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_______________________, LLC
An Arizona Limited Liability Company
THIS OPERATING AGREEMENT (“Agreement”) is made and entered into as of
_______________, 20____, by and among _______________, LLC an Arizona Limited
Liability Company (the "Company") and _______________, executing this Agreement
as the sole member of the Company (the "Member") and hereby states as follows:
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, it is agreed as follows:
1. Organization.
1. Formation of LLC.
The Member has formed an Arizona Limited Liability Company named
_______________, LLC by filing the Articles of Organization with the office in the
State of Arizona on _______________, 20____. The operation of the Company
shall be governed by the terms of this Agreement and the applicable laws of the
State of Arizona relating to the formation, operation and taxation of a LLC,
specifically the provisions under Title 29, Chapter 7 (Arizona Limited Liability
Company Act) which set out the guidelines and procedures for the formation and
operation of a LLC hereinafter collectively referred to as the "Statutes." To the
extent permitted by the Statutes, the terms and provisions of this Agreement
shall control in the event there is a conflict between the Statutes and this
2. Purposes and Powers.
a) The purposes of the Company shall be:
(i) _______________________________________________________; and
(ii) To perform or engage in any and all activities and/or businesses for which
limited liability companies may be engaged under the Statutes.
b) The Company shall have all powers necessary and convenient to affect any
purpose for which it is formed, including all powers granted by the Statutes.
3. Duration.
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The Company shall continue in existence until dissolved, liquidated or terminated
in accordance with the provisions of this Agreement and, to the extent not
otherwise superseded by this Agreement, the Statutes.
4. Registered Office and Resident Agent.
The Registered Office and Resident Agent of the Company shall be as
designated in the initial Articles of Organization/Certificate of Organization or any
amendment thereof. The Registered Office and/or Resident Agent may be
changed from time to time. Any such change shall be made in accordance with
the Statutes, or, if different from the Statutes, in accordance with the provisions
of this Agreement. If the Resident Agent shall ever resign, the Company shall
promptly appoint a successor agent.
5. Capital Contributions and Distributions.
The Member may make such capital contributions (each a “Capital Contribution”)
in such amounts and at such times as the Member shall determine. The Member
shall not be obligated to make any Capital Contributions. The Member may take
distributions of the capital from time to time in accordance with the limitations
imposed by the Statutes.
6. Books, Records and Accounting.
a) Books and Records. The Company shall maintain complete and accurate
books and records of the Company's business and affairs as required by the
Statutes and such books and records shall be kept at the Company's
Registered Office and shall in all respects be independent of the books,
records and transactions of the Member.
b) Fiscal Year; Accounting. The Company's fiscal year shall be the calendar
year with an ending month of December.
7. Member's Capital Accounts.
A Capital Account for the Member shall be maintained by the Company. The
Member's Capital Account shall reflect the Member’s capital contributions and
increases for any net income or gain of the Company. The Member’s Capital
Account shall also reflect decreases for distributions made to the Member and
the Member’s share of any losses and deductions of the Company.
8. U.S. Federal / Arizona State Income Tax Treatment.
The Member intends that the Company, as a single member LLC, shall be taxed
as a sole proprietorship in accordance with the provisions of the Internal
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Revenue Code. Any provisions herein that may cause the Company not to be
taxed as a sole proprietorship shall be inoperative.
9. Rights, Powers and Obligations of Member.
a. Authority. __________________, as sole member of the Company, has
sole authority and power to act for or on behalf of the Company, to do any
act that would be binding on the Company, or incur any expenditures on
behalf of the Company.
b. Liability to Third Parties. The Member shall not be liable for the debts,
obligations or liabilities of the Company, including under a judgment,
decree or order of a court.
c. Rights, Powers and Obligations of Manager.
d. The Company is organized as a “member-managed” limited liability
e. The Member is designated as the initial managing member.
f. Ownership of Company Property.
The Company’s assets shall be deemed owned by the Company as an
entity, and the Member shall have no ownership interest in such assets or
any portion thereof. Title to any or all such Company assets may be held
in the name of the Company, one or more nominees or in “street name”,
as the Member may determine.
g. Other Activities.
Except as limited by the Statutes, the Member may engage in other
business ventures of any nature, including, without limitation by
specification, the ownership of another business similar to that operated
by the Company. The Company shall not have any right or interest in any
such independent ventures or to the income and profits derived therefrom.
10. Limitation of Liability; Indemnification.
a) Limitation of Liability and Indemnification of Member.
i. The Member (including, for purposes of this Section, any estate,
heir, personal representative, receiver, trustee, successor,
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assignee and/or transferee of the Member) shall not be liable,
responsible or accountable, in damages or otherwise, to the
Company or any other person for: (i) any act performed, or the
omission to perform any act, within the scope of the power and
authority conferred on the Member by this agreement and/or by the
Statutes except by reason of acts or omissions found by a court of
competent jurisdiction upon entry of a final judgment rendered and
un-appealable or not timely appealed (“Judicially Determined”) to
constitute fraud, gross negligence, recklessness or intentional
misconduct; (ii) the termination of the Company and this Agreement
pursuant to the terms hereof; (iii) the performance by the Member
of, or the omission by the Member to perform, any act which the
Member reasonably believed to be consistent with the advice of
attorneys, accountants or other professional advisers to the
Company with respect to matters relating to the Company,
including actions or omissions determined to constitute violations of
law but which were not undertaken in bad faith; or (iv) the conduct
of any person selected or engaged by the Member.
ii. The Company, its receivers, trustees, successors, assignees
and/or transferees shall indemnify, defend and hold the Member
harmless from and against any and all liabilities, damages, losses,
costs and expenses of any nature whatsoever, known or unknown,
liquidated or unliquidated, that are incurred by the Member
(including amounts paid in satisfaction of judgments, in settlement
of any action, suit, demand, investigation, claim or proceeding
(“Claim”), as fines or penalties) and from and against all legal or
other such costs as well as the expenses of investigating or
defending against any Claim or threatened or anticipated Claim
arising out of, connected with or relating to this Agreement, the
Company or its business affairs in any way; provided, that the
conduct of the Member which gave rise to the action against the
Member is indemnifiable under the standards set forth in Section
iii. Upon application, the Member shall be entitled to receive advances
to cover the costs of defending or settling any Claim or any
threatened or anticipated Claim against the Member that may be
subject to indemnification hereunder upon receipt by the Company
of any undertaking by or on behalf of the Member to repay such
advances to the Company, without interest, if the Member is
Judicially Determined not to be entitled to indemnification.
iv. All rights of the Member to indemnification under this Section 10(a)
shall (i) be cumulative of, and in addition to, any right to which the
Member may be entitled to by contract or as a matter of law or
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equity, and (ii) survive the dissolution, liquidation or termination of
the Company as well as the death, removal, incompetency or
insolvency of the Member.
v. The termination of any Claim or threatened Claim against the
Member by judgment, order, settlement or upon a plea of nolo
contendere or its equivalent shall not, of itself, cause the Member
not to be entitled to indemnification as provided herein unless and
until Judicially Determined to not be so entitled.
11. Death, Disability, Dissolution.
a. Death of Member. Upon the death of the Member, the Company shall be
dissolved. By separate written documentation, the Member shall
designate and appoint the individual who will wind down the Company’s
business and transfer or distribute the Member's Interests and Capital
Account as designated by the Member or as may otherwise be required by
b. Disability of Member. Upon the disability of a Member, the Member may
continue to act as Manager hereunder or appoint a person to so serve
until the Member's Interests and Capital Account of the Member have
been transferred or distributed.
c. Dissolution. The Company shall dissolve and its affairs shall be wound up
on the first to occur of:
i. At a time, or upon the occurrence of an event specified in the
Articles of Organization or this Agreement.
ii. The determination by the Member that the Company shall be
12. Miscellaneous Provisions.
a. Article Headings. The Article headings and numbers contained in this
Agreement have been inserted only as a matter of convenience and for
reference, and in no way shall be construed to define, limit or describe the
scope or intent of any provision of this Agreement.
b. Entire Agreement. This Agreement constitutes the entire agreement
between the Member and the Company. This Agreement supersedes any
and all other agreements, either oral or written, between said parties with
respect to the subject matter hereof.
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c. Severability. The invalidity or unenforceability of any particular provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
d. Amendment. This Agreement may be amended or revoked at any time by
a written document executed by the Member.
e. Binding Effect. Subject to the provisions of this Agreement relating to
transferability, this Agreement will be binding upon and shall inure to the
benefit of the parties, and their respective distributees, heirs, successors
and assigns.
f. Governing Law. This Agreement is being executed and delivered in the
State of Arizona and shall be governed by, construed and enforced in
accordance with the laws of the State of Arizona.
IN WITNESS WHEREOF, the Member has hereunto set such Member's hand as of the
day and year first above written.
____________________________, LLC
Managing Member’s Signature: __________________________________________
Print Name: __________________________________________