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Setting Up An LLC

Setting Up An LLC Print
A Limited Liability Company (“LLC”) may be formed in Arizona by meeting the requirements of the Arizona LLC Act (the “Act”).  The Act indicates that an LLC may be formed for any lawful purpose, except insurance and banking.  There are 4 major steps to creating the LLC structure:

  1. Filing the Articles of Organization
  2. Publishing the Articles of Organization or a Notice
  3. Affidavit of Publication
  4. Operating Agreement

Filing the Articles of Organization
The LLC is formed by preparing and filing Articles of Organization with the Arizona Corporation Commission (ACC), which is the agency that regulates LLCs and Corporations.
The Articles of Organization must provide the ACC with the following information:

Any member, manager or third party can sign the Articles of Organization.
If for any reason the Articles of Organization fail to meet the statutory requirements, the ACC will return the Articles to the person filing the Articles and they will have 20 days to revise and re-file them.

  • If the Articles are corrected in this time frame, the Articles will “relate back” to the original file date, which gives the LLC the benefit of the earliest file date.
  • If the Articles are not corrected within the 20 day window, then the existence of the LLC terminates at the end of the 20-day period.

All of the information contained in the Articles of Organization is public record.  Once the Articles are filed with the ACC, the information and a scan of the original Articles will be displayed on the ACC’s website.  The public can access, view and download the Articles from the ACC’s web site.

Publishing the Articles of Organization or a Notice

The LLC has the choice of either publishing the Articles of Organization or a Notice.  Within 60 days of ACC approval, the Articles or Notice must be published in a paper of general circulation in the county of the known place of business of the LLC for three consecutive publications.
If publishing the Articles, they can be published verbatim.

If publishing a Notice, it must contain the following information: 

  1. Name of the LLC
  2. Name and street address of the statutory agent
  3. Statement that the management is vested in either the managers or reserved to the members
  4. If the LLC is member-managed: the names and address of all of the members
  5. If the LLC is manager managed: the names and address of the managers and the members with a 20% or greater interest in the capital or profits of the LLC.

Affidavit of Publication

Upon completion of the publication, the publisher will provide an Affidavit of Publication confirming the dates of publication.  The Affidavit of Publication must be filed with the ACC within 90 days of filing of the Articles.  Once the Affidavit of Publication is filed with the ACC, the legal requirements of forming the LLC are complete.

Operating Agreement

The LLC is governed by the Operating Agreement (OA); the OA is analogous to the bylaws of a Corporation or a Partnership Agreement for a Partnership.

If the members of an LLC do not prepare an Operating Agreement to govern the business affairs of the LLC or if the Operating Agreement fails to address a particular issue, then the Arizona Statute’s default provisions regarding LLCs will govern the members.  It is important to create an Operating Agreement that addresses all the issues that are important for your business affairs to make sure the members are not subject to the default provisions of the Arizona Statute.