Arizona LLC Dissolution & Termination

In order to formally end the existence of an Arizona Limited Liability Company ("LLC"), Arizona's LLC Act generally requires that two processes must occur: 1) dissolution and 2) termination.

1) Dissolution

Regarding dissolution, A.R.S. § 29-781 states:

A limited liability company organized under this chapter is dissolved on the occurrence of the first of the following:

1. At the time or on the happening of the events specified for dissolution in the articles of organization or an operating agreement.

2. Except as otherwise provided in an operating agreement, the written consent to dissolve by more than one-half of the members and by one or more members who on dissolution and liquidation of the assets of the limited liability company would be entitled to receive assets valued at more than one-half of the value of all assets distributed to all members on liquidation.

3. Involuntary judicial dissolution under section 29-785 or an administrative dissolution under section 29-786.

4. Except as otherwise provided in an operating agreement, an event of withdrawal of the last remaining member unless within ninety days all assignees by written consent admit at least one member pursuant to section 29-731, subsection B, paragraph 4 to continue the business of the limited liability company.

A.R.S. § 29-782 addresses what happens after dissolution: 

A. After the dissolution of a limited liability company, its separate existence continues until any of the following occurs:

1. Articles of termination are filed with the commission.

2. A decree terminating the limited liability company is entered by a court of competent jurisdiction.

3. The commission administratively dissolves the limited liability company.

B. After its dissolution, until its separate existence terminates, a dissolved limited liability company shall not carry on any business except business that is necessary to wind up and liquidate its business and affairs, including any of the following:

1. Collecting its assets.

2. Disposing of its properties that will not be distributed in kind to its members.

3. Discharging or making provisions for discharging its liabilities.

4. Distributing its remaining property among its members according to the interests of the members.

5. Doing all other acts required to liquidate its business and affairs.

2) Termination

Regarding Termination, A.R.S § 29-783 states:

If all of the known property and assets of a limited liability company have been applied and distributed pursuant to this chapter, written articles of termination shall be signed on behalf of the limited liability company by a manager if management of the limited liability company is vested in one or more managers or by a member if management of the limited liability company is reserved to the members. The articles of termination shall be filed with the commission and shall state:

1. The name of the limited liability company.

2. That all of the known properties and assets of the limited liability company have been applied and distributed pursuant to this chapter.

This brief overview of some important considerations associated with Arizona LLC dissolution and termination is by no means comprehensive. Always seek the advice of a competent professional when making important legal decisions.

Arizona LLC AttorneyDouglas K Cook is an Arizona llc lawyer with over 40 years of experience as a practicing attorney. Although Douglas K Cook's office is located in Mesa, Arizona, he represents clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.

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