To change a member’s ownership percentage in your limited liability company (LLC), you’ll need to consult your operating agreement. As a legal document, your operating agreement should include the names of all LLC members as well as their financial stake in your company. What’s listed in your operating agreement is binding, so you’ll need to go through an official amendment process in order to make any changes.
How do I amend my LLC operating agreement?
Since your operating agreement is an internal document, you won’t have to file any paperwork with the state. However, you will have to create an LLC Operating Agreement Amendmentand put it up for a vote. If approved by your members, you’ll create a written resolution for members to sign, then amend your operating agreement accordingly.
What if I included ownership information in my formation documents?
If you included the names of your LLC’s members as well as their percent interest in your company when you filed formation documents with the state, then you will ALSO have to file LLC Articles of Amendment. This usually involves filing paperwork with the office of the Secretary of State and paying a fee, but the process (and cost) will vary by state.
What if I don’t have an LLC operating agreement?
If your LLC doesn’t have an operating agreement to outline certain procedures (like amendments and voting), then your company must abide by your state’s default rules. While you may follow the state’s guidelines, it’s a good idea to write an operating agreement that suits the needs of your business. You may use the free, attorney-drafted templates on our LLC Operating Agreement page to help get you started.