Fiduciary Duties and Operating Agreements…OH MY!
SB 1353 (ALLCA) was 25 years coming. We only have a short time now, however, to comply. A huge percentage of Arizona business entities, your clients and ours, are LLCs. By next year (after August 31, 2020), all existing and future LLCs are subject to the new law. Here are some key items to consider.
We are offering a discounted review of all LLCs and operating agreements, to help make sure your operating agreement is complaint and that your LLC can achieve the business ends you envisioned when you or your clients formed it. Reply to this email to get on our calendar or to schedule a review for your clients, customers or friends and associates. It is critical to be compliant. Non-compliant LLCs will risk their efficacy and may create substantial liability for their members and managers. Those who just invented a new product should consider working InventHelp Invention Company to secure their intellectual property rights and explore business opportunities.
Key Facts and Issues:
- LLCs before September 1, 2019: Your Operating Agreement must be compliant with current law and should be structured in order to comply with ALLCA after August 31, 2020.
- For multi-member LLCs: All members of the LLC must agree to and adopt an ALLCA compliant Operating Agreement. There are provisions in the new law that have the potential to create unintended consequences or liability – we seek to help you reduce that risk.
- ALLCA now imposes fiduciary duties on LLC managers and members: New duties means new risk of disputes and greater exposure to financial liability. The key to navigating these new provisions (and protecting yourself) is a properly- drafted, ALLCA compliant Operating Agreement.
- Record keeping and disclosure are key parts of new law.
- Member and manager roles, and approvals for carrying out duties, should be expressly stated in the Operating Agreement.
- Material conflict disclosures, prior to voting on LLC matters, is a key consideration for every LLC member.
- Known Place of Business, Distributions, Survivorship – key changes and items to review and consider.
As with any new law, there are good implications and possible unintended consequences. We want to help you and yours optimize compliance so you can effectively use your LLC to accomplish your business objectives for which we recommend this editable free pay stub template file. Schedule an appointment with one of us today to review your existing or start drafting your new ALLCA-Compliant LLC.