When forming a Limited Liability Company (LLC) in Arizona, creating and executing an LLC Operating Agreement is one of the most critical steps. This legally binding document outlines your LLC’s ownership, management, and operational procedures, ensuring that your business runs smoothly and is protected from potential disputes and legal issues.
Importance of an Operating Agreement
You can create your own LLC operating agreement in Arizona or hire an attorney to draft one for you. Despite not being required, having a written operating agreement gives you and any co-member certain advantages that can help your business:
- Reinforces your limited liability status
- Clarifies verbal agreements
- Protects agreement in eyes of the state
An operating agreement can include:
- LLC’s name and principal address
- Duration of the LLC
- Member capital contributions
- Tax treatment
- Member responsibilities
You should keep the signed operating agreement on file for future reference. It is not a document that needs to be filed with the state.
Operating Agreement Requirements
An operating agreement outlines the rules, regulations, and structure of an Arizona LLC. It is highly recommended for LLCs to prevent confusion. Having a written operating agreement can provide several advantages:
- Reinforces limited liability status
- Clarifies verbal agreements
- Protects the agreement in the eyes of the state
It can detail:
- LLC’s name
- Address
- Duration
- Tax treatment
- Member responsibilities
Remember to keep the signed document for future reference as it does not need to be filed with the state.