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Amending Your LLC


Amending Your LLC Print
Making updates to your original Articles of Organization

If there are  any descrepencies between your current LLC setup and the  information in your Articles of Organization, be sure to read this page!

What is an Amendment and why do I need file one?

An Article of Amendment is filed to make a formal change to the original Articles of Organization on file with the AZ Corporation Commission (ACC). An LLC must amend its Articles of Organization if:

  • There was a statement in the original Articles of Organization that was false or erroneous at the time of filing
  • Any arrangements or facts have changed since the original Articles of Organization were filed.

For instance, the following cases would require amendment to the Articles of Organization within 30 days of the event:

  • The company name changes
  • Management of the LLC is reserved to the members and there is a change in the persons who are members
  • Management of the LLC is vested in a manager (or multiple managers) and there is a change in the person who is the manager of the LLC (also applies to LLCs with multiple managers)
  • Management of the LLC is vested in a manager (or multiple managers) and there is a change in the member(s) who own at least 20% interest in the profits or capital of the LLC

What is a Statement of Change?

A Statement of Change also makes changes or updates to the original Articles of Organization. In certain cases, a Statement of Change can be filed with the ACC instead of Articles of Amendment.  This is less costly and only applicable in the following cases:

  • Change of Statutory Agent
  • Change of Statutory Agent’s address
  • Change of Address for any existing member/manager previously reported to the ACC

What is the process to file an Amendment?

1. Review the Operating Agreement 2. File an Article of Amendment with the ACC 3. Publication & Affidavit 4. Inform the appropriate agencies of the changes 5. Amend the Operating Agreement 6. Create additional documentation 7. Prepare Minutes or written resolution 8. Change company material
1. Review the Operating Agreement – Review the company’s Operating Agreement (OA) to determine the appropriate procedure and vote required to make an amendment.  If the company does not have an Operating Agreement, then the Arizona statute must be reviewed for the appropriate voting requirement.  Note: An amendment that is solely for the purpose of correcting a false or inaccurate statement in the Articles of Organization may be filed at any time by a manager (if manager-managed) or a member (if member-managed).

2. File an Article of Amendment with the ACC. The Articles must be signed by a manager (if the LLC is manager managed) or a member (if the LLC is member managed).

3. Publication & Affidavit – In some circumstances, the Articles of Amendment must be published in a newspaper of general circulation in the county of the LLC’s known place of business for three (3) consecutive publications within sixty (60) days after the Articles of Amendment are filed with the ACC.  Upon completion of the publication, the publisher will provide an Affidavit of Publication confirming the dates of publication.  This Affidavit must be filed with the ACC within 90 days of filing of the Articles.

4. Inform the appropriate agencies of the changes.  For instance, if the company changes its address, the company needs to update  its address with all licensing agencies.

  • If changing your business or DBA name, mailing address, and/or business location, the AZ Department of Revenue (AZDOR) allows you to update your records for all applicable tax, use, and withholding licenses through the AZDOR by using this form (.pdf).
  • If changing your business name, the IRS requirements (based on your tax filing status) can be found here.
  • If changing your business or DBA name, Contact your customers, vendors, bank, licensing agencies, and all third parties with whom you conduct business to put them on notice that you have changed your company name.   You can prepare a written notice to send to them; be sure you keep a copy of the letter.

5. Amend the Operating Agreement – Once the ACC approves the company’s Amendment, the company should amend their OA with the new change (i.e. new name, members  added, members removed, etc.).

6. Create additional documentation – Depending on the type of Amendment, additional documentation may be  required.  It is very important to document any change in ownership for business, legal and tax reasons.  If you have any questions, please consult a business attorney. Examples:

  • If a new member is added to the LLC, a Subscription Agreement should document the interest being acquired and the consideration paid for the interest.
  • If a member is exiting the company and the company is reacquiring (redeeming) the member’s interest, a Redemption Agreement should document the terms of the redemption.
  • If a member is exiting the company and another member is acquiring the exiting member’s interest, an Assignment should document the terms of the assignment.  Some of the important terms include: the percentage of the interest being transferred and the consideration paid for the interest.

It is very important for the company to consider any security issues that may be involved by selling or assigning the interest to a new member.  For a detailed discussion of securities issues, click here.

7. Prepare Minutes or written resolution – The members or managers should hold a meeting and prepare minutes or a written resolution which details the action that was taken pertaining to the amendment.  Examples:

  • If a new member is added to the LLC: 1) the terms of the consideration paid by the new member to acquire the interest and 2) the percentage of ownership that is being acquired. 
  • If a member is exiting the company and another member is acquiring the exiting member’s interest: 1) the assignment of the interest, 2) the removal of the member exiting, 3) the addition of the new member, 4) the terms of the consideration paid by the new member to acquire the interest, and 5) the percentage of ownership that is being acquired.

The Minutes/Resolution should approve:

  • The Articles of Amendment
  • The amendment to the Operating Agreement
  • (as appropriate) the Subscription Agreement, Redemption Agreement, Assignment, or any additional documentation prepared.

The Minutes/Resolution should be signed in accordance with the Operating Agreement; if there is no OA or it does not provide direction in this case, all members must sign including new members.

8. Change company material – As appropriate, update your company material to reflect a new name/address, including your letterhead, business cards, invoices, marketing material, website, and all other materials and documents that contain the relevant information.

Consequences for Failure to Amend

If the LLC fails to amend its Articles of Organization as required by statute, the LLC may not file a lawsuit in the name of the LLC in any court in Arizona until it has first amended its Articles of Organization.  As a practical matter, this means if the LLC wants to sue a third party for a breach of contract claim or to collect on an account or for any reason, it cannot do so until it amends its articles. 

Under Arizona statute, a member will be protected from liability if the Articles are amended within thirty (30) days of the change of facts or circumstances requiring the amendment.  However, if a person suffers a loss by relying on a false statement contained in the Articles of Organization, the person may recover damages from the LLC.  Additionally, the injured party may recover damages from any person who executes the Articles, causes another to execute the Articles or any “responsible person” if that person knew or should have known the statement was false at the time the Articles were executed.  A person who relies on a false statement may also recover damages from any responsible person who knows, or reasonably should have known, that any arrangement or fact described in the Articles has changed, making the statement inaccurate within a sufficient time before the statement was relied on to have enabled the responsible person to amend the Articles.  A “responsible person” is defined as a manager of a manger managed LLC or a member of a member managed LLC.  The important lesson to take from this is make sure you amend your articles within thirty (30) days of the change of facts or circumstances requiring the amendment!

~~  Amend your LLC now!  ~~

If you would like our assistance to file either an Article of Amendment or a Statement of Change, please contact us.