Centreville, VA asked in Business Formation and Business Law for California

Q: Adding a new member to a single-member LLC

I established a single-member LLC in California in 2018. Now, I would like to add another member to this LLC by giving him 50% of the ownership. I already received a new EIN from IRS for this two-member LLC. Now the question is what form do I need to file on California State's website? Do I need to file a modified Article of Organization? Do I need to file a new Statement of Information? Thanks for your help.

1 Lawyer Answer
Kristina M. Reed
Kristina M. Reed
PREMIUM
Answered
  • Sacramento, CA
  • Licensed in California

A: I recommend that you consult with your CPA and a business attorney. Your question poses a few layers.

First, unless the Articles of Organization prevent additional members, the LLC can have more than 1 member without the need to file Amended Articles of Organization. If you are unsure, then you should have the Articles reviewed by a business attorney.

Second, you will need to file an updated Statement of Information with the California Secretary of State to note the change in members.

Third, the LLC should not have needed a new EIN. You should consult with your CPA about the LLC having 2 EINs.

Lastly, you should consult with a business attorney about drafting an Operating Agreement. An Operating Agreement is the contract between the members and the LLC that details management and member rights.

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