Add partner to an LLC

[shahzadb]

I own a car dealership running while I have an LLC, where I’m the sole person in charge. I have a investor (brother) who will give me commission or salary from sales profits

looks like I would become an employee which I am totally fine with it. Do I need to do anything with my LLC at state registration office or create an Inc or S Corp? Because investor wants some surety too.



the investor will profit most or all of the capital to run the operation & I will get W2 or 1099 Depending on state law (Virginia)

 

[Taxing Matters]

It's not really clear how you operate now and how you are going to change it. Just to be clear, are you saying you are the sole member (owner) of a LLC that operates a car dealership? And is the idea here that your brother will buy out your business and become the owner of the dealership and keep you on as an employee? If so, how is that deal going to be done? Will he buy the assets of the dealership from the LLC, or is he going to buy the LLC itself from you?

 

[shahzadb]

It's not really clear how you operate now and how you are going to change it. Just to be clear, are you saying you are the sole member (owner) of a LLC that operates a car dealership? And is the idea here that your brother will buy out your business and become the owner of the dealership and keep you on as an employee? If so, how is that deal going to be done? Will he buy the assets of the dealership from the LLC, or is he going to buy the LLC itself from you?

Currently I & another employee works with me as sales commission. now he is leaving


Investor will provide cash, I buy cars & sell. We split profit 50/50. Investor has no role in Ops other than giving $$. It’s like becoming partners. Reason I said employee is because dealership laws says a salesperson gets W2 not 1099 in VA. I’m not selling my biz or investor buying assets. Just to continuing the Ops.

 

[zddoodah]

I own a car dealership running while I have an LLC

This sentence is extremely vague. You own the dealership? Meaning you, individually? Or does your LLC own the dealership? What does the word "running" mean in the context of this sentence?

where I’m the sole person in charge.

You mean you're the sole member of the LLC?

Currently I & another employee works with me as sales commission. now he is leaving

Ok...what does that have to do with the things mentioned in your original post?

Investor will provide cash, I buy cars & sell. We split profit 50/50. Investor has no role in Ops other than giving $$. It’s like becoming partners.

No, it's not like that at all.

As far as I can discern from your posts, you are the sole member of an LLC that owns a car dealership. Someone who is presently not affiliated with the LLC or the dealership has approached you about investing in the business by giving you an infusion of cash in exchange for payment of 50% of the profits. Is that about right?

If I've got the facts right, then the answer to your question is no, you don't need to form a separate corporation or "do anything with [your] LLC at state registration office." You could, however, do either or both of those things. Nor would this arrangement necessarily make you an employee or independent contractor, but either of those things could happen.

Since you pretty clearly don't know what you're doing, you should retain the services of a local attorney to help you with this contemplated transaction. Your would-be investor should do likewise, but that's not really your concern.

 

[shahzadb]

This sentence is extremely vague. You own the dealership? Meaning you, individually? Or does your LLC own the dealership?

I own as I created an LLC as owner and that dealership is run under that LLC.

What does the word "running" mean in the context of this sentence?

running means that dealership is already operating, I didn't wanted someone to reply back throwing all those regulation of how to setup dealership etc

You mean you're the sole member of the LLC?

Yes

Someone who is presently not affiliated with the LLC or the dealership has approached you about investing in the business by giving you an infusion of cash in exchange for payment of 50% of the profits. Is that about right?

Yes

If I've got the facts right, then the answer to your question is no, you don't need to form a separate corporation or "do anything with [your] LLC at state registration office." You could, however, do either or both of those things. Nor would this arrangement necessarily make you an employee or independent contractor, but either of those things could happen.

Maybe you misread my posts. How do I add partner to my current LLC? it could be dealership or real estate investor company.

 

[Just Blue]

Why are you starting multiple threads on the same basic topics? Please, one thread per topic is all that is needed. By keeping it to one thread it allows the volunteers here to have a fuller picture of the situation without having to search your posting history.

 

[LdiJ]

I own as I created an LLC as owner and that dealership is run under that LLC.


running means that dealership is already operating, I didn't wanted someone to reply back throwing all those regulation of how to setup dealership etc



Yes




Yes


Maybe you misread my posts. How do I add partner to my current LLC? it could be dealership or real estate investor company.

It would be best to use an attorney to add your partner to your LLC. You need a properly written agreement.

 

[quincy]

Because you obviously have numerous questions about your LLC(s), spread out over several threads, it is clear that you would benefit from the personal attention of an attorney licensed to practice in your own jurisdiction.

And please do not start any additional threads on what is essentially the same matter. Thanks.

 

[shahzadb]

Why are you starting multiple threads on the same basic topics? Please, one thread per topic is all that is needed. By keeping it to one thread it allows the volunteers here to have a fuller picture of the situation without having to search your posting history.

I can post one post and have all different questions in one post or make it easier to have separate posts on different topic

Show me which posts are same?

 

[quincy]

I can post one post and have all different questions in one post or make it easier to have separate posts on different topic

Show me which posts are same?

Your questions all appear to be related. One thread is best.

 

[FlyingRon]

Again "run the business" is distinct from "owning the business." You refuse to answer direct questions and seem to be trying constantly to weasel around the law. I see audits and worse things in your future if you don't get help.

 

[LdiJ]

Again "run the business" is distinct from "owning the business." You refuse to answer direct questions and seem to be trying constantly to weasel around the law. I see audits and worse things in your future if you don't get help.

I think that we are talking about English as a second language. I think that he is actually trying to answer our questions.

 

[zddoodah]

I own as I created an LLC as owner and that dealership is run under that LLC.

While, as a practical matter, you might regard yourself as owning the dealership, there's a big difference between you owning the dealership and you being the sole member of an LLC that owns the dealership. If that weren't the case, then you wouldn't have bothered to create the LLC.

Maybe you misread my posts. How do I add partner to my current LLC?

I read what you wrote perfectly. What you wrote was jumbled and vague. As far as the question, you don't. LLCs don't have partners. LLCs have members. The specific mechanics for adding a new member to an LLC depends on the applicable state law, and I don't know anything about Virginia LLC law. I imagine, however, that it's a pretty simple matter, but you still should consult with a local attorney to ensure you do it correctly.

 

[LdiJ]

While, as a practical matter, you might regard yourself as owning the dealership, there's a big difference between you owning the dealership and you being the sole member of an LLC that owns the dealership. If that weren't the case, then you wouldn't have bothered to create the LLC.



I read what you wrote perfect. What you wrote was jumbled and vague. As far as the question, you don't. LLCs don't have partners. LLCs have members. The specific mechanics for adding a new member to an LLC depends on the applicable state law, and I don't know anything about Virginia LLC law. I imagine, however, that it's a pretty simple matter, but you still should consult with a local attorney to ensure you do it correctly.

A multiple member LLC is however treated as a partnership for tax purposes, unless the LLC elects to be treated as an S-Corp for tax purposes.

 

[Litigator22]

I own a car dealership running while I have an LLC, where I’m the sole person in charge.

I'm not sure what you purpose here is, but if it has to do with how to add another person or entity to an existing limited liability company with ownership interest the answer can be found in Virginia's Limited Liability Act * at Section 13.1-1038.1 "Admission of Members". (And please note the word "member" and the absence of the word "partner" in the Act. The later being a term that has significant legal consequences when in association with a jointly controlled commercial activity.)

Also, inasmuch as you appear to be unfamiliar with the very laws under which you are conducting business you would do well to consult with a knowledgeable lawyer. One purpose being to avoid the appearance of operating the dealership as your alter ego and finding yourself personally liable for the business debts. Assets that I assume you intended to protect by use of the LLC vehicle. (Excuse the pun).
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[*] https://law.lis.virginia.gov/vacodepopularnames/virginia-limited-liability-company-act/