
      • Fill out the form online or after printing, include a Cover Sheet, and mail to:

Arizona Corporation Commission
Examination Section
1300 W. Washington St.
Phoenix, AZ 85007

In-Person Filing (Domestic):

      • $50 filing fee, plus optional $35 expedited service fee, $100 next-day service fee, $200 same-day fee, or $400 2-hour fee
      • Turnaround time: 7-9 business days, 5-7 business days if expedited
      • Fill out the form online or after printing, include a Cover Sheet, and deliver to:

Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007

Arizona does not offer online filing for foreign LLCs.

Mailed Filing (Foreign):

      • $150 filing fee, plus optional $35 expedited service fee
      • Turnaround time: 7-9 business days upon receipt, 5-7 business days upon receipt if expedited
      • Fill out the form online or after printing, include a Certificate of Good Standing copy, and mail to:

Arizona Corporation Commission
Examination Section
1300 W. Washington St.
Phoenix, AZ 85007

In-Person Filing (Foreign):

      • $50 filing fee, plus optional $35 expedited service fee, $100 next-day service fee, $200 same-day fee, or $400 2-hour fee
      • Turnaround time: 7-9 business days, 5-7 business days if expedited
      • Fill out the form online or after printing, include a Certificate of Good Standing copy, and deliver to:

Arizona Corporation Commission
Corporate Filings Section
1300 W. Washington St.
Phoenix, AZ 85007

Step 4: Publication in Newspaper

As part of registering a LLC in Arizona, the state requires you to provide a notice of formation in the form of running advertisements in local papers. The ad must run for 3 straight publications (between 1-3 weeks depending on the paper) and should be run in the same county as the LLC’s registered agent within 60 days of formation.

Maricopa and Pima County are excluded from this requirement.

Once you receive your Notice of Publication form, you will complete the form and then contact local papers in the correct county to gather more information about running the required ads. These ad runs can cost anywhere from $50-200 dollars, so shopping around (if there are multiple options in your county) can help save money.

Following the completion of the 3 publications, the newspaper will provide an Affidavit of Publication you can register with the Arizona Corporation Commission or simply keep a copy with your business records until required. It does not legally have to be filed with the state, but it is a good idea to have a third party keep a record of the document just in case.

Step 5: Draft an Arizona Operating Agreement

Despite not being legally required, an operating agreement is an important document for Arizona LLCs to have – especially for multi-member formations. This legal documentation is used to set the foundation of the business, including operations, responsibilities, individual rights, and liability for the entire LLC. These can include voting rights, member duties, profit or loss breakdown, and more.

Without this document, the legal and financial liability of the LLC members may be vulnerable as the laws applying to the business default to the state laws, which do not provide the custom protections an individual company requires.

An operating agreement does not need to be filed with the state of Arizona.