One of the many benefits of establishing your business entity as an LLC in New York is the ease with which you can add or change members. To get started, consult your LLC’s current Articles of Organization, along with your Operating Agreement, to review any guidelines or stipulations they may contain regarding the proper procedures for admitting a new member.
There are only a couple of simple steps to follow to add a new member to your LLC:
1.A member-managed LLC may require the consent of a specified number or percentage of existing members to add another member. If your LLC is manager-managed, you will need the manager’s approval. In New York State, unless your Operating Agreement specifies the required consent of other members, the default law mandates a majority vote or a written consent of the LLC’s majority.
2.Once a new member has been admitted to your LLC, you should either amend your Operating Agreement or draft a new one. Your new or amended Agreement should reflect the newly added member and delineate each member’s roles, duties, responsibilities, distributions, allocations, and voting rights.
3.You do not need to file your Operating Agreement with the State of New York, it is an internal document for your LLC members only. Unless you are a professional LLC (PLLC), you are not required to include the names or contact information of your members when you file your Articles or Organization with the state.
4.You do not need to notify the IRS of your added member, since the agency will be made aware of it when taxes are filed at the end of the year. However, if you go from being a single-member LLC to a two-or-more-member LLC, you will need to file a different tax form at the end of the year, IRS Form 1065, Return of Partnership Income.
Help With Incorporation in New York State
Navigating the rules and regulations of the New York State Department can be time-consuming and confusing, especially if you are busy trying to get your new business up and running.
At Windsor, we pride ourselves on helping you get your business entity legally established, with minimal hassles and headaches. Contact Windsor today, and let us take the guesswork out of incorporation for your new or existing business.