The Arizona multi-member LLC operating agreement is a legal document that is implemented by a business/company, whereas there will be more than one contributing member. The document will outline all terms, conditions as well as any covenants between the company and its members. It will also outline, some basic, some in-depth company policies that must be agreed upon by the members and managing member(s). Implementation of this agreement and compliance with the policies stated shall offer the business and all members, legal protections needed by any business in the event of litigation.
The State of Arizona does not require an operations agreement, however, it is strongly recommended, for the protection of the member’s personal assets, that all businesses provide this agreement. Once completed, all signatures to this document must be witnessed and acknowledged by a Notary Public.
How to Write
Step 1 – Download the Document –
- Establish the document by entering the name of the company in the line at the top of the form
- Submit the date in which the document shall become effective in mm/dd/yyyy format
- Enter the full names of the members into the lines provided
Step 2 – The Company – Submit the following required information:
Formation:
- Date of effectiveness in mm/dd/yyyy format
- Enter the name of the company
- Again enter the name of the company
- Read the remaining portion of the paragraph
Name – Review the following sections, entering information as required
- Submit the company name in which business shall be conducted
- Purpose
- Office – Enter the complete physical address where the business of the company shall be conducted
- Registered Agent – Submit the full name of the initial Registered Agent and the address where the agent shall do business under the company name
- Term – Provide the date, in which the document shall commence in mm/dd/yyyy format
- Names and Addresses of Members
- Admission of Additional Members
Step 2 – capital Contributions – Carefully review the subsections as follows:
- Initial Contributions (by the member(s))
- Additional Contributions
- No Interest on Capital Contributions
Step 3 – Allocation of Profits and Losses; Distributions – Read the following information contained in the subsections:
- Profits/Losses
- Distributions
- No Right to Demand Return of Capital
Step 4 – Indemnification –
- Read the entire section
Step 5 – Powers and Duties Managers –
Management of Company:
- Members must read 5.1.1 through 5.3
Step 6 – Salaries, Reimbursement, and Payment of Expenses – Review:
- Organization Expenses
- Salary
- Legal and Accounting Services
Step 7 – Books of Account, Accounting Reports, Tax Returns, Fiscal Year, Banking – The following subsections must be read and understood by all members:
- Method of Accounting
- Fiscal Year; Taxable Year
- Capital Accounts
- Banking
Step 8 – Transfer of Membership Interest – This is a very detailed section (with subsections) that all members must take time to read and understand any possible implications. In the event any of the members are uncertain about the meaning of any of these subsections, either make an inquiry to the owner or consider contact with an attorney to assist in clarification, prior to provision of signature(s) –
- Sale or Encumbrance Prohibited
- Right of First Refusal (Read 8.2 through 8.2.5)
- Substitute Parties (Read 8.3 through 8.3.2)
- Death, Incompetency or Bankruptcy of Member (8.4 and 8.4)
- Death Buy Out (8.5 through 8.5.6)
Step 9 – Dissolution and Winding Up of the Company
- Dissolution (9.1 through 9.1.4)
- Winding Up (9.2 through 9.2.3)
Step 10 – General Provisions – Before entering the completion of this document, all members must review the following sections:
- Amendments
- Governing Law
- Entire Agreement: Modification
- Attorney’s Fees
- Further Effect
- Severability
- Captions
- Notices
Step 11 – Members Signatures – All signatures must be entered before a notary public. Once the members are in service of a Notary; Proceed:
- Each member must print or type their full name
- Each member must submit their signature
Step 12 – Listing of Members (Schedule 1) –
- Enter the name of the company to establish the listing
- Provide the date in which the listing is being (or has been) prepared in dd/mm/yyyy format
- AND
- Members must submit their name
- Provide their respective complete addresses
- AND (in the presence of a notary public) the members must submit their printed or typed names
- Submit their signatures
Step 13 – Listing of Capital Contributions (Schedule 2) – All members must enter:
- Member’s names (respective)
- Each member’s individual contribution
- Each member’s percentage of ownership
- * The member’s contribution(s) must not be lower than $100.00
- AND
- Signing before a notary public, date the member’s signatures in dd/m/yy format
- All members must type or print their full name
- All members must provide their signatures
Step 14 – Listing of Valuation of Members Interest (Schedule 3) – Submit the following information:
- At the top of the page, enter the name of the company
- The members, in the presence of a Notary Public, must enter their names
- Members must then provide their Valuation Endorsement (dollar amount)
- AND
- The next section must first be dated in dd/m/yy format
- Members must print or type their name
- Members must then provide their signature
Step 15 – Notarization –
- Once the Notary Public has had the opportunity to witness and record the member’s signatures, the notary shall complete the notarization page of the document and acknowledge all signatures by provision of the notary’s signature and application of their official seal or stamp
After the document has been completed, copies must be made and one provided to each member for their records. It’s advisable that each member keep the document in a safe place.
