How Do We Add a New LLC Member?
Recently, I have seen several limited liability company (LLC) members ask, online, how they can add a new LLC member. This post provides the answer, which is pretty simple.
Short answer: One must amend the Operating Agreement to add a new LLC member.
Slightly longer answer: An Operating Agreement (OA) can be oral or written. A written OA is better because it clearly documents the members’ agreement concerning the LLC.
There is neither a required format nor required contents for an OA. At the least, it should identify the members and specify their respective membership interests (units or percentages), and the managers (if the LLC is not member-managed).
While much more can be included (a thorough OA can be 30 pages in length), applicable state law typically will fill in any gaps.
So if one wishes to add a new LLC member, one must amend the OA accordingly. The new member must be identified, and the new member’s membership interest must be specified. Changes to the existing members’ interest also must be specified (e.g., their interests may be diluted). The amendment must be signed by the new member and the continuing members (and any member that departs).
Check out all posts about LLC Operating Agreements.
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Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.