Does Arizona law require that Operating Agreements be in writing?
No, but agreements between members, managers and the limited liability company should be reduced to a written instrument. Oral contracts can be legally binding in Arizona, but a prudent person will insist on a written contract. The problem with oral contracts is that it is very difficult to prove the terms and conditions of the oral contract. If the parties to an oral contract become involved in a dispute, each party will have a different view of the terms and conditions of the oral contract and the judge or jury in a lawsuit may have a problem determining whose view of the oral contract is correct. If you are making an oral contract to purchase a bike for $50, it may not be worth the time or effort to create a written contract. However, if you intend to invest thousands of dollars into a business venture or a limited liability company, the stakes are much higher and the investment in time and money to prepare a written agreement between the members, managers and the company can preven
