LLC Tax Solutions | LLC Agreements and Stand-Alone Tax Provisions

Important Notice: Effective September 1, 2020

To the owners of tax partnership LLCs and the lawyers who advise them:

Beginning effective 9/1/2020, a new Arizona LLC statute - the Arizona LLC act - becomes effective and it applies to all Limited Liability Companies.

With an effective date found in A.R.S. Section 29-3110(B), the new statute generally provides default rules that will govern an Arizona LLC.

Without an updated operating agreement the new statute may dramatically affect the economics of your deal.

Take immediate action and download your updated form of the Arizona operating agreement.

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Due To The Recent Tax Changes, All Existing Operating Agreements Must Be Updated To Meet New Requirements:

Often-Confusing Requirements Include:

  • Only a member can sign an LLC’s tax return
  • A return not signed by a member is regarded as ‘invalid’
  • The 3 year statute of limitations does not apply to ‘invalid’ returns
  • These signing requirements leave LLC owners at risk and exposed to unforeseen, additional liability

Unfortunately, a one-sentence fix/update is no longer feasible and existing operating agreements are now obsolete.

So What Are LLC Owners To Do?

A multi-member LLC taxed as a partnership should have an operating agreement with language:


• Authorizing a "member manager" to sign its IRS Form 1065
and
• Designating a "partnership representative" on its 2020 IRS Form 1065

Our forms of LLC operating agreements have this language included.

 

About Fred

I am a former judicial law clerk committed to providing LLC operating agreement forms written clearly, without “legalese.”

My forms are truly unique and the rules are complex and confusing!

Don’t tackle it alone. I am here to help make it easy!

We Make Updating Your Operating Agreement Easy. Our Quick, On-Demand, Web-based Solution Saves You Time & Money.

LLC Agreements And Stand-Alone Tax Provisions