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J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2211
Experience:  Experience in general business transaction and formation matters.
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Need help revising an Operating Agreement Arizona LLC All

Customer Question

Need help revising an Operating Agreement for an Arizona LLC
All I am doing is changing the Managing Member. Is this correct:
WAS: The day-to-day business and affairs of the Company shall be managed by the Company’s “Administrative Manager”.The initial Administrative Manager of the Company shall be (old name). An Administrative Member may be removed or replaced by the affirmative vote of a majority in number of the Manager other than the Administrative Manager
IS: The day-to-day business and affairs of the Company shall be managed by the Company’s “Administrative Manager”. The initial Administrative Manager of the Company shall be (Old Name). (New Name) shall assume the duties of Administrative Manager effective June 23, 2015. An Administrative Member may be removed or replaced by the affirmative vote of a majority in number of the Manager other than the Administrative Manager
and
Last page Was: IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. (Old name) By:___signature__________________________
(Old Name) , Managing Member
Last page is: IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. (New name) By:___signature__________________________
(New Name), Managing Member
Or do I need to show a revision history? The "executed this Agreement effective as of the date first above written." is problematic because the "date first written above" was when the LLC was first formed years ago and the signature and revision are as of June 23rd, 2015.
Thank you
Submitted: 1 year ago.
Category: Business Law
Expert:  J. Warren replied 1 year ago.
Hello my name is ***** ***** I look forward to providing you information. Please note:
(1) this is general information and is not legal advice. I never propose a specific course of action. There is no attorney-client relationship or privilege that is formed when communicating to an expert on this site. The site repeats this disclaimer numerous times. By continuing, you confirm that you understand and agree to these terms; and
(2) there may be a slight delay between your follow ups and my reply while I am typing out my answer.
You are correct in being concerned with this phrase. The "date first written above" is used because when an operating agreement is revised it should be done so by a formal amendment with a date of the amendment being recited at the beginning of the document. The Amendment to Operating Agreement would recite something such as the Members hereby agree to this Amendment dated ______________(i.e. June 23, 2015)..... Here is a link to a template Amendment to Operating Agreement: www.northwestregisteredagent.com/pdf/amendment-to-llc-operating-agreement.pdf
Also, note that to amend an operating agreement in Arizona requires the unanimous consent of all the members unless the operating agreement provides for consent by less then all the members (i.e. by the majority of members).
All my best & encouragement.
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All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.
Customer: replied 1 year ago.

Thanks JW

The members voted to make me the Managing Member.

The operating agreement makes a nonsensical statement about replacing the Managing Member.

"An Administrative Member may be removed or replaced by the affirmative vote of a majority in number of the Manager other than the Administrative Manager."

Since there is only one Manager and that person was the same as the Administrative Manager no one can vote. That makes no sense.

Perhaps the intended phrase was

"An Administrative Member may be removed or replaced by the affirmative vote of a majority in number of the Members other than the Administrative Manager."

That makes more sense

The Operating Agreement listed the actual name of the Managing Member and that person resigned.

The LLC voted on a Action by Written Consent structured much like the template you provided.

So, do I revise the Operating Agreement as shown above and add my name as the new Managing Member in the body of the document?

And then do I have to show a revision history?

If so, must it include a revision date and a summary of the revision?

Sorry this is a bit more complicated

Thanks

Expert:  J. Warren replied 1 year ago.
Thank you for following up. I would suggest even though it is a small revision (but very important) that it be a formal amendment to the operating agreement where there is a recital that the members entered into an operating agreement on such and such date, that the members agreed to amend a section and then the section is referenced and "deleted in its entirety and replaced by the following" then insert the change. Here is a better example of a template that should be more helpful: www.leaplaw.com/pubSearch/preview/1080D_OperatingAmendment.pdf
You are correct, it is best to recite some revision background, which you will see in the form how that is typically done using "Whereas"
Hope this helps.
All my best & encouragement.
Kindly remember the only way experts receive any credit at all for spending time with customers is if you click on ok, good or excellent service even though you have made a deposit or are a subscription customer. You must complete the rating for the expert to receive any credit. If, for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns.
All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.