Q: I need support to add a member to the LLC.
Thank you to a client from Utah for that great question. It’s common for LLCs to add new members over time. In Utah, when you add a member to an LLC, you need to inform the UT Division of Corporations by filing an LLC Registration Information Change Form. We’ll walk you through the steps of adding a member to a Utah LLC.
1. Vote to Add an LLC Member
In order to add a member to your Utah LLC, you’ll need to follow your operating agreement’s procedure for adding new members. In most cases, you will need to hold a vote of all LLC members, and you’ll need unanimous approval to add a new member. You should also draft an LLC member resolution, which should be signed by all members and kept with your business records.
Of course, if you currently have a single-member LLC, you don’t need to hold a vote with yourself to add a new member. However, you’ll still need to update your operating agreement.
2. Amend Your Utah LLC Operating Agreement
Next, you should amend your Utah LLC operating agreement to include the new member’s name and membership interest (percentage of ownership). For any other LLC members whose membership interest has changed, you’ll need to document their new percentage of ownership in the operating agreement. You can also use our free membership certificate template to document each member’s interest in the LLC.
What if my LLC doesn’t have an operating agreement?
Without an operating agreement, your LLC will be subject to Utah’s default laws for LLCs. According to UT Code § 48-3a-401, in the absence of an operating agreement, you need the consent of all members to add a new member to an LLC.
Do I need to file my operating agreement with the UT Division of Corporations?
No. An operating agreement is an internal document that should be kept with your LLC’s records. It isn’t filed with the state.
3. File the UT Registration Information Change Form
When adding or removing a member from an LLC, the state of Utah requires you to submit an LLC Registration Information Change Form to the Division of Corporations, which costs $13. You can also use this form to change your business purpose, change your Utah registered agent, or update your business address.
The Utah Division of Corporations encourages you to submit this form online via Utah.gov. However, you can also file it via mail or fax.
Can I add a member by filing a Utah LLC amendment?
No. A Utah LLC amendment can only be used to update your LLC name, business purpose, management structure, or period of duration. To add a member to your LLC, you must use the Registration Information Change Form.
4. File Form 8832 with the IRS
Finally, if adding a new member changes your LLC from a single-member to a multi-member LLC, you will need to inform the IRS by filing Form 8832, Entity Classification Election. That’s because single-member and multi-member LLCs have different tax classifications by default. Single-member LLCs are taxed as disregarded entities by default, whereas multi-member LLCs are taxed as partnerships.
On the flip side, learn how to remove a member from your Utah LLC.