How To Add a Member to An Existing LLC

Bringing a change into ownership structure of any business is not an easy task. It takes proper planning and a lot of home work. Adding a new owner to a limited liability company (LLC) is even more difficult, but you can do this job with an ease if follow a systematic plan. Ideally you should start with discussing the proposal with existing partners or members, and once all of them agree, take the next step of planning how you going to do it. You will have to issue formal notices to existing owners or partners to convene a meeting to formally and officially discuss the idea,  expected change in the rules of organisation and ownership structure. With formal approval of all these issues, you can proceed further with the plan of the ownership change, adding another member to the LLC


  • 1

    Review Articles of Organisation

    First step to push forward the plan of adding another member to LLC is to review the articles of organisation or agreement. Generally, these documents will provide you with the set method and process for adding or ousting a member from the LLC. Some articles of the agreement are comprehensive to provide you with guidance from a small to big issues.  For example, these documents might require you to give formal and in written notices to all existing LLC members. So closely follow Articles of Organisation.

  • 2

    Determine Share of New Member

    Before finalizing and getting approved from all members the plan of adding new member to the LLC, you should refer to Articles of Organisation or Operating Agreement for determining buy-in or profit share of the new member. These documents will provide you with an indicative projection to determine profit of the new member, but if you do not get any help from any of these two legal documents, it is better to get the idea discussed with all existing members and seek a vote of approval from each one of them.

  • 3

    Prepare Amendment

    You will have to prepare an amendment, which can be up to a paragraph covering addition of the new member, to be inscribed in the Articles of Organisation or Operating Agreement. In some countries a change in the ownership or partnership structure of a LLC has to be notified to relevant regulatory body, as per company laws, immediately and in others you can do this along with annual financial disclosures etc.  You should know about companies rules and regulations in your countries before hand to avoid any legal complication at a latter stage.

  • 4

    Filing of Amendment Documents

    If your countries' rules and regulations require you to immediately file amended agreement documents, you should do it immediately. It can be done online by filling-in some forms and attachments. You may also post the amended agreement with other required documents after downloading and filling in them. As a least resort you might require a visit in person, especially if the system is more bureaucratic.

  • 5

    Information Revenue Department

    As you might be aware of requirements that you might have to inform the local revenue collection authority about the change in partnership of LLC since it affects buy-in share and profit. Generally, each member of a LLC pays tax on personal income out of the business as per his/her share. Whatever may be the structure, you in most cases will need to inform local revenue collection body.

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