Anatomy of an Operating Agreement

There are currently over 1.3 million active limited liability companies (“LLCs”) in Arizona.  As a result, regardless of your practice area, you likely, at some point, will have to review provisions in an operating agreement for an LLC or the Arizona Limited Liability Company Act (“Act”) if there is no operating agreement or the operating agreement is silent on an issue covered by the Act.  This program will provide an overview of the categories of information usually included in an operating agreement and the default rules in the Act.

 The panelists will discuss provisions within the operating agreement that are often subject to negotiations (and susceptible to disputes post-execution) among owners, including management and information rights, transferability restrictions, and buyout options upon certain triggering events.  In addition, the panelists will highlight potential pitfalls for the unwary drafters of operating agreements such as majority in interest language when there are two equal owners, protection of an LLC’s S-election, and valuation options in the event of buyout of an owner. 

Chairs: 

May Lu, Tiffany & Bosco PA

Jillian Bauman, Tiffany & Bosco PA

Faculty:
Matthew Engle, Gallagher & Kennedy PA
Scott Clouse, Henry + Horne