How Many Members Are Needed to Form an LLC in Arizona?

How Many Members Are Needed to Form an LLC in Arizona?

Business Formation, Entity Formation, Limited Liability Company, Single Member LLC, Start-Up
Is there a minimum number of members required to form an Arizona LLC (limited liability company)?  As a Phoenix startup and small business attorney, this is a question I am sometimes asked by entrepreneurs and expectant business owners who are new to the State and looking to form their Arizona LLC. Although most states used to require a minimum of two members to form an LLC, now all of them and the District of Columbia allow "single member" LLCs to be created. Arizona allows formation of single-member LLCs Arizona LLCs are governed by the Arizona Limited Liability Company Act (Arizona Revised Statutes, Title 29, Chapter 4).  Under A.R.S. §29-601(15), a "Member" is defined as "a person who is admitted as a member in a limited liability company pursuant to this…
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How Many Officers Are Required for an Arizona Corporation?

How Many Officers Are Required for an Arizona Corporation?

Business Formation, Corporations, Start-Up
I'm often asked by startup founders of new Arizona corporations how many corporate officers they need as part of their initial filing with the Arizona Corporation Commission (ACC).   In this post, we'll look at the number---and which types---of officers are required for a new, domestic for-profit corporation in Arizona. Corporate officer requirements under The Arizona Business Corporations Act The good news? Arizona is pretty business-friendly in this regard. Arizona Revised Statutes, Title 10, Chapter 8, Article 4 of the Arizona Business Corporation Act (the "Act") tells us that a corporation shall have "the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws." Subpart D of A.R.S. §10-840 goes on to explain that the same individual "may simultaneously hold more than one…
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So You Want to Invest in Your Friend’s Business (Part Two)

So You Want to Invest in Your Friend’s Business (Part Two)

Business Formation, Contracts, Limited Liability Company, Operating Agreement, Sale of Business
In Part One, I talked about some of the more important questions overlooked (or usually glossed over) by people looking to invest in a friend's existing business. In this part, I'll delve into some of the key documents used to formalize the purchase of an interest in a business, what they are for and why they are important. For purposes of this article, we are going to assume that the business being invested in is formed and operated as a Limited Liability Company (LLC), although the concepts here are applicable to a corporation or partnership, too: Operating Agreement -  As I touched on in Part One, this is a document that hopefully already exists. You should insist upon a complete copy of the version executed by your friend and his…
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So You Want to Invest in Your Friend’s Business (Part One)

So You Want to Invest in Your Friend’s Business (Part One)

Business Formation, Corporations, Limited Liability Company, Operating Agreement, Sale of Business
At least once a week I get contacted by someone who is looking to "invest in a friend's business".  The call or e-mail usually goes something along these lines: "I want to invest in my friend's business" "My friend actually owns X% of the business with other partners" "I will be purchasing [some amount]% of my friend's X%" "It's not a large amount of money, just $[insert dollar amount that is usually a large amount of money to most people]" "I want to be protected" Because this is a question that comes up frequently enough, I figured I would give my faithful readers a freebie and highlight some of the main (but by no means only) issues that come with sinking your money into a friend's company, hopefully helping avoid…
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Can I Change My Statutory Agent without Their Permission?

Can I Change My Statutory Agent without Their Permission?

Business Formation, Corporations, Entity Formation, Limited Liability Company
Startups and established businesses often hire an attorney to set up their Arizona LLC and also have that same attorney serve as the company's statutory agent here. Changing the Arizona statutory agent for an LLC However, sometimes the business owners may want to go in a different direction (for example, a professional statutory agent company or another attorney) or just handle the statutory agent duties themselves. The question then becomes:  Do you as the managing member or members of the LLC have to let the current statutory agent know about this switch?  In other words, do you need the current statutory agent's actual approval or OK first? Do I need my Arizona statutory agent's permission? I was asked this question recently by a long-time friend who was the managing member…
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