Q: We [added] another board member… should [we update] our documents?
Thank you to a customer Ohio for this great question! It’s common for companies to change member information over time. And when this happens, you will have to update certain documents. Here’s what you need to consider when adding a member to your Ohio LLC:
1. Make sure you comply with Ohio’s Revised LLC Act
According to Ohio Rev Code § 1706.27, an Ohio LLC may add a new member in any of the following ways:
- As included in your operating agreement
- As the result of a merger
- With the consent of all members
- As designated by the people to last hold the membership interest of the LLC’s last remaining member (within 90 days of their dissociation)
The bottom line is: you’ll need consent from all your current LLC members before you can add another member.
How do I distribute membership interest to the new member of my Ohio LLC?
LLC members typically make an initial contribution to the LLC in the form cash, property, services rendered, or a promissory note (like an IOU) promising any one of those things. In exchange, LLC members receive membership interest in the form of distributions. However, not every LLC member must make contributions or receive distributions, according to Ohio law. (See: Ohio Rev Code § 1706.281 and Ohio Rev Code § 1706.27.)
To determine what’s right for your business—including how to best distribute membership interest—you might want to consult a business attorney.
2. Update your Ohio LLC Operating Agreement
Anytime your business changes in a way that’s no longer consistent with your Ohio LLC Operating Agreement, you’ll have to update your operating agreement. All members must consent to any changes made to your operating agreement, unless your operating agreement itself specifies another procedure for making amendments. (See: Ohio Rev Code § 1706.082.)
3. Check your Ohio LLC Articles of Organization
Ohio does not require LLCs to include member information in their articles of organization, and nor does the state ask for member information. So, chances are you won’t have to amend anything with the state.
What if I included member information in my Ohio LLC Articles of Organization?
If your LLC member information is included in your articles of organization, you’ll have to file a Certificate of Amendment or Restatement ($50). You may file online or by mail. (Note that you’ll send your form to a different address if you plan to pay for expedited filing, $100.)
Online: Ohio Business Filings
By Mail:
Ohio Secretary of State
P.O. Box 1329
Columbus, OH 43216
By Mail, Expedited Filing:
Ohio Secretary of State
P.O. Box 1390
Columbus, OH 43216
4. Contact the IRS
You’ll need to contact the IRS if your IRS tax status changes. This will happen if you go from a single-member LLC to a multi-member LLC, since your default tax status will change from “disregarded entity” to “partnership.” If this is the case for your LLC, you’ll need to Apply for a New EIN.