Can an Arizona LLC Have Officers Such as a President? | Arizona ...

By On the Net, on July 9th, 2011

Question:? Can an Arizona limited liability company have a President, Vice President, Chief Executive Officer or personnel with other titles?

Answer: Yes.? Arizona?s statutes that authorize the creation of LLCs do not restrict the titles a company may give to its employees or personnel.

Technically, corporations have presidents and CEO, but Arizona LLCs do not.? Arizona law mentions only three types of people or entities associated with an AZ LLC:? members (owners), managers (equivalent to the president of a corporation) and noneconomic members (neither a member nor a manager, but a special character that is not defined in Arizona law).

You LLC has Articles of Organization.? Corporations have Articles of Incorporation.

Arizona law provides for two types of LLCs:? member managed and manager managed.? Only member managed AZ LLCs have managing members.? In fact, AZ law provides that all members of a member managed LLC are managing members and have management power.

If you have a manager managed AZ LLC and you sign as manager on behalf of the LLC, you are complying with Arizona law and clearly indicating to the other party the capacity in which you sign the document.? This is important to avoid personal liability.

Arizona law does not say that your LLC cannot have a president or a CEO.? It?s your company and as the controlling member you can create any LLC office you desire and call it whatever you want to call it.? The problems with calling somebody the President of your AZ LLC are:

1.? People who understand Arizona law will not accept the signature of a person whose title is President because they know that a member must sign for a member managed Arizona LLC and a manager must sign for a manager managed Arizona LLC.? Prudent people will look up the LLC on the Arizona Corporation Commission?s website to see if the LLC is member managed or manager managed and insist that the contract be signed by the appropriate person named in the LLC?s Articles of Organization on file with the Arizona Corporation Commission.

2.? There is a risk that if the contract results in a lawsuit, the other party could claim they thought they were dealing with a corporation rather than an LLC and therefore your company would be required to prove it complied with AZ corporate law rather than AZ LLC law to get the protection afforded by Arizona law to the owners of those types of entities.

3.? The other party to the contract might also claim the signer misrepresented the signer?s capacity to sign the contract.

Read about the perils of signing contracts on behalf of an entity in my article called ?President of Corporation Personally Liable for Signing Contract.?

I do not recommend mixing corporate terms with LLC terms so you avoid the problems mentions above.

Related posts:

1. President of Corporation Personally Liable for Signing Contract
2. Arizona Court of Appeals Finds Officers & Directors of Arizona Corporation Personally Liable for Corporation?s Debt

Source: http://www.keytlaw.com/azllclaw/2011/07/arizona-llc-officers/

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