How to convert a single member LLC into a LLC with multiple members?


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I started as a single member LLC. I found some great partners. How do I add them into the LLC as members?

What needs to be signed between us, is there a specific document we should maintain?

Who needs to know and what's the best form, IRS?

Do I also need to inform the state we're in incorporated in, what's the correct form for California?

We have the equity % worked out. We also have the "sweat equity" to future equity worked out as well. I'm assuming this should be written on a simple document, but not sure what the best title of it might be.

LLC Partner California IRS

asked Feb 2 '12 at 05:13
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Box Cat
5 points

1 Answer


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I'm no expert, but, as a small business owner I may be able to point you in the right direction.

What needs to be signed between us, is there a specific document we should maintain?

You will be updating your amending your Operating Agreement (which you should already have). If you don't already have one, search for "LLC Operating Agreement".

Who needs to know and what's the best form, IRS?

Most likely your Secretary of State and the IRS. You SoS website should have forms for amending your Articles of Organization to add the new members and the IRS has Form 8832 to change your tax entity (since you'll no longer be taxed as a sole proprietorship). Not sure if a new EIN is needed or not.

We have the equity % worked out. We also have the "sweat equity" to future equity worked out as well. I'm assuming this should be written on a simple document, but not sure what the best title of it might be.

Operating Agreement. Probably a good idea to have your personal attorney's look it over before y'all sign.
answered Mar 23 '12 at 06:23
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Micah
116 points
  • Thanks for the direction. Yes, this is very helpful. =) – Box Cat 5 years ago
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LLC Partner California IRS