Single-Member LLC Operating Agreement — Arizona

Single-Member LLC Operating Agreement (ARIZONA)

Quick-Reference Summary

Article I — Formation

1.1 Formation. The Member caused Articles of Organization to be filed with the Arizona Corporation Commission on [__/__/____] under A.R.S. § 29-3201, forming [________________________________] (the "Company") as a domestic limited liability company. ACC Entity ID No.: [________________________________].

1.2 Name. The name of the Company is [________________________________], which complies with A.R.S. § 29-3112 (must contain "limited liability company," "limited company," or an authorized abbreviation such as "L.L.C." or "LLC").

1.3 Principal Office / Known Place of Business. The known place of business in Arizona is:
[________________________________]
[________________________________]

1.4 Statutory Agent. The Arizona statutory agent under A.R.S. § 29-3115:
Name: [________________________________]
Address (Arizona street address, not P.O. Box): [________________________________]
County: ☐ Maricopa ☐ Pima ☐ Other: [____]

1.5 Term. Perpetual unless dissolved under Article VII or by operation of law (A.R.S. § 29-3108).

1.6 Governing Law. This Agreement and the internal affairs of the Company are governed by Arizona law, including A.R.S. §§ 29-3101 to 29-4202.

Article II — Purpose and Powers

2.1 Purpose. The Company is organized for any lawful purpose under A.R.S. § 29-3108, including: [________________________________].

2.2 Powers. The Company has the powers set forth in A.R.S. § 29-3109, including the powers to contract, sue and be sued, acquire and convey property, borrow money, lend money, and conduct business inside and outside Arizona.

Article III — Member (Sole Member)

3.1 Sole Member. The sole member is:
Name: [________________________________]
Address: [________________________________]
(the "Member")

3.2 Initial Capital Contribution.
| Form of Contribution | Agreed Value |
|---|---|
| Cash | $ [____] |
| Property (Schedule A) | $ [____] |
| Services | $ [____] |
| Total | $ [____] |

3.3 Additional Contributions. Under A.R.S. § 29-3403(B), a promise to contribute is enforceable only if in a record signed by the Member. The Member is not otherwise obligated to make further contributions.

3.4 No Personal Liability. Under A.R.S. § 29-3304, the debts, obligations, and other liabilities of the Company are solely the Company's; the Member is not personally liable solely by reason of being a member.

3.5 Separateness Covenants. The Member shall:

• ☐ Maintain Company bank accounts separate from personal accounts;
• ☐ Keep separate Company books and records;
• ☐ Avoid commingling Company and personal property;
• ☐ Hold the Company out to creditors and the public as a separate entity;
• ☐ Sign Company contracts in the Member's representative capacity;
• ☐ Maintain adequate capitalization for foreseeable operations.

Article IV — Management

4.1 Member-Managed. Pursuant to A.R.S. § 29-3407, the Company is member-managed. The Member has full and exclusive authority to manage and control the Company's business.

4.2 Agency Power. Under A.R.S. § 29-3301, the Member is an agent of the Company and has authority to bind the Company in matters in the ordinary course of business. The Company may file a Statement of Authority under A.R.S. § 29-3302.

4.3 Officers (Optional). The Member may appoint officers, who serve at the Member's pleasure.

4.4 Standards of Conduct. Pursuant to A.R.S. § 29-3409, the Member owes the Company the duty of loyalty and the duty of care, subject to the modifications permitted under A.R.S. § 29-3105. As sole member, the Member's compliance is measured against the contractual covenant of good faith and fair dealing.

Article V — Capital Accounts and Distributions

5.1 Capital Account. A single capital account shall be maintained consistent with Treasury Regulation § 1.704-1(b)(2)(iv).

5.2 Allocations. All items of income, gain, loss, deduction, and credit are allocated 100% to the Member.

5.3 Distributions. The Member may cause distributions at any time, subject to the limitations of A.R.S. § 29-3405 (no distribution if the Company would be unable to pay its debts as they become due in the ordinary course of business, or if total assets would be less than total liabilities).

5.4 Tax Status. The Company is a disregarded entity for federal income tax purposes under Treasury Regulation § 301.7701-3 unless an election under IRS Form 8832 or Form 2553 is made. Arizona generally follows federal classification; the Member shall report Company income on Arizona Form 140.

Article VI — Transfer of Interest / Charging Order

6.1 Transferable Interest. A membership interest is personal property; only the transferable interest (the right to receive distributions) is assignable absent the Member's written consent to admit the transferee as a member (A.R.S. §§ 29-3501, 29-3502).

6.2 Transfer. The Member may transfer the Member's transferable interest. A transferee receives only economic rights and is not admitted as a member except by the Member's written consent.

6.3 Charging Order — Exclusive Remedy. Pursuant to A.R.S. § 29-3503, on application by a judgment creditor of the Member, the court may charge the Member's transferable interest with payment of the unsatisfied amount of the judgment. The charging order:

(a) constitutes a lien on the judgment debtor's transferable interest;
(b) entitles the judgment creditor only to distributions that would otherwise be paid to the Member; and
(c) is the exclusive remedy by which a judgment creditor may satisfy a judgment out of the judgment debtor's transferable interest.

6.4 No Foreclosure / No Management Rights. A charging order does not give the creditor management rights and does not entitle the creditor to compel distributions.

Article VII — Dissolution

7.1 Events of Dissolution. The Company shall be dissolved upon the earliest of (a) the Member's written election; (b) an event of dissolution under A.R.S. § 29-3701; or (c) judicial decree.

7.2 Continuation After Death or Incapacity. Upon the Member's death or adjudicated incapacity, the Member's executor, administrator, personal representative, or other legal successor (the "Successor") shall succeed to all of the Member's interest and shall be admitted as a member, consistent with A.R.S. § 29-3504. The Company shall not dissolve solely by reason of the Member's death or incapacity.

7.3 Winding Up. Upon dissolution, the Company shall wind up its affairs (A.R.S. § 29-3702) and distribute assets pursuant to A.R.S. § 29-3707: first to creditors, then to the Member.

7.4 Statement of Termination. A Statement of Termination shall be filed with the ACC under A.R.S. § 29-3703.

Article VIII — State-Specific Provisions

8.1 Publication. Pursuant to A.R.S. § 29-3201(G), within 60 days after the ACC files the Articles of Organization, notice of formation must be published in a newspaper of general circulation in the county of the statutory agent's street address for three consecutive publications.

Exemption (Maricopa and Pima Counties). Under A.R.S. § 10-130(B), if the statutory agent's street address is in Maricopa County or Pima County (each with a population over 800,000), the ACC automatically publishes the notice in its Public Notice Database, and no newspaper publication is required.

The Company hereby identifies its publication status:

• ☐ Statutory agent is in Maricopa or Pima County — ACC database publication; no further action required.
• ☐ Statutory agent is in another Arizona county — Member must publish in a qualified newspaper within 60 days and may file the Affidavit of Publication with the ACC.

8.2 No Annual Report. Arizona does not require LLCs to file annual reports with the ACC; no annual ACC filing fee applies. However, the Company must keep its statutory agent information current via a Statement of Change (A.R.S. § 29-3116) when changes occur.

8.3 Transaction Privilege Tax (TPT). If the Company engages in activities subject to Arizona Transaction Privilege Tax, it shall obtain a TPT license from the Arizona Department of Revenue and file periodic returns.

8.4 No Series LLC. Arizona's 2019 LLC Act does not authorize statutory series LLCs. The Company shall not hold itself out as having internal series with separate liability shields.

8.5 Property Tax / Use Tax. The Company shall comply with all Arizona property tax, use tax, and employer withholding obligations applicable to its activities.

8.6 Statutory Agent — Resignation. If the statutory agent resigns under A.R.S. § 29-3117, the Member shall promptly designate a successor and file a Statement of Change with the ACC.

Article IX — General Provisions

9.1 Entire Agreement. This Agreement is the entire operating agreement under A.R.S. § 29-3105.

9.2 Amendment. Amendments require a written instrument signed by the Member (A.R.S. § 29-3107).

9.3 Severability. If any provision is unenforceable, the remainder continues in effect.

9.4 Indemnification. Pursuant to A.R.S. § 29-3408, the Company shall indemnify and hold harmless the Member to the fullest extent permitted by law.

9.5 Notices. Notices shall be delivered in writing to the Member at the address in Section 3.1.

9.6 Counterparts; Electronic Signatures. Executed counterparts and electronic signatures are valid under the Arizona Electronic Transactions Act, A.R.S. § 44-7001 et seq.

Signature Block

THE COMPANY:

[________________________________], an Arizona limited liability company

By: [________________________________]
Name: [________________________________]
Title: Sole Member
Date: [__/__/____]

THE MEMBER (in individual capacity, acknowledging and adopting this Agreement):

[________________________________]
Name (print): [________________________________]
Date: [__/__/____]

State of Arizona, County of [________________________________]

Acknowledged before me on [__/__/____] by [________________________________].

Notary Public: [________________________________]
Commission No.: [____]
Commission Expiration: [__/__/____]

Pre-Execution Checklist

• ☐ Articles of Organization filed with ACC (Form L010)
• ☐ Name availability confirmed via ACC eCorp
• ☐ Statutory Agent Acceptance (Form M002) executed and filed
• ☐ ACC Entity ID number recorded in this Agreement
• ☐ Publication completed within 60 days OR confirmed exempt (Maricopa/Pima County)
• ☐ Affidavit of Publication retained in Company records (if published)
• ☐ EIN obtained from IRS (Form SS-4)
• ☐ Arizona TPT license obtained where applicable
• ☐ City/local business license obtained where required
• ☐ Separate Company bank account opened
• ☐ Initial contributions documented and deposited
• ☐ Schedule A attached if property contributed
• ☐ Operating Agreement signed, dated, notarized
• ☐ Tax classification confirmed with CPA (disregarded vs. S-corp / C-corp)
• ☐ Insurance bound (general liability / professional / cyber)
• ☐ Statement of Authority filed if needed (A.R.S. § 29-3302)

Sources and References

• Arizona Limited Liability Company Act, A.R.S. §§ 29-3101 to 29-4202: https://www.azleg.gov/arsDetail/?title=29
• A.R.S. § 29-3201 (Formation; publication): https://www.azleg.gov/viewdocument/?docName=https://www.azleg.gov/ars/29/03201.htm
• A.R.S. § 10-130 (Public notice database; Maricopa/Pima exemption)
• Arizona Corporation Commission – LLC Filings: https://azcc.gov/corporations
• ACC Articles of Organization Instructions (L010I): https://azcc.gov/docs/default-source/corps-files/instructions/l010i-instructions-articles-of-organization.pdf
• State Bar of Arizona, Editorial Subcommittee Commentary on the AZ LLC Act (Feb. 2024): https://www.azbar.org/media/gavp0z4r/llc-editorial-subcommittee-comments-combined-rev-2-23-2024-v2.pdf
• Arizona Department of Revenue – TPT: https://azdor.gov/transaction-privilege-tax
• IRS, Single Member Limited Liability Companies: https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies