Questions around adding a member to my single-member LLC


First I'd like to thank everyone for the Q&A's on this board. I've already spend hours reading many posts here.

I'm a developer who started a sole-member LLC here in California for my mobile web application / consultancy company three months ago. I have my EIN, and a separate business bank account, etc. I have been invoicing clients regularly, paying myself via writing myself checks from my company bank accounts, and so far things have been running smoothly.

I'm to the point now where I'm ready to add another member to my LLC to help take on more work and bigger projects. I have a long-time experienced developer friend who I know, trust, and have worked with, who is ready to come onboard.

My questions are:

  1. I plan on giving him 50% ownership. How do I go about adding him to my sole-member LLC? Would I need to convert it to an LLP or corporation? I don't believe so since I've heard many people working under one LLC.
  2. Even though we both own the company equally, this member and I would do consulting work for clients who pay the LLC. Biweekly, we then pay ourselves via the company checkbook for the hours we worked. Come tax time, we pay tax on the percentage of total income we brought into the company. Does this make sense?
  3. How should this new member pay me back for half of the costs I've incurred these last three months? Additionally should I just withdraw half the balance in the business checking and have him add in his half as an investment?

Thanks, I have yet to get an accountant but am actively looking for one now.

LLC Partner

asked Sep 29 '11 at 11:05
111 points

1 Answer


Not sure if California is the same, but this article may help.

answered Oct 1 '11 at 06:37
108 points

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LLC Partner