Yes, you can add a member to an existing LLC (barring that you don’t currently have an agreement that indicates that you can’t). The main thing you want to remember is that you need to be thorough when adding the new member. It’s important to understand the implications involved in adding someone to an existing LLC and make sure you are fully aware of how that change will impact your business.
Here are a few considerations:
- Make amendments with the state as necessary. When you form an LLC you are required to file a document called articles of organization with your state. In some states, it is a requirement that you file an amendment when you take on a new member. Make sure that you meet those requirements with your state.
- Follow the rules you outlined in your operating agreement that you established at the beginning of the LLC. Most agreements indicate how and if you can bring on a new member. If you don’t have an existing operating agreement, then you should abide by your state’s laws regarding the proper procedure.
- Make sure that you have plan for the specifics of the new member. How much ownership will they have? What is their role? Just as you were likely specific with other memberships, you should be just as specific with the new person.
- Be sure to file proper tax information as needed.
There can certainly be a number of benefits of bringing on a new member, such as new ideas and diversity in the business. However, you want to be sure that the process will be as smooth as possible. To ready your business and ensure documents are updated properly, it is best to consult a business attorney.
s is a platform to connect clients with lawyers. Our mission is to simplify the legal process and focus on accessibility and affordability. We have assisted over 1000 entrepreneurs with their business endeavors and we’d be happy to help you as well. Reach to us for your free consultation.