Arizona Limited Liability Company Act Requirements

The Arizona Limited Liability Company Act requirements, found at A.R.S. 29-3101 and the sections that follow, set out what you must do to form and run an LLC in the state: file Articles of Organization with the Arizona Corporation Commission, keep a statutory agent at an Arizona street address, publish notice of formation unless your agent sits in Maricopa or Pima County, and stay current on filings and fees once you’re up and running. The Act took effect in 2019 and replaced Arizona’s older LLC statutes with rules closer to the Revised Uniform Limited Liability Company Act.

Forming the LLC

Formation begins with filing Articles of Organization with the Arizona Corporation Commission (ACC). The articles must list the LLC’s name, the name and street address of its statutory agent, a principal address, and whether the company will be member-managed or manager-managed.¹ The filing fee is $50, or $85 if you want expedited processing.²

The name itself has two rules. It has to include “Limited Liability Company,” “LLC,” or one of the other abbreviations the statute allows. And it has to be distinguishable from every other entity name already on file with the ACC or the Secretary of State. Swapping an “Inc.” for an “LLC” at the end of an existing name does not make it distinguishable.³

Publication Requirement

Once the ACC approves your articles, most Arizona LLCs have to publish a notice of formation in a newspaper of general circulation in the county where the statutory agent’s street address sits. The notice runs for three consecutive publications and must be completed within 60 days of formation.¹ You can file an affidavit of publication with the ACC afterward, though it isn’t strictly required.

LLCs whose statutory agent is in a county with a population above 800,000 are exempt. In practice that currently covers only Maricopa and Pima counties, where the ACC enters the formation information into its public database instead.¹ If your agent is anywhere else in the state, publication is on you.

Statutory Agent

Every Arizona LLC has to designate and continuously maintain a statutory agent. The agent’s job is narrow: accept service of process and forward it to the company.⁴ The agent must be an Arizona resident or a business entity authorized to operate in Arizona, and must have a physical street address in the state. A P.O. box doesn’t qualify.⁵

When the agent’s address changes or you appoint a new agent, file a Statement of Change with the ACC. The fee is $5 for standard processing, $40 for expedited.² Letting the agent lapse for 60 straight days is one of the grounds for administrative dissolution, so this is not something to let slide.⁶

Operating Agreement

Arizona does not require an LLC to have a written operating agreement. It does give the agreement, if you write one, enormous power. Under A.R.S. 29-3105, when the operating agreement conflicts with a default rule in the LLC Act, the agreement wins, with only a short list of exceptions.⁷ That covers profit-and-loss allocations, voting thresholds, how new members are admitted, and dispute procedures.

Without one, the defaults run the company. The most dangerous default is distributions: before dissolution, the Act splits them in equal shares among members regardless of how much capital each one put in.⁸ If one member invested $400,000 and another put in $50,000, the equal-share default will come as a shock. An operating agreement is the only way to change that.

There are limits on what the operating agreement can do. It cannot eliminate the obligation of good faith and fair dealing, cut off members’ rights to inspect company records, or remove the duty to refrain from intentional misconduct.⁷ It also cannot alter the statutory agent rules or the ACC filing requirements.

Member-Managed or Manager-Managed

Arizona LLCs are member-managed by default. Unless the Articles of Organization specifically say the company will be run by one or more managers, every member has equal authority to act for the business.⁹ That’s fine when every owner wants to be hands-on, awkward when some are passive investors who would rather not sign contracts.

In a member-managed LLC, routine decisions follow majority-in-interest voting. Extraordinary matters, such as amending the operating agreement, admitting a new member, or authorizing acts outside the stated purpose, require unanimous consent.⁹

A manager-managed structure moves day-to-day authority to one or more designated managers, who do not have to be members. Managers decide ordinary-course matters by majority vote among themselves. Members still hold veto power over major structural changes like amending the operating agreement or switching management type.⁹

Liability Protection

The reason to form an LLC is the liability shield. Under A.R.S. 29-3304, a company’s debts and obligations belong to the company alone. Members and managers are not personally liable for those debts simply because they hold an ownership or management role, and that protection survives dissolution.¹⁰

Arizona reinforces the shield in a way many states don’t. Failing to observe corporate-style formalities, like holding annual meetings or keeping formal minutes, is explicitly not a ground for personal liability.¹⁰ The shield still has limits. Courts can pierce it when an LLC is used to commit fraud, or when members commingle personal and business funds so thoroughly that the company has no real independent existence. Personal guarantees, which lenders and landlords routinely demand, create a direct obligation for the guarantor that the LLC form cannot block.

Charging Order Protection

If a member gets hit with a personal judgment unrelated to the LLC, say from a car accident or a credit card suit, the creditor cannot grab the member’s ownership interest or force the company to liquidate. The creditor’s exclusive remedy is a charging order, which redirects any distributions that would otherwise go to the debtor-member until the judgment is paid. The creditor gets no voting rights, no management role, and no power to force a distribution. The member, or the other members, can also pay off the judgment directly to clear the charging order.¹¹

Annual Report and Ongoing Compliance

Every Arizona LLC has to file an annual report with the ACC. The report is due by the end of the anniversary month of formation, and there is no grace period. Miss it and you’re looking at late fees, loss of good-standing status, and eventually administrative dissolution.

Administrative dissolution can happen when an LLC fails to pay required fees within 60 days of the due date, goes 60 consecutive days without a statutory agent or principal address, fails to update the ACC after its agent changes, or doesn’t answer interrogatories from the commission.⁶ An administratively dissolved LLC still exists as an entity, but it can only wind down its affairs or apply for reinstatement.

Reinstatement is available for up to six years after the effective date of administrative dissolution. You have to show that the grounds for dissolution are cured and pay all fees and penalties that were due at dissolution plus any that would have accrued while the company was dissolved. If another entity took the LLC’s name in the meantime, you also have to file articles of amendment adopting a new name.¹²

Closing the Business

An Arizona LLC can dissolve voluntarily, by court order, or through administrative action. Voluntary dissolution follows whatever process the operating agreement spells out. If the agreement is silent, dissolution needs the consent of a majority in interest of the members, as long as those consenting members would be entitled to more than half the value of all assets distributed on liquidation.¹³

Once dissolution is triggered, the LLC enters winding up. During this phase the company pays off its debts, settles its affairs, and distributes any remaining assets to members.¹⁴ The final step is filing Articles of Termination with the ACC. The fee is $35, or $70 expedited.²

A court can order dissolution when the LLC’s activities are unlawful, when members or managers are deadlocked and the company is suffering irreparable harm, or when the people in control have acted fraudulently or wasted company assets.¹³ It’s a last resort when the operating agreement and internal remedies have run out.

1
Arizona Legislature. Arizona Code 29-3201 – Formation of Limited Liability Company; Articles of Organization
2
Arizona Corporation Commission. Schedule of Fees – LLCs
3
Arizona Legislature. Arizona Code 29-3112 – Permitted Names
4
Arizona Legislature. Arizona Code 29-3115 – Statutory Agent
5
Arizona Corporation Commission. Instructions for Foreign Registration Statement – Section: What Is a Statutory Agent?
6
Arizona Legislature. Arizona Code 29-3708 – Administrative Dissolution
7
Arizona Legislature. Arizona Code 29-3105 – Operating Agreement; Scope, Function and Limitations
8
Arizona Legislature. Arizona Code 29-3404 – Sharing of and Right to Distributions Before Dissolution
9
Arizona Legislature. Arizona Code 29-3407 – Management of Limited Liability Company
10
Arizona Legislature. Arizona Code 29-3304 – Liability of Members and Managers
11
Arizona Legislature. Arizona Code 29-3503 – Charging Order
12
Arizona Legislature. Arizona Code 29-3709 – Reinstatement
13
Arizona Legislature. Arizona Code 29-3701 – Events Causing Dissolution
14
Arizona Legislature. Arizona Code 29-3702 – Winding Up