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J.Hazelbaker
J.Hazelbaker, Attorney
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I have established an LLC. If I want to add another member,

Resolved Question:

I have established an LLC. If I want to add another member, is there a form that needs to be filled out for that or what exactly do I need to do.
Submitted: 2 years ago.
Category: Business Law
Expert:  J.Hazelbaker replied 2 years ago.

J.Hazelbaker :

Hello. Thank you for using JustAnswer.

J.Hazelbaker :

There is no requirement that a change of this nature be filed/submitted under Maryland law.

J.Hazelbaker :

You may wish to do so by filing an amendment form:

J.Hazelbaker :

http://www.dat.state.md.us/sdatweb/llcamend.pdf

J.Hazelbaker :

However, what is necessary is that you amend the organizing documents of your LLC (the Articles of Organization) to reflect the addition, the addition's capital account, and other necessary changes where there are more than one member (e.g. dispute resolution, valuing shares in the event one wants/needs to leave, exit strategies, divorce and inheritance of shares), if those provisions weren't included in your original Articles.

J.Hazelbaker :

Please let me know what follow-up questions you have. If my above responses have been helpful, please click Accept so that I get credit for the time/effort. You may always restart the thread and ask follow-up questions at any time by clicking the “Reply” button at the bottom of the question/answer thread. You can access this thread later in your profile under the “My Questions” tab.

Customer:

I was in Baltimore at the DAT today. As you mentioned, legal counsil there confirmed that the state of Md does not require more than one person to be on an LLC. However, they hinted that the rules may be different for filing taxes. Do the need to be 2 or more owners for tax filing purposes?

J.Hazelbaker :

A single member LLC is considered a pass through entity by default, meaning that income is taxed only at the personal level.

J.Hazelbaker :

A two member LLC can opt as a pass-through or elect to have income taxed at the company level and the personal level.

J.Hazelbaker :

That selection needs to be made by you and your new partner.

Customer:

So they would need to fill out a 1040 ?

J.Hazelbaker :

And it needs to be included in the Articles of Organization.

J.Hazelbaker :

Yes. 1040 Schedule C

Customer:

Now if there is a division of ownership say 80% / 20% would it still be a 1040 or a different form?

J.Hazelbaker :

Same form

Customer:

OK. Thank you !

J.Hazelbaker, Attorney
Category: Business Law
Satisfied Customers: 4385
Experience: Experienced and trained in the area of business law.
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