Q: I want to switch my LLC to my husband’s name, for him to have full ownership. Can you help?
Thank you to a client from Minnesota for that great question! Since our client is simply transferring her single-member LLC over to her spouse, the process is fairly straightforward. In other cases, selling an LLC to new owners can be much more complicated, so it’s a good idea to seek the advice of an attorney. The first step when transferring ownership of a Minnesota LLC is to consult your operating agreement. Once you’ve transferred ownership, you should update the Secretary of State when you file the Minnesota Annual Renewal. We’ll walk you through the steps of changing the owner of your Minnesota LLC.
1. Follow your LLC operating agreement’s policies.
First, review your Minnesota operating agreement and follow your LLC’s internal policies for transferring membership interest. In most cases, you can only transfer ownership of an LLC if all members are in agreement.
What if my LLC doesn’t have an operating agreement?
If your LLC doesn’t have an operating agreement, it will need to follow the default laws in the Minnesota Revised Uniform Limited Liability Company Act for transferring ownership. Minnesota law allows for LLC ownership to be transferred (with the consent of all members).
3. Update LLC ownership information on the Minnesota Annual Renewal.
Once your Minnesota LLC has changed owners, you’ll need to inform the Secretary of State. You can do this just by filing your Annual Renewal and listing the new owner’s name and address on the form. The Minnesota Annual Renewal can be filed online, by mail, or in person, and is free to file. The due date is December 31st each year.
4. Update your LLC operating agreement.
Next, update your operating agreement and include the new owner’s name, address, and ownership percentage (in our client’s case, 100% ownership).
5. Change your IRS responsible party.
Lastly, when your LLC changes owners, you will also need to change your responsible party with the IRS. The responsible party is the person you listed on your EIN application who has the authority to make financial decisions for your LLC. To change your IRS responsible party, you’ll file IRS Form 8822-B.