Legal Question in Business Law in New York

Add new member to single-member LLC in NY

I set up an LLC in NY as a single-member LLC. I now understand

this was not a good idea (LLC's should ideally be partnerships).

So I want to add a member to my LLC. This will be a trusted

friend who will not be an active partner but whose involvement

will mean the LLC is a real partnership.

-Can I do this by simply issuing shares to this person or must I

file somewhere in NY?

-What would be an acceptable share for such a partner who I

completely trust? Maybe 5% or 10%?

Thanks for taking the time to read this.


Asked on 5/05/09, 12:33 pm

2 Answers from Attorneys
Steve Brodsky Esq. CheapNewYorkLLC.com

Re: Add new member to single-member LLC in NY

First, the statement that an LLC should have more than one owner is not true. As far as an acceptable share, that's up to you. There is no "typical" setup. Five or 10 percent would work fine, but so would 1% or 49%.

Here are the steps:

1. Prepare a membership purchase agreement to reflect the new member's purchase of membership interest.

2. Prepare an amended operating agreement to reflect the new ownership structure.

Note: If you never prepared an original operating agreement, then simply prepare one and ignore the two steps above.

If you need help, my fees are: $199 for number 1, $199 for number 2, or $199 for a new operating agreement. None of these documents need to be filed anywhere.

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Answered on 5/05/09, 12:44 pm
Michael Markowitz Michael A. Markowitz, PC

Re: Add new member to single-member LLC in NY

I agree with Steve. An LLC is an entity to itself. Maybe there is a taxation issue that you do not properly understand. If that is the case you should speak with an accountant.

Mike.

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Answered on 5/05/09, 1:50 pm


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