LLC Operating Agreement Requirements in Arizona

At a glance

Requirements one by one

Arizona recognizes oral, implied, electronic, and sole-member agreements

A.R.S. § 29-3102 defines an operating agreement to include oral, implied, record-form, and combined arrangements of all members, including one sole member. A record may be tangible or electronic. The LLC Act imposes no general signature, witness, acknowledgment, or notary condition, although specific survivorship designations and some transfer restrictions require a signed record.

The agreement is optional. A.R.S. § 29-3105 makes it control the covered internal matters and uses the Act as the gap-filler. Its broad freedom-of-contract language remains subject to the section's express statutory floor.

Preformation terms take effect when the company forms

Intended initial members may agree that their terms become the operating agreement on formation, and a sole intended member may assent to terms with the same effect (A.R.S. § 29-3106). The LLC forms when its articles become effective, and Arizona requires at least one member at that time (A.R.S. § 29-3201; A.R.S. § 29-3401). The Act gives no later general adoption deadline.

The LLC is bound even without separately manifesting assent, and anyone who later becomes a member is deemed to assent. Later admission follows the agreement or, absent another statutory route, requires the new person's agreement plus every existing member's approval (A.R.S. § 29-3401).

Manager-management must appear in the public articles

Arizona defaults to member management unless the articles of organization provide for one or more managers (A.R.S. § 29-3407). The articles must state the management structure and disclose the people specified in A.R.S. § 29-3201(B)(4). This means a private agreement alone is not the statutory switch to manager management.

In a member-managed LLC, each member handles ordinary business and acts as an ordinary-course agent. In a manager-managed LLC, managers hold those roles and membership alone does not create agency (A.R.S. § 29-3301). A majority in interest resolves ordinary member differences, while a majority of managers resolves manager differences (A.R.S. § 29-3407).

Profit interests govern votes, but interim distributions are equal

"Majority in interest" means members holding a majority of profit interests, measured through their rights to share in dissolution distributions after return of contributions (A.R.S. § 29-3102). That is not automatically one vote per person or a raw capital-contribution percentage.

The economic default points another direction: interim distributions are equal shares among members and dissociated members, adjusted for effective transfers and charging orders (A.R.S. § 29-3404). Issuing a new transferable interest and amending the agreement require all-member approval under the default rules (A.R.S. § 29-3407).

A transferee gets the transferred distribution right and limited information connected to that right, but no management rights merely from the transfer (A.R.S. § 29-3502). Admission as a member remains a separate step.

Arizona permits broad duty changes but preserves specific floors

A.R.S. § 29-3105 permits an agreement to expand, limit, or eliminate loyalty, care, and other fiduciary duties and related liability. It nevertheless preserves the contractual obligation of good faith and fair dealing and the duty and liability floor for wilful or intentional misconduct. The agreement also cannot unreasonably restrict information or member-action rights, vary specified court-dissolution grounds, or reduce distribution protections in a way that harms outsiders.

A.R.S. § 29-3409 states the default loyalty, care, disclosure, and good-faith standards. A.R.S. § 29-3410 requires company records and protects member and manager access subject to reasonable conditions. A.R.S. § 29-3701 preserves the specified impracticability, deadlock, illegal or fraudulent conduct, and serious agreement-or-loyalty-breach dissolution routes.

Amendment is unanimous by default and the agreement remains private

All members must approve an amendment under A.R.S. § 29-3407 unless the agreement supplies another method. If it requires a nonparty's approval or satisfaction of a condition, A.R.S. § 29-3107 makes an amendment ineffective without it.

The operating agreement is not the public filing. It controls internally over a conflicting filed record, while the filed record controls as to another person who reasonably relies on it. The LLC must keep all current and prior written agreements and amendments, but an oral or implied agreement does not become invalid merely because no written copy exists (A.R.S. § 29-3410).

What trips people up

The articles choose the management structure. An agreement can describe manager powers, but the public articles must state that the LLC is manager-managed.

Voting and distributions use different defaults. Ordinary member voting follows profit interests; interim distributions are equal shares.

Broad duty flexibility is not unlimited. Good faith and the wilful-or-intentional-misconduct floor cannot be eliminated.

Common questions

Must an Arizona operating agreement be written or signed?

No. A.R.S. § 29-3102 recognizes oral, implied, electronic-record, and combined agreements.

Is a sole-member agreement enforceable?

Yes. The definition expressly includes a sole member, and A.R.S. § 29-3106 recognizes sole-member preformation terms that become the agreement when the LLC forms.

Does transferring an interest transfer voting rights?

No. A.R.S. § 29-3502 transfers distribution rights and limited related information, not management.

Statutes and sources

• A.R.S. §§ 29-3102, -3105 to -3107, -3201, -3301, -3401, -3404, and -3407 — definition, form, scope, assent, preformation effect, filing priority, formation, authority, admission, distributions, management, voting, and amendment. Official Arizona Legislature pages (accessed 2026-07-26).
• A.R.S. §§ 29-3409 to -3410, -3502, and -3701 — duties, information and records, transfer rights, and judicial dissolution. Official Arizona Legislature pages (accessed 2026-07-26).