Blog Post
New Arizona LLC law went into full effect September 1, 2020
Hoopes Adams & Scharber, PLC • September 1, 2020
To help our LLC clients avoid the new law's unfavorable default provisions, we offer a $750 flat-fee option for updating most operating agreements.
Given the turmoil of the last few months, many LLC managers and members have been focused more on their business's survival than on its governance. Nevertheless, on September 1, the 2018 Arizona Limited Liability Company Act (ALLCA) went into full effect, totally replacing Arizona's original LLC statutes.
The new law imposes various default provisions that, if not affirmatively addressed, could undermine some of the benefits that you expected to achieve by choosing an LLC form of entity. Those provisions include:
- fiduciary duties
- contributions and distributions
- record keeping
- personal liability
- indemnification
- dissolution.
FLAT FEE FOR OPERATING AGREEMENT UPDATE
Your LLC can avoid the new law's default provisions, including the imposition of fiduciary duties, with a review and revision of your LLC's operating agreement.
This need not be a complicated or expensive process. If we drafted your operating agreement, we can update it for a flat fee of $750. The fee includes a meeting or phone call to review your operating agreement, determine your preferences with respect to the default provisions, and draft a new agreement to be signed by you and your members.
If we did not draft, or you do not have, an operating agreement, we can still assist you, but we can estimate the fee only after an initial review of your agreement.
FOCUS ON MULTI-MEMBER LLCs
While the new law does not distinguish between single-member and multi-member LLCs, as a practical matter the default provisions are not as troubling for most single-member entities.
Our main emphasis at this time is to ensure that all of our multi-member LLC clients have an operating agreement that complies with the new law and meets the needs of the LLC's members.
To get the ball rolling, contact Ron Adams
or Ryan Scharber
by email or phone (480-345-8845).
