An operating agreement is generally considered a contract that sets forth the general rules of the Limited Liability Company (LLC). It can be thought of like the constitution of the company. An operating agreement will commonly set forth the relations among the members as members and between the members and the limited liability company. Additionally, if the company is manager managed it will commonly set forth what rights, duties, and responsibilities the manager has in their capacity as the manager.
An operating agreement, or sometimes alternatively called an LLC Company Agreement, is not required to have a valid LLC in Arizona. However, if a company does not setup an Operating Agreement for an Arizona LLC then the company will be governed by the legislative's rules regarding LLC's. The legislative rules can be thought of as "default rules." Thus, if you do not have an operating agreement in place you are electing to abide by what the Arizona legislature has decided, or court has interpreted, the way an LLC should operate. Additionally, if your operating agreement does not expressly address a certain subject, then the default rules can be determinative. Do you want to have a politician determine the way your company runs?
See the article about examples demonstrating how default rules could apply and potential unintended consequences could apply to multi-member LLCs or single-member LLCs.
Any reference to law or statute on this page was referencing the law as of October 2020. The law may have changed since this posting.