Arizona LLC Annual Minutes

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Annual LLC Minutes

Arizona LLC Annual Minutes

by Richard Keyt, Arizona LLC attorney

Question: Does Arizona law require that the members or managers of an Arizona limited liability company hold annual meetings or that they document the meetings with minutes.

Answer: No.

Question: Should Arizona limited liability companies hold annual meetings of members and managers and document the meetings with minutes?

Answer: Absolutely. It's a prudent business practice. Annual meetings can prevent problems.

As an Arizona limited liability company lawyer who has formed 2,400+ Arizona LLCs and who has been practicing business law in Arizona since 1980, I recommend that every Arizona LLC hold annual meetings of members and managers and that the meetings be documented with minutes. In lieu of holding a meeting of members and managers, they may adopt resolutions in the form of an Action by Unanimous Consent signed by all members and managers, respectively.

Many owners of Arizona LLCs ask me why should the members and managers of their small business hold meetings and document the meetings with minutes? Too often people mistakenly believe that after they form their LLC, they are home free and are happily ever after protected from the debts and liabilities of their LLC. They assume that all the members are on the same page and agree on all important actions taken by the company. Ignorance may be bliss, but it can also be very costly.

Why LLC Annual Minutes or Resolutions are Important

There are three important reasons to hold annual meetings and/or adopt annual resolutions.

Reduce the Chance of a Court Piercing the Veil and Finding Members Liable for the LLC's Debts. Holding regular meetings and documenting the meetings helps to convince a court and a jury that you are treating your LLC like a business rather than a hobby or sole proprietorship. One of the factors that courts consider in determining whether to pierce the veil and hold the members of an LLC liable for the LLC's debts and obligations is if the members hold meetings. Prudent businesses hold meetings and document the meetings with minutes or resolutions because doing so makes good sense EVEN WHEN THE LAW DOES NOT REQUIRE MEETINGS.
Conduct an Annual Review Audit. The members and managers should review an LLC operations checklist that reminds them of: (i) open items (such as no signed Operating Agreement or that the LLC acquired a new member, but failed to properly document the addition), or (ii) tasks that should be completed in the near future. It is an annual opportunity to review important company matters such as: insurance coverages, year-end tax planning, whether loans to or from the LLC and related parties have been documented and the agreed value of the company for buy-out purposes in the LLC's Operating Agreement. When I prepare annual minutes for my clients, I include a checklist of important issues to be reviewed.
Inform Members About LLC Actions & Give Members a Vote to Approve or Reject LLC Action. In multi-member limited liability companies regularly held meetings is a good way to keep members informed about the LLC's activities and to document approval of important acts, which greatly reduces the chance that the members will have a dispute and go to court over acts or omissions of the members, managers and the company. A company that informs the members of important proposed actions and that allows the members to vote to approve or reject the actions is much less likely to end in court because members disagree over what is done or not done. The members could vote to approve a resolution that approves the actions taken by members and/or managers during the year. This gives members an option to discuss action and vote to approve or reject the action.

Attorney Prepared Minutes

I prepare annual minutes or resolutions for Arizona LLC members and managers (two documents) for the total price of $97. My annual LLC minutes service does not consist of sending you a boiler plate document. We perform all of the following important services when hired to prepare minutes or resolutions of an annual meeting of the members and managers of an Arizona LLC:

First: We conduct an Arizona Corporation Commission status audit. Every Arizona LLC should conduct an annual ACC status audit to determine if any information in the company's Articles of Organization is inaccurate. Arizona law requires that AZ LLC Articles of Organization be kept up to date. Arizona Revised Statutes Section 29-633.B states, "A limited liability company shall amend its articles of organization . . . within thirty days after the occurrence of any of the following events:
1. Any . . . facts have changed making the articles of organization inaccurate in any respect . . .
2. Management of the limited liability company is reserved to the members and there is a change in the persons who are members.
3. Management of the limited liability company is vested in a manager or managers and there is a change in the persons who are managers or in the members who own a twenty per cent or greater interest in the capital or profits interest of the limited liability company.
When hired to prepare annual minutes of an Arizona LLC, we conduct an ACC status examination. We review the records on file with the Arizona Corporation Commission to determine:
I. Company Good Standing. If the LLC in not in good standing, we will notify the company of the problem and explain how to correct the problem so the company can obtain good standing status.
II. Known Place of Business. We notify the company of its current known place of business on file with the Arizona Corporation Commission so that the company can file a change of address form with the ACC if the address is out of date. It is extremely important that the address of the company on file with the ACC always be correct. In certain circumstances the ACC may be authorized to service legal documents (for example - a summons and complaint when the LLC is sued) on the company by mailing the documents to the address on file with the ACC. If the address on file with the ACC is not correct, the company may never receive the legal documents and suffer adverse consequences, including, but not limited to, having a default judgment entered in superior court against the company. For this reason I recommend that the company review its records on file with the ACC every three months, but not more than every year, to confirm that all information is correct.
III. Statutory Agent. We notify the company of its current statutory agent on file with the Arizona Corporation Commission so that the company can file a change of statutory agent form with the ACC if the information is out of date or if the company wants to appoint a new statutory agent.
IV. Members. We notify the company as to who the Arizona Corporation Commission shows as members of the company and their addresses so the company can file a change of address form with the ACC if the address of any member is out of date. The company must file an Amendment to the Articles of Organization if: (i) the ACC records name as a member a person or entity who is no longer a member, or if (ii) a person or an entity who should be named as a member is not named on the ACC's records. Note: If the company is member managed, all members must be named in the ACC's records, but if the company is manager managed, only members who own 20% or more of the LLC must be named in the ACC's records.
V. Managers - Manager Managed LLCs Only. We notify the company as to who the Arizona Corporation Commission shows as managers of the company and their addresses so the company can file a change of address form with the ACC if the address of any manager is out of date. The company must file an Amendment to the Articles of Organization if: (i) the ACC records name as a manager a person or entity who is no longer a manager, or if (ii) a person or an entity who should be named as a manager is not named on the ACC's records.
Second: We report the results of our ACC status examination to the company. We will email to the company the results of our status examination with instructions on how to change addresses, amend the Articles of Organization if necessary and correct any problems we find.
Third: We prepare the annual minutes or an Action by Unanimous Consent in lieu of a meeting, depending on which document you chose. If your company actually holds meetings of members and/or managers, we will prepare minutes from the meeting information you deliver to us. If your company elects not to actually hold meetings, we will prepare an Action by Unanimous Consent that contains typical annual resolutions. If your company is a manager managed LLC, we will prepare the appropriate document for both members and managers.
Fourth: We give you a checklist for your annual meeting audit.

How to Hire Richard Keyt to Prepare Your LLC's Annual Minutes or Resolutions

To hire Arizona LLC lawyer Richard Keyt to prepare annual minutes or resolutions for your AZ LLC for $97, fill out our online service agreement and pay online with your Visa or MasterCard. We offer two minutes / resolutions services:

One time for $97, or
Annual subscription for $97 a year. Purchase the service now and every December we will bill your credit card, send you an invoice and provide the minutes / resolutions service for that year. You can cancel at any time.

About the Author

Richard Keyt, J.D., LL.M. (income taxation New York University Law School) is a business, real estate, transactions, contracts and estate planning attorney licensed to practice law in Arizona. He has formed over 2,400+ Arizona limited liability companies in the last few years because his low cost high quality LLC package is second to none and it only costs $599 for everything. Rick has practiced law in Arizona since 1980. Rick can be reached by telephone at 602-906-4953, ext. 3. Email at rickkeyt@keytlaw.com and fax at 602-297-6890. Rick's web site located at www.keytlaw.com had over 3,000,000 visitors in 2006 - 2008. To follow Rick on Twitter go to www.keytlaw.com/twitter. Rick does not accept matters involving landlord / tenant disputes or litigation of any kind (other than tax lien foreclosures). Communicating with Richard Keyt via email or otherwise does not cause you to become a client or cause your communications to be confidential or subject to the attorney client privilege.

Hire Richard Keyt to Prepare Your LLC's Annual Minutes

To hire Arizona LLC lawyer Richard Keyt to prepare annual minutes or resolutions for your AZ LLC for $97, fill out our online service agreement and pay online with your Visa or MasterCard.

This page was last modified on May 23, 2010.

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