An operating agreement in Arizona is a written agreement that governs the operations and business relationships of a limited liability company. This type of operating agreement is important because it sets forth the rights and obligations of the members and managers of the LLC and provides a foundation for problem solving in the business.
An operating agreement covers several different areas related to the business and is an important indication that the LLC has its own identity and is to be treated separately from its members and managers. This is important for purposes of personal asset protection. Other areas include the percentage interest each member, compensation paid to members for their business interest in the LLC, voting rights, how the LLC is managed (member-managed or manager-managed), the roles and responsibilities of the members/managers, how a membership interest may be lost, dispute resolution, how to transfer membership interests and requirements for new members to be added.
While there are basic provisions to include in an operating agreement, a customized operating agreement that anticipates potential issues that may arise and how to deal with those issues may be a key component in mitigating the problems that arise from such issues. It also ensures that business owners exercise more control over their business and that the business is governed by their own customized rules. If you have questions about getting a customized operating agreement for your LLC, please call Durfee Law Group at 480.324.8000.
A clear and concise operating agreement can sometimes mean the difference between success and failure in your LLC.
What Is an Operating Agreement for an LLC?