Adding a new member to an LLC is not a difficult process. The best place to start is by reviewing the LLC’s current operating agreement and articles of organization. These two organizational documents usually contain information about the proper procedures for admitting a new member.

If the LLC is member-managed, then consent of the specified amount of membership interests will be required to admit the new member as per the LLC operating agreement. If the LLC is manager-managed, the manager’s approval will be required. In New York, if the LLC operating agreement does not specify the required consents then the default law requires a vote or written consent of a majority interest in the LLC (NY LLC Law Section 602).

Once the new member has been voted in, the next step is amend the operating agreement or draft a new agreement to reflect the addition of the new member. The roles or each member, duties, responsibilities, distributions, allocations, and voting rights should be included in the operating agreement.

Note that an LLC operating agreement is a private contract, and it is not filed with the NY Department of State or any other government agency. Further, in New York the names and addresses of members are not required in the Articles of Organization (unless the LLC is a Professional Service PLLC), thus there’s usually not a need to update the LLC’s articles of organization, although the articles of organization should be reviewed as a precaution.

The IRS also does not require notification upon addition of a new member because they are essentially notified at the end of the year when the LLC’s tax return is filed. If the LLC is changing from a single-member LLC to a multi-member LLC then a different form will be filed by your tax professional (IRS Form 1065 Return of Partnership Income).

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