Q: I have a single-member LLC and want to add another member. What do I need to do?
Thank you to a customer from Colorado for that great question! If you want to add a member to a Colorado LLC, you will need to amend your LLC operating agreement. You may also need to contact the IRS. We’ll walk you through the process.
Can I add a member to an existing LLC in Colorado?
Yes! LLCs frequently gain or lose members over time. In Colorado, to add a member to an LLC, you simply need to update your Colorado operating agreement.
How do I amend my Colorado LLC operating agreement to add a member?
Generally, your operating agreement will include a policy for how it can be amended. Most of the time, to amend your operating agreement, you’ll need to:
- Hold a meeting of all members
- Draft a resolution (to add a member)
- Vote on the resolution
- Pass the resolution (if a majority vote in favor)
- Keep the member resolution with your records
Your operating agreement should include the names and addresses of all LLC members, so once you have passed a resolution to add a member, you should update your operating agreement to include the new member’s information.
Do I need to amend my Colorado LLC Articles of Organization when I add a member?
No. The Colorado Articles of Organization do not ask for the names of LLC members, so you do not need to amend your articles of organization when you add a member.
Do I need to inform the IRS when I add a member?
It depends. In most cases, you don’t need to inform the IRS when you add a member to your LLC. However, if your LLC is changing from a single-member LLC into a multi-member LLC, this changes your entity classification with the IRS, so you will need to file Form 8832. That’s because single-member LLCs are taxed as “disregarded entities” by default, whereas multi-member LLCs are taxed as partnerships.