Choosing whether or not to have an operating agreement is crucial when forming a limited liability corporation (LLC). A legal document known as an operating agreement spells out the guidelines that control the internal workings of your LLC. Arizona is not one of the states that demands an operating agreement, even if some do. However, having one in place is strongly advised.
An operating agreement is advantageous because it specifies the obligations and functions of the LLC members, how profits and losses will be allocated, and how decisions will be made and disputes settled. Without an operating agreement, the LLC will be governed by the state’s default laws at the time of formation. Future legal problems and uncertainty may result from this.
It is significant to remember that operational agreements are not the same as articles of organization. To formally establish an LLC, articles of organization, which include fundamental details including the firm’ name, registered agent, and purpose, are submitted to the state. On the other hand, an operating agreement is a private contract that describes the specifics of how the LLC will function.
The Arizona Corporation Commission website can be used to complete the very simple process of creating an LLC there. The processing time is normally 5-7 business days, and the filing fee is $50. However, there is an extra charge if you require expedited processing.
In Arizona, starting a business with no money is doable, but it takes a lot of effort and commitment. Starting a service-based business with low to no startup expenditures, such freelance writing or graphic design, is one possibility. Partnering with someone who has the resources and know-how to launch the firm is an additional choice. Consider crowdfunding or looking for small business grants as further options.
In conclusion, even though an operating agreement is not mandated by law in Arizona, it is strongly advised that you have one in place to prevent confusion and any legal issues. There are choices for starting a business with little to no money, and the procedure for organizing an LLC in Arizona is reasonably simple and economical.