If your LLC changes hands, you’ll need to make sure your information is current both internally and with the Rhode Island Department of State. Here’s how:
What is required to transfer LLC ownership in RI?
To transfer LLC member shares from an existing member to someone new, LLC members (i.e. owners) must follow the procedures outlined in their Rhode Island LLC Operating Agreement. Each company is responsible for drafting and adopting its own operating agreement, so details will vary from company to company. But most operating agreements include a buy/sell provision, which lays out instructions for how to buy and sell company ownership percentages.
The process is a little different when, say, a single-member LLC (SMLLC) gets sold directly from one person to another, since a direct sale does require a valuation of member shares. However, whether selling a percentage of your company or the whole shebang, you should check in with the Rhode Island Department of State.
Do I need to file paperwork w/ the Rhode Island SOS?
Maybe—it depends what information you have on-file with the state. Rhode Island doesn’t require LLCs to include member information when filing RI Articles of Organization, so you may not need to change anything with the state. However, if you included member information in your articles, you’ll need to submit Rhode Island LLC Articles of Amendment, along with the associated $50 filing fee.
While member information is not required when submitting articles, Rhode Island does require manager-managed LLCs to provide manager names and addresses. If you own a manager-managed LLC and your change in ownership also affects your managers’ information, then you’ll have to submit a RI Statement of Change to the Rhode Island Department of State. There is no filing fee for a statement of change.
Should I change my RI LLC operating agreement?
Yes. Operating agreements are legal documents that contain detailed information about a company’s day-to-day operations and its business structure—including the names of all LLC members. When LLC ownership changes, so too must its operating agreement.
How do I change my RI LLC operating agreement?
The legal process for changing your operating agreement is usually specified in the operating agreement itself. If, for some reason, your operating agreement doesn’t contain a provision for making amendments, you’ll have to consult the default LLC laws in The Rhode Island Limited-Liability Company Act.