Arizona recognizes an LLC operating agreement whether it is oral, implied, written, or a combination, and the definition expressly includes an agreement adopted by a sole member under A.R.S. § 29-3102(17). If the agreement leaves a subject open, Arizona’s statutory defaults apply, including equal interim distributions and management by the members unless the Articles of Organization provide for managers.
Choose the version that matches your Arizona LLC structure.
Does Arizona Require an LLC Operating Agreement?
No. Arizona does not require an LLC to adopt an operating agreement. The Arizona Corporation Commission’s business guidance also states that an operating agreement is not filed with the Commission. Formation instead occurs through Articles of Organization filed with the Commission.
Arizona law recognizes oral and implied agreements as well as agreements in a record, so notarization is not a condition for an operating agreement to exist. If the agreement is written, however, the LLC must keep copies of its current and prior written operating agreements and amendments in its records.
How Arizona Defines an LLC Operating Agreement
“Operating agreement” means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in section 29-3105, subsection A. Operating agreement includes the agreement as amended or restated.
Arizona does not limit an operating agreement to a signed document. The statute recognizes oral terms, implied terms, terms in a record, or a combination.
A single-member LLC can have an operating agreement. Arizona’s statutory definition expressly includes an agreement of a sole member.
Under Ariz. Rev. Stat. § 29-3105, the agreement governs member relations, manager rights and duties, company affairs, and amendment procedures. When it does not address a matter, the Arizona Limited Liability Company Act supplies the rule, subject to provisions that cannot be changed.
Arizona LLC Default Rules When Your Agreement Is Silent
These are Arizona rules worth addressing directly in the agreement. Several can produce results that owners may not expect.
Certain disputes and matters outside the ordinary course are decided by a majority in interest, based on profit interests rather than a simple member headcount.
§ 29-3407(B)(3)If the LLC makes an interim distribution, it is divided in equal shares, rather than automatically following contributions or ownership percentages.
§ 29-3404In a member-managed LLC, each member is an agent for ordinary-course business and can bind the company unless the member lacks authority and the other party knows it.
§ 29-3301A manager may be removed at any time, without notice or cause, by a majority in interest of the members.
§ 29-3407(C)(5)Unless the agreement establishes another valid procedure, amendment requires the affirmative vote or consent of all members.
§§ 29-3105, 29-3407A member can withdraw at any time, but withdrawal that breaches an express operating-agreement provision can be wrongful and create liability for resulting damages.
§§ 29-3601, 29-3602