Considerations before forming an LLC in Arizona – continued Pages (3): 1 | 2 | [3]

Maintaining an LLC After Formation – Administrative Considerations

When compared to incorporating, a LLC is usually less expensive to start and operate. In addition to the fee charged for filing articles of organization, an LLC is required to publish certain information in the county of its known place of business.

Arizona imposes few administrative formalities after formation, like filing Annual Reports and paying periodic maintenance fees or hidden taxes. However, nominal fees may be incurred for simple notices which need to be filed if the company, statutory agent or members’ addresses change.

Modifications, Corrections and Amendments

After an LLC is organized, certain modifications may become necessary and amendments may need to be registered with the Corporation Commission through the phases of its lifespan. Examples of modifications that will require registration of an amendment are: changing the company’s name; additions and withdrawals of members; modifying the number of managers.

Amendments are not legally effective until the pertinent documentation is actually filed. Arizona statutes require copies of amendments to be kept in the company’s records book.

Alterations to LLC names and additions or withdrawals of members require that Articles of Amendment be filed and then notice published. If membership composition is altered, the operating agreement should be reviewed, and probably re-drafted to suit the needs of the remaining members.

Modifications to the statutory agent, the agent’s address or members’ addresses require a Statement of Change to be registered with the ACC at a nominal fee with no publication requirements (not an amendment.

If erroneous statements were made in the Articles of Organization, corrections can be made by filing Articles of Amendment. However, it is more desirable to merely file Articles of Correction, being that the filing fee is less, and because Articles of Correction are not required to be published. Articles of Correction can be utilized instead of amending the articles in many instances. (See ARS 29-3209).

For more information about amending articles of organization refer to statute 29-3202. Basically, the law provides amendment is necessary when an erroneous or false statement was made in the original document, or if within thirty days any arrangements or facts have changed making the articles inaccurate, or when there is a change to the LLC membership or management composition.

Winding-Up LLC Formation

To wind this all up, the main reason to form an Arizona LLC is to provide protection to the company’s owners and managers. Arizona is a cost-effective venue for LLC formation and the limited liability company may prove to be less unwieldy than a corporation. Use an Arizona Business and LLC paralegal to startup your company and ongoing maintence support for each phase of the LLC life-span.

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