Q: What is the procedure to add a member to an LLC?
Thank you to a customer from Delaware for that great question! As an LLC owner, you may at some point want to bring a new member/co-owner on board, which requires amending your LLC operating agreement. Here are answers to common questions about adding members to a Delaware LLC.
What’s the process to add a member to a DE LLC?
First, you must consult your Delaware LLC operating agreement. You can only add a member to your LLC if your company’s internal policies allow for it. Once you’ve established that you can add a member, you need to amend your operating agreement.
How do I amend my Delaware LLC operating agreement?
Your operating agreement should include a procedure for how it can be amended. The process can vary depending on the rules you’ve established, but generally, you’ll need the approval of all current LLC members. You will need to draft a member resolution, which is a written record that you have agreed to make a change to your LLC, and it needs to be signed by all members.
After you’ve amended your operating agreement, you will also need to issue a membership certificate to the new member and to any other members whose membership interest has changed.
Check out our free LLC Operating Agreement Amendment template.
Can I add a member to an SMLLC?
Yes, but it requires an extra step. If your LLC changes from a single-member LLC into a multi-member LLC, this also changes its tax classification with the IRS. That’s because single-member LLCs are taxed as sole proprietorships by default, whereas multi-member LLCs are taxed as partnerships. To update the IRS on your LLC’s new status, you should file IRS Form 8832.
Do I need to contact the Delaware Secretary of State when I add a member to my LLC?
No. Delaware LLCs aren’t required to report the names of their members on public documents, so you don’t need to inform the Secretary of State’s office when you add a new member.
Learn more about Updating Ownership Info for a Delaware LLC.