Arizona’s New LLC Act: What You Need To Know



Arizona's New LLC Act (Arizona Limited Liability Company Act (ALLCA))


Who does it impact?

Those who have an existing LLC in Arizona or are considering one in the future.


When was this law signed and when does it go into effect?

Arizona’s Governor, Doug Ducey, signed SB 1353 on April 10th of 2018. Arizona's new LLC Act repeals the current Arizona LLC law from 1992 and replaces it with the new ALLCA. This law goes into effect on September 1st, 2019. It will apply to all Arizona LLCs created after August 31st, 2019 and also applies to all existing Arizona LLCs after August 31st, 2020 when the existing Arizona LLC law is repealed.






This law requires all LLCs to have an Operating Agreement in order to lay out the obligations of all members and managers of the LLC, binding them to a commitment of loyalty to act on behalf of the company and also preventing them from competing directly with the company. The lack of an Operating Agreement places members and managers at great risk of being controlled by new rules articulated in the new Arizona LLC laws.


How do I make my LLC compliant?

To change your current LLC or make a new one compliant with the new law, you must include an Operating Agreement within your LLC that contains language that (i) complies with the new law and (ii) eliminates the many liability creating provisions contained in ALLCA. This law also applies to those who have multi-member LLCs. To ensure your LLC is complaint with the new law, its best to have a lawyer draft and review your operating agreement. Contact the experienced attorneys at RM Warner Law today.


To review the new ALLCA click here.  





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