Article 1 - Formation, Name, and Registered Office
1.1 Formation. The Company was formed as a limited liability company under the Arizona Limited Liability Company Act, A.R.S. § 29-3101 et seq. (the "Act" or "Arizona LLC Act" - the 2019 Act, effective January 1, 2020), by the filing of Articles of Organization with the Arizona Corporation Commission on [[Formation Date]].
1.2 Name. The name of the Company is [[LLC Full Legal Name]], LLC. The Company may conduct business under any other name permitted by the Act and approved by the Members or Manager.
1.3 Principal Office. The principal office of the Company shall be at [[Principal Office Street Address, City, Arizona ZIP]], or at such other place as the Members or Manager may designate from time to time.
1.4 Registered Agent and Office. The registered agent and registered office of the Company in the State of Arizona shall be as set forth in the Articles of Organization or as amended from time to time with the Arizona Corporation Commission. The initial registered agent is [[Registered Agent Full Legal Name or Entity]] at [[Registered Office Address]].
1.5 Term. The term of the Company shall continue until dissolved in accordance with this Agreement or the Act.
Article 2 - Purpose
The purpose of the Company is to engage in any lawful business or activity for which limited liability companies may be organized under the Act and to do all things necessary, incidental, or appropriate in connection therewith, including but not limited to [[describe primary business, e.g., real estate investment and management, professional services, technology development, or "any lawful purpose"]].
Article 3 - Members, Capital Contributions, Percentage Interests, and Capital Accounts
3.1 Members. The initial Members of the Company and their respective Percentage Interests (or Units) and capital contributions are set forth on Schedule A. Additional Members may be admitted only as provided in this Agreement.
3.2 Capital Contributions. Each Member has contributed or agrees to contribute the capital set forth opposite such Member's name on Schedule A, in the form of cash, property, services, or promissory notes as described. No interest shall accrue on any capital contribution. No Member is required to make additional capital contributions unless approved by the required vote of Members.
3.3 Percentage Interests / Units. Ownership interests in the Company are expressed as Percentage Interests (or Units) as shown on Schedule A. Percentage Interests may be adjusted upon admission of new Members, additional contributions, or transfers in accordance with this Agreement.
3.4 Capital Accounts. Capital accounts shall be maintained for each Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv) (the "704(b) capital account rules"). The capital account of each Member shall be:
(a) Increased by (i) the amount of money contributed, (ii) the fair market value of property contributed (net of liabilities), and (iii) the Member's share of Company profits and income;
(b) Decreased by (i) the amount of money distributed, (ii) the fair market value of property distributed (net of liabilities), and (iii) the Member's share of Company losses and deductions.
Upon liquidation, distributions shall be made in accordance with positive capital account balances to the extent required by the Treasury Regulations.
3.5 No Right to Return of Capital. No Member shall have the right to demand or receive a return of any capital contribution except upon dissolution and liquidation of the Company or as otherwise expressly provided in this Agreement.
Article 4 - Management Structure (Member-Managed or Manager-Managed)
4.1 Election of Management Structure. The Company shall be managed as (check one):
[ ] Member-Managed. Management of the Company shall be vested in the Members. Each Member shall have the authority to bind the Company in the ordinary course of business, subject to the voting thresholds and reserved matters in this Agreement.
[ ] Manager-Managed. Management of the Company shall be vested in one or more Managers. The initial Manager(s) are: [[Manager Name(s)]]. Managers shall be appointed, removed, or replaced by vote of the Members holding a [[majority / supermajority / specified %]] of the Percentage Interests. A Manager need not be a Member.
4.2 Authority of Managers (if Manager-Managed). The Manager(s) shall have full, exclusive, and complete authority and discretion in the management and control of the business and affairs of the Company for the purposes stated in this Agreement, including the power to execute contracts, open bank accounts, hire and fire employees and agents, and take any action that is not a Major Decision.
4.3 Major Decisions / Reserved Matters. The following actions require the affirmative vote or written consent of Members holding at least [[75% / unanimous / other specified threshold]] of the Percentage Interests (or such higher threshold as required by the Act for certain actions):
(a) Admission of a new Member or issuance of additional Percentage Interests;
(b) Sale, lease, or other disposition of all or substantially all of the Company's assets;
(c) Merger, consolidation, conversion, or reorganization of the Company;
(d) Amendment of this Agreement or the Articles of Organization (except ministerial amendments);
(e) Incurring or guaranteeing debt in excess of $[[Amount]] in a single transaction or series;
(f) Voluntary dissolution or winding up of the Company;
(g) Entering into any transaction with a Member or Manager (or affiliate) other than on arm's-length terms;
(h) Changing the Company's tax classification election;
(i) Any other action that would require unanimous consent under the Act or that is designated as a Major Decision by the Members.
Ordinary business decisions may be made by [[majority of Percentage Interests / Manager(s)]].
4.4 Meetings and Action by Written Consent. Meetings of Members or Managers may be called by any Member or Manager upon [[5 / 10]] days' written notice (or shorter if all consent). Action may be taken without a meeting by written consent of the required percentage of Members or Managers.
Article 5 - Allocations of Profits, Losses, and Distributions
5.1 Allocation of Profits and Losses. Profits and losses of the Company shall be allocated among the Members in proportion to their Percentage Interests, except as otherwise required by the Code or Treasury Regulations (including qualified income offset, minimum gain chargeback, and other 704(b) provisions).
5.2 Tax Allocations. Allocations for tax purposes shall be made in accordance with the Members' interests in the Company as determined under Treas. Reg. § 1.704-1(b), consistent with the maintenance of capital accounts.
5.3 Distributions. The Company may make distributions of available cash or other property at such times and in such amounts as the Manager(s) (or Members in a member-managed company) shall determine, subject to any reserves for working capital, debts, or anticipated expenses. Distributions shall be made in proportion to Percentage Interests unless otherwise agreed in writing.
5.4 Tax Distributions. To the extent the Company has taxable income allocated to a Member, the Company shall, to the extent of available cash and at the discretion of the Manager/Members, make tax distributions sufficient for Members to pay their estimated federal and state income tax liabilities attributable to Company income, at the highest marginal rates.
Article 6 - Voting Thresholds and Reserved Matters
Voting on all matters shall be by Percentage Interest (one vote per unit or proportional). The default rule under the Act is majority vote of the Percentage Interests for most matters; this Agreement overrides defaults where specified. Unanimous consent of all Members is required for any amendment that would disproportionately and adversely affect a Member's economic rights or liability, or as otherwise required by the Act.
Article 7 - Transfer of Interests; Right of First Refusal; Consent Requirements
7.1 Restrictions on Transfer. No Member may sell, assign, transfer, pledge, encumber, or otherwise dispose of all or any portion of such Member's Percentage Interest (a "Transfer") without the prior written consent of [[a majority / all other Members / Manager]], except for Transfers to a Member's spouse, children, or family trust for estate planning purposes (a "Permitted Transfer"), which shall not require consent but shall be subject to the other terms of this Agreement.
7.2 Right of First Refusal (ROFR). Before any Member (a "Transferring Member") may Transfer any Interest to a third party (other than a Permitted Transfer), the Transferring Member shall give written notice to the Company and the other Members (the "ROFR Notice") specifying the terms of the proposed Transfer. The Company and/or the other Members shall have the right, exercisable within [[15 / 30]] days after receipt of the ROFR Notice, to purchase all (but not less than all) of the Interest proposed to be transferred on the same terms and conditions. If not exercised, the Transferring Member may complete the Transfer on the stated terms within [[60]] days, subject to the transferee's agreement to be bound by this Agreement.
7.3 Admission of Transferee. No transferee shall be admitted as a Member with voting or other rights unless and until the transferee executes a joinder to this Agreement and the transfer is approved as required herein. Economic rights may be assigned without admission as a Member.
7.4 Statutory References. The restrictions in this Article are intended to comply with and supplement A.R.S. §§ 29-3401 et seq. (transfer of transferable interests and admission of transferees under the Arizona LLC Act).
Article 8 - Dissociation, Death of Member, and Buy-Sell Triggers
8.1 Dissociation. A Member shall be dissociated from the Company upon the occurrence of any event set forth in A.R.S. § 29-3601 or this Agreement, including voluntary withdrawal (if permitted), expulsion, bankruptcy, or death (for individuals) or dissolution (for entities).
8.2 Effect of Dissociation. Upon dissociation, the dissociated Member (or successor) shall have only the rights of an assignee of the economic interest unless the remaining Members unanimously agree to admit the successor as a Member.
8.3 Death or Incapacity of Member. Upon the death or incapacity of an individual Member, the deceased Member's estate or legal representative shall have only assignee rights unless admitted as a Member by unanimous consent of the remaining Members. The remaining Members may elect to purchase the deceased Member's Interest at fair market value (determined by agreement or appraisal) pursuant to a buy-sell provision or separate agreement.
8.4 Buy-Sell Triggers. The Members may enter into a separate buy-sell agreement addressing death, disability, retirement, divorce, bankruptcy, or other triggering events. In the absence of such agreement, the Interest of a dissociated Member shall be purchased only if the Company or remaining Members elect to do so.
Article 9 - Dissolution and Winding Up
9.1 Events of Dissolution. The Company shall dissolve and its affairs shall be wound up upon the first to occur of:
(a) The written consent of all Members;
(b) The entry of a decree of judicial dissolution under the Act;
(c) The sale or other disposition of all or substantially all of the Company's assets;
(d) The expiration of the term, if any, stated in the Articles;
(e) Any other event requiring dissolution under the Act.
9.2 Winding Up. Upon dissolution, the Manager or a liquidating trustee shall wind up the affairs of the Company, pay or provide for all liabilities, and distribute remaining assets to the Members in accordance with positive capital account balances (after allocation of gain or loss on liquidation) or as otherwise required by the Act and Treasury Regulations.
9.3 Certificate of Termination. After winding up, the Company shall file a Certificate of Termination or Articles of Dissolution with the Arizona Corporation Commission as required by the Act.
Article 10 - Tax Classification and Elections
10.1 Default Classification. Unless the Company elects otherwise, the Company shall be classified for federal and state tax purposes as:
- A disregarded entity if there is one Member (single-member LLC); or
- A partnership if there are two or more Members.
10.2 S Corporation Election. The Members may cause the Company to elect to be taxed as an S corporation under IRC § 1361 by filing Form 2553 with the IRS, provided all eligibility requirements are met (including having no more than 100 shareholders, only eligible shareholders, one class of stock, etc.). The election, if made, shall be noted on Schedule A or by separate written consent.
10.3 Check-the-Box Election. The Company may file Form 8832 to elect classification as a corporation or other permitted classification.
10.4 Community Property Note for Married Single-Member LLCs. If the Company is a single-member LLC and the sole Member is married and resides in Arizona (a community property state), the Member's spouse may have a community property interest in the membership interest. To preserve limited liability and single-member status, the Member and spouse should consider executing a separate agreement or transmutation agreement confirming that the membership interest is the Member's separate property, or take other steps as advised by tax and legal counsel. Failure to address community property issues may affect tax treatment, creditor protection, and estate planning.
10.5 Tax Matters. The Members or Manager shall designate a Partnership Representative (or Tax Matters Partner for pre-2018 rules) with authority to represent the Company in tax matters under the Bipartisan Budget Act of 2015 and applicable Arizona rules. Each Member agrees to provide information reasonably requested for tax returns and audits.
Article 11 - Indemnification and Limitation of Liability
11.1 Indemnification. The Company shall indemnify and hold harmless each Member, Manager, officer, and agent of the Company (each an "Indemnified Person") to the fullest extent permitted by the Act and other applicable law from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or relating to the business or affairs of the Company, except that no Indemnified Person shall be entitled to indemnification for any loss resulting from fraud, bad faith, willful misconduct, or a knowing violation of law.
11.2 Limitation of Liability. To the maximum extent permitted by the Act, no Member or Manager shall be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a Member or Manager. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs shall not be grounds for imposing personal liability on the Members or Managers.
11.3 Insurance. The Company may purchase and maintain insurance on behalf of any Indemnified Person against any liability asserted against such person in such capacity.
Article 12 - Records, Accounting, and Fiscal Year
12.1 Records. The Company shall keep at its principal office (or other location designated by the Manager/Members) complete and accurate books and records of account, a current list of Members and their addresses and Percentage Interests, a copy of this Agreement and the Articles, and copies of the Company's federal, state, and local income tax returns for the six most recent years.
12.2 Fiscal Year. The fiscal year of the Company shall be the calendar year unless the Members or Manager select a different fiscal year permitted by the Code.
12.3 Reports. The Company shall furnish to each Member, upon reasonable request, such financial statements and tax information as may be required for the Member's tax reporting or as otherwise agreed.
Article 13 - Amendments
This Agreement may be amended only by a written instrument signed by Members holding the percentage of Percentage Interests required for the type of amendment under Article 4 (or unanimously for amendments affecting economic rights disproportionately). The Manager may make ministerial or administrative amendments without Member consent if they do not affect substantive rights.
Article 14 - Miscellaneous
14.1 Governing Law. This Agreement and the rights of the Members shall be governed by and construed in accordance with the laws of the State of Arizona, including the Arizona LLC Act (A.R.S. Title 29, Chapter 7), without regard to conflicts of law principles.
14.2 Entire Agreement. This Agreement (including Schedule A and any exhibits) constitutes the entire agreement among the Members with respect to the subject matter hereof and supersedes all prior agreements, understandings, and negotiations.
14.3 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. The invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable.
14.4 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and electronic signatures shall be deemed valid and binding.
14.5 Notices. All notices under this Agreement shall be in writing and delivered by email (with read receipt), certified mail, or overnight courier to the addresses on Schedule A or such other address as a Member may designate.
14.6 Headings. Headings are for convenience only.
Signatures
IN WITNESS WHEREOF, the Members have executed this Operating Agreement as of the Effective Date.
MEMBERS:
[[Member 1 Full Legal Name]]
Signature: _______________________________
Date: _______________________________
[[Member 2 Full Legal Name]]
Signature: _______________________________
Date: _______________________________
(Attach additional signature pages for additional Members as needed.)
Schedule A - Members, Capital Contributions, Percentage Interests, and Tax Information
| Member Name / Entity | Capital Contribution (Cash or Property Description) | Percentage Interest / Units | Address for Notices | Tax ID / Notes |
|----------------------|-----------------------------------------------------|-----------------------------|---------------------|----------------|
| [[Member 1]] | $[[Amount]] or [[description of property contributed]] | [[XX.XX%]] or [[X Units]] | [[Address]] | [[SSN/EIN]]; initial Manager? |
| [[Member 2]] | $[[Amount]] | [[XX.XX%]] | [[Address]] | [[EIN]] |
| ... | | | | |
Initial Tax Classification Election: [[Disregarded entity (single-member) / Partnership (multi-member) / S corporation election on Form 2553 dated [[Date]] / Other - specify]].
Community Property Acknowledgment (if applicable): If any Member is married and the membership interest may be community property, the Member represents that appropriate steps have been taken (or will be taken) to address community property implications for liability protection and tax purposes.
Registered Agent Confirmation: The registered agent and office listed in the Articles of Organization (or as amended) remain current as of the Effective Date.
> Template - not professional advice. Verify all figures, clauses, and required disclosures against current law for the applicable jurisdiction. Invented inputs are tagged as [[merge fields]]. Single-member and multi-member LLCs have different tax and liability considerations. This Agreement does not replace the need for legal and tax advice tailored to your situation.
Primary Sources (as of June 2026):
- Arizona Revised Statutes Title 29, Chapter 7 (Arizona Limited Liability Company Act - 2019 Act, A.R.S. §§ 29-3101 et seq.), including provisions on formation, operating agreements (A.R.S. § 29-3105), management, transferable interests (A.R.S. §§ 29-3401 et seq.), dissociation, and dissolution.
- Treas. Reg. § 1.704-1(b) (capital account maintenance, substantial economic effect, and tax allocations).
- Internal Revenue Code Subchapter K (partnership taxation) and IRC § 1361 et seq. (S corporation rules).
- Arizona Corporation Commission filing requirements and forms.
Operating agreements may override many default rules under the Act. Married members of single-member LLCs in community property states should address separate vs. community characterization. Have this Agreement reviewed by Arizona-licensed counsel and a qualified tax advisor before execution or material funding. Update Schedule A promptly upon any change in Members, contributions, or management.
