Adding a member to Kentucky LLC

[johnsilver]

What is the name of your state? KY

I am trying to change both the name of my LLC and add a member with 25% ownership to what is currently a single member entity. I am aware that changing the name requires filing an "articles of amendment," but this only makes changes to the articles of organization which doesn't have a list of members. How do I go about adding a member? PS: if I got anything wrong here I apologize, I am a bit new to this.

 

[adjusterjack]

I don't see any forms for adding a member. And, in looking, at the Articles of Amendment I'm not sure that's appropriate for a name change.

Business Forms Library - Secretary of State (ky.gov)

Business Filings Information - Secretary of State (ky.gov)

I suggest you call up and ask for help.

 

[LdiJ]

What is the name of your state? KY

I am trying to change both the name of my LLC and add a member with 25% ownership to what is currently a single member entity. I am aware that changing the name requires filing an "articles of amendment," but this only makes changes to the articles of organization which doesn't have a list of members. How do I go about adding a member? PS: if I got anything wrong here I apologize, I am a bit new to this.

Why are you wanting to change your current LLC rather than just starting a new one with the new name and ownership?

 

[quincy]

Why are you wanting to change your current LLC rather than just starting a new one with the new name and ownership?

Dissolving the old and starting anew seems to me to be just as much work as amending the original LLC would be.

 

[Zigner]

Adding a member can be done, but there are tax implications as well. The OP will need to decide which route to go, but the OP really should seek out local counsel on this matter. It's not (really) a DIY project.

 

[Taxing Matters]

Adding a member to the LLC will make it a partnership for federal tax purposes unless you elect to have it treated as a S-corporation or C-corporation. As far as tax law is concerned, it's a new entity regardless of whether you amend the current LLC documents or form a new one and will need its own EIN (that taxpayer identification number for all taxpayers other than individuals). Depending on how exactly you want the partnership to work, you may need to have specific tax provisions written in the LLC or operating agreement to ensure you get the most favorable tax treatment. That's something about which I encourage you to see a tax professional (enrolled agent, tax CPA, or tax attorney) for advice.

I think it would be a good idea to have a business law attorney assist you with drafting the new charter and operating agreement, too. Now that you'll have a partner, the terms of those become much more important as they will govern the relationship between you and your partner. You want a well drafted set of documents that will accurately reflect what the two of you expect the deal to be. Online forms aren't really ideal for this. They leave too many things unaddressed and may provide for terms that you wouldn't want.

Yes, all this means spending some money for professional advice. But in the long run getting good advice at the start can save you a whole lot more money down the line compared to what you'd have if you do it yourself. Note that legal and tax advice is a deductible expense for the business.

 

[LdiJ]

Dissolving the old and starting anew seems to me to be just as much work as amending the original LLC would be.

In my area at least, it's much easier.

 

[quincy]

In my area at least, it's much easier.

Mine, too.

This might help johnsilver organize his thoughts as he contemplates reorganizing his LLC:
https://onestop.ky.gov/manage/Pages/leaving.aspx