How does an LLC add new members?

Typically, when an LLC is formed, the operating agreement or articles of organization specify how new members may be added. Unlike single-member LLCs, which naturally hold no votes, multi-member LLCs require a vote of unanimous consent by all members in order to add a new member. The normal steps for adding new members is as follows:

  1. Review the operating agreement and articles of organization
  2. Review your state’s requirements on your state website
  3. Notify all current members of the upcoming vote
  4. Determine the buy-in amount and profit sharing plan for the new member (this may be included in the operating agreement and is normally voted on by existing members)
  5. Hold the full vote of the membership according to the operating agreement
  6. Draft and sign an LLC membership admission agreement clarifying the new members' rights and obligations
  7. Draft an amendment of the operating agreement and articles of organization reflecting new members, as necessary
  8. File the amended documents with your state, if required (typically done through the Secretary of State)
  9. Notify the Internal Revenue Service (IRS) of updated members and file any required tax forms
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