Limited liability company law in Arizona underwent considerable changes with a new LLC Act becoming effective on September 1, 2019. The changes in LLC are effective for all new LLC's that are organized on or after September 1, 2019.
For a limited liability company organized in Arizona prior to September 1, 2019 the laws will not govern them until after August 31, 2020.
The text to Arizona's new LLC law is found under Arizona Revised Statutes Section 29-3100 et. seq.
The LLC Act has some significant changes. Many of the changes to the law will automatically apply in cases where the LLC operating agreement (the contract between owners) does not address a particular issue.
Below are some noteworthy provisions of the new LLC Act:
fiduciary duties may now be imposed on members and managers;
operating agreements may be utilized to change the default fiduciary duties (such as duty of care and duty of loyalty);
obligations to contributions to the LLC are not enforceable unless it is in writing;
expands ability for courts to issue attorneys' fees and costs regarding disputes over information;
inaccurate information about the LLC filed with the Corporation Commission can create liability;
default rules for expulsion of members;
expansion of events and procedures regarding dissolution and winding up.
For existing Arizona LLC's, the company documents may need to be reviewed and updated to comply with the new Act or avoid some of the Act's default provisions.
If you have any questions about your LLC documents or forming a new limited liability company, please call Matthew McCabe at 480-455-3520.
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