Arizona limited liability partnership agreement template

Arizona Limited Liability Partnership Agreement

This Arizona Limited Liability Partnership Agreement (the “Agreement”) is made and entered into as of [Date], by and among the following partners:

• [Partner 1 Full Legal Name], residing at [Partner 1 Address], with contact details [Partner 1 Phone Number] and [Partner 1 Email Address] (“[Partner 1 Short Name]”)
• [Partner 2 Full Legal Name], residing at [Partner 2 Address], with contact details [Partner 2 Phone Number] and [Partner 2 Email Address] (“[Partner 2 Short Name]”)
• [Partner 3 Full Legal Name], residing at [Partner 3 Address], with contact details [Partner 3 Phone Number] and [Partner 3 Email Address] (“[Partner 3 Short Name]”)

(Each a “Partner” and collectively, the “Partners”).

1. Formation and Purpose

• Option A: Formation
  • The Partners hereby form a limited liability partnership (the “LLP”) pursuant to the Arizona Revised Uniform Partnership Act (A.R.S. Title 29, Chapter 5) (the “Act”). The LLP is registered with the Arizona Corporation Commission under File Number [File Number]. Evidence of current registration is attached as Exhibit A.
• Option B: Purpose
  • The purpose of the LLP is to engage in the business of [Description of Business Purpose] (the “Business”). The scope of permitted activities shall be limited to those directly related to the Business. The principal place of business in Arizona is located at [Address of Principal Place of Business].
• Option C: Term
  • Option 1: Definite Term: The term of this Agreement shall commence on the date hereof and shall continue for a term of [Number] years, expiring on [Date], unless sooner terminated as provided herein.
  • Option 2: At-Will: The term of this Agreement shall commence on the date hereof and shall continue until terminated as provided herein.

2. Capital Contributions and Ownership

• Option A: Initial Contributions
  • Each Partner shall contribute to the capital of the LLP the amount or property set forth opposite their name on Schedule B.
• Option B: Valuation of Non-Cash Contributions
  • Any non-cash contribution shall be valued at its fair market value as of the date of contribution, as determined by [Method of Valuation, e.g., independent appraisal, agreement of the partners].
• Option C: Additional Contributions
  • Option 1: Required Additional Contributions: The Partners shall be required to make additional capital contributions as determined necessary by a vote of [Percentage]% of the Partners. The amount and timing of such contributions shall be determined by the Partners.
  • Option 2: No Required Additional Contributions: No Partner shall be required to make any additional capital contributions to the LLP.
• Option D: Ownership Percentage
  • The ownership percentage interest of each Partner in the LLP is set forth on Schedule B. The ownership percentage will be maintained according to capital accounts.

3. Financial Management

• Option A: Bank Accounts
  • The LLP shall maintain one or more bank accounts at [Name of Bank]. All funds of the LLP shall be deposited into such accounts. Withdrawals from such accounts shall require the signature of [List of Authorized Signatories].
• Option B: Accounting
  • The LLP’s books and records shall be maintained in accordance with generally accepted accounting principles (GAAP). The fiscal year of the LLP shall end on [Date].
• Option C: Financial Reports
  • The LLP shall provide Partners with a [monthly/quarterly/annual] financial report, including a balance sheet and income statement, prepared by [Person/Entity Responsible for Financial Reporting].

4. Management

• Option A: Management Rights
  • Except as otherwise provided herein, each Partner shall have the right to participate in the management and control of the LLP.
• Option B: Managing Partner(s)
  • Option 1: Appointment: [Name(s) of Managing Partner(s)] shall be the Managing Partner(s) of the LLP. The Managing Partner(s) shall have the authority to manage the day-to-day operations of the LLP, subject to the limitations set forth herein.
  • Option 2: Authority Limitations: The Managing Partner(s) shall not have the authority to [List of specific limitations on authority, e.g., enter into contracts exceeding $[Amount], sell assets exceeding $[Amount], incur debt exceeding $[Amount]] without the consent of [Percentage]% of the Partners.
• Option C: Partner Authority
  • Under A.R.S. §29-103, a partner is an agent of the partnership. The public presumption of partner authority may be limited by filing a Statement of Partnership Authority with the Arizona Corporation Commission.

5. Voting and Meetings

• Option A: Voting Rules
  • Except as otherwise provided herein, all decisions of the LLP shall be made by a vote of [Percentage]% of the Partners.
• Option B: Meeting Notice
  • Written notice of any meeting of the Partners shall be given to each Partner at least [Number] days prior to the date of the meeting.
• Option C: Quorum
  • A quorum for any meeting of the Partners shall consist of [Percentage]% of the Partners.
• Option D: Decisions Requiring Unanimous Consent
  • The following decisions shall require the unanimous consent of all Partners:
  • Admitting a new Partner.
  • Amending this Agreement.
  • Dissolving the LLP.
  • Selling all or substantially all of the assets of the LLP.
• Option E: Special Meetings
  • Special meetings may be called by [Person or Percentage of Partners].

6. Allocation of Profits, Losses, and Distributions

• Option A: Profit and Loss Allocation
  • Profits and losses of the LLP shall be allocated among the Partners in proportion to their ownership percentage interests as set forth on Schedule B.
• Option B: Distributions
  • Distributions of cash flow shall be made to the Partners at such times and in such amounts as the Managing Partner(s) may determine, subject to the availability of cash flow. Distributions shall be made in proportion to the Partners’ ownership percentage interests.
• Option C: Tax Allocations
  • Items of income, gain, loss, deduction, and credit for federal and state income tax purposes shall be allocated among the Partners in accordance with their respective shares of profits and losses, as determined in accordance with Section 704(b) of the Internal Revenue Code.

7. Tax Matters

• Option A: Tax Classification
  • The LLP shall be classified as a partnership for federal and state income tax purposes.
• Option B: Tax Matters Partner
  • [Name of Partner] is hereby designated as the Tax Matters Partner of the LLP. The Tax Matters Partner shall have the authority to represent the LLP in all tax matters.
• Option C: EIN
  • The LLP shall obtain a federal Employer Identification Number (EIN) from the Internal Revenue Service. The EIN is [EIN].
• Option D: Arizona Transaction Privilege Tax
  • If the LLP’s business activities require registration for Arizona Transaction Privilege Tax (TPT), the LLP will obtain and maintain the required TPT license.

8. Assignment and Transfer of Partnership Interests

• Option A: Restrictions on Transfer
  • No Partner shall sell, assign, transfer, or otherwise dispose of all or any portion of their interest in the LLP without the prior written consent of [Percentage]% of the other Partners.
• Option B: Right of First Refusal
  • If a Partner desires to transfer their interest in the LLP, the other Partners shall have a right of first refusal to purchase such interest on the same terms and conditions offered to the proposed transferee.
• Option C: Mandatory Repurchase
  • Upon the occurrence of any of the following events, the LLP shall have the right, but not the obligation, to repurchase the interest of a Partner:
  • Death of a Partner.
  • Disability of a Partner.
  • Bankruptcy of a Partner.
  • Voluntary withdrawal of a Partner.

9. Admission and Withdrawal of Partners

• Option A: Admission of New Partners
  • New Partners may be admitted to the LLP with the consent of [Percentage]% of the existing Partners. The terms and conditions of admission of a new Partner shall be set forth in a written agreement signed by all Partners.
• Option B: Expulsion of Partners
  • A Partner may be expelled from the LLP for cause upon a vote of [Percentage]% of the other Partners. Cause shall include, but not be limited to, [List of causes for expulsion, e.g., breach of this Agreement, gross negligence, misconduct]. Arizona law imposes requirements on liability for wrongful expulsion.
• Option C: Withdrawal
  • A Partner may withdraw from the LLP by giving [Number] days written notice to the other Partners.

10. Liability

• Option A: Limitation of Liability
  • Pursuant to A.R.S. §29-1103, no Partner in this LLP shall be liable, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debt, obligation or liability of, or chargeable to, the LLP, whether arising in tort, contract or otherwise, arising from the wrongful conduct of another partner or agent of the LLP.
• Option B: Disclosure of LLP Status
  • The LLP status shall be disclosed in all contracts and legal dealings of the LLP.
• Option C: Indemnification
  • The LLP shall indemnify each Partner against any and all losses, claims, damages, liabilities, and expenses (including attorneys’ fees) arising out of their participation in the LLP, except to the extent such losses, claims, damages, liabilities, and expenses are caused by the Partner’s gross negligence or willful misconduct.

11. Duties and Standards of Conduct

• Option A: Fiduciary Duties
  • Option 1: Statutory Duties: The Partners shall owe each other the fiduciary duties of loyalty and care as provided under Arizona law.
  • Option 2: Waiver/Modification: The Partners hereby agree to [waive/modify] the statutory fiduciary duties to the extent permitted by Arizona law. Specific modifications are as follows: [Specify modifications, if any].
• Option B: Conflict of Interest
  • Each Partner shall disclose any potential conflict of interest to the other Partners. Any transaction involving a conflict of interest shall require the approval of [Percentage]% of the Partners who are not involved in the conflict.
• Option C: Outside Activities
  • Each Partner shall be permitted to engage in other business activities, provided that such activities do not materially interfere with their obligations to the LLP.

12. Insurance

• Option A: Required Coverage
  • The LLP shall maintain insurance coverage in such amounts and types as are reasonably necessary to protect the LLP and its assets. The coverage shall include [Specify types of coverage, e.g., general liability, property insurance, professional liability insurance if required by industry-specific Arizona statutes].
• Option B: Responsibility for Premiums
  • The LLP shall be responsible for paying the premiums for all insurance coverage.

13. Books and Records

• Option A: Access to Records
  • Each Partner shall have full access to the books and records of the LLP at all reasonable times.
• Option B: Internal Reporting
  • The LLP shall provide Partners with [monthly/quarterly/annual] financial reports, including a balance sheet and income statement.
• Option C: Audit
  • The LLP shall conduct an [annual/periodic] audit of its financial statements by an independent certified public accountant.

14. Dissolution and Winding Up

• Option A: Dissolution Events
  • The LLP shall be dissolved upon the occurrence of any of the following events:
  • The expiration of the term of the Agreement (if a definite term is specified).
  • The unanimous consent of all Partners.
  • The death, disability, bankruptcy, or withdrawal of a Partner, unless the remaining Partners elect to continue the LLP.
  • Judicial dissolution pursuant to Arizona law.
• Option B: Winding Up
  • Upon dissolution, the assets of the LLP shall be liquidated, and the proceeds shall be distributed in the following order:
  • To creditors of the LLP, including Partners who are creditors.
  • To Partners in proportion to their capital account balances.
  • Any remaining surplus shall be distributed to the Partners in proportion to their ownership percentage interests.

15. Dispute Resolution

• Option A: Negotiation
  • Any dispute arising out of or relating to this Agreement shall be resolved through good faith negotiation among the Partners.
• Option B: Arbitration
  • If the dispute cannot be resolved through negotiation, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration shall take place in [City, State].
• Option C: Governing Law and Venue
  • This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona. Any legal action arising out of or relating to this Agreement shall be brought in the courts of [County, State].

16. Compliance

• Option A: Arizona Labor Laws
  • The LLP shall comply with all applicable Arizona labor laws.
• Option B: Licensing and Regulatory Approvals
  • The LLP shall obtain and maintain all necessary licenses and regulatory approvals required to conduct the Business in Arizona.
• Option C: Good Standing
  • The LLP shall maintain its good standing with the Arizona Corporation Commission, including filing the required annual reports and paying all applicable fees.

17. Amendment

• Option A: Amendment Process
  • This Agreement may be amended only by a written instrument signed by [Percentage]% of the Partners.

18. Miscellaneous

• Option A: Records Retention
  • The LLP shall retain all books and records for a period of at least [Number] years.
• Option B: Confidentiality
  • Each Partner shall maintain the confidentiality of the LLP’s business information.
• Option C: Non-Competition
  • During the term of this Agreement and for a period of [Number] years thereafter, no Partner shall engage in any business that is competitive with the Business within a [Radius] mile radius of the principal place of business in Arizona. This clause is intended to be enforceable under applicable Arizona law.
• Option D: Force Majeure
  • Neither party shall be liable for any failure to perform its obligations under this Agreement if such failure is caused by an event of force majeure, including but not limited to acts of God, war, terrorism, fire, flood, or other natural disaster.
• Option E: Severability
  • If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• Option F: Entire Agreement
  • This Agreement constitutes the entire agreement among the Partners with respect to the subject matter hereof and supersedes all prior or contemporaneous communications and proposals, whether oral or written.
• Option G: Notice
  • All notices under this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person, sent by certified mail, return receipt requested, or sent by email to the addresses set forth in the introductory paragraph of this Agreement.

IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first written above.

[Partner 1 Full Legal Name]

[Partner 2 Full Legal Name]

[Partner 3 Full Legal Name]

Schedule A: Evidence of Registration with Arizona Corporation Commission

(Attach Documentation)

Schedule B: Capital Contributions and Ownership Percentage

Partner Name	Initial Capital Contribution	Ownership Percentage
[Partner 1 Full Legal Name]	[$ Amount or Description]	[Percentage]%
[Partner 2 Full Legal Name]	[$ Amount or Description]	[Percentage]%
[Partner 3 Full Legal Name]	[$ Amount or Description]	[Percentage]%