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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39039
Experience:  Retired (mostly)
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I have a single member LLC, incorporated in Arkansas. An individual

Resolved Question:

I have a single member LLC, incorporated in Arkansas. An individual is going to become a member and will be actively involved in the operation of the business according to an operating agreement yet to be devised. They will be purchasing a 30% ownership in the company by paying cash directly to the company in exchange for 30 units of stock. The individual is not a U.S. citizen and is located in a foreign country. This is all preliminary so I am trying to discern how I might proceed with this transaction and what type of information I will need to include in order to complete it, what I need to be aware of when effecting a transaction of this type with someone from another country and so forth. I cannot really afford to retain an attorney at least at this stage in the process so I hope to work out as much of the details as I can and perhaps use an attorney for any of the necessary final paperwork that I cannot complete myself.
Submitted: 7 years ago.
Category: Business Law
Expert:  socrateaser replied 7 years ago.

The only substantive issue here is that your proposed partner cannot be an active participant in the business, unless (1) all of that person's work is conducted outside of the USA, or (2) the person has the necessary immigration visa to work "in" the USA. If you have questions about what your proposed partner may need to do in order to obtain the necessary immigrations visa, please post a separate question to the immigration law category.


Assuming that the immigrations issue is no roadblock to your partnership formation, then please be aware that an LLC does not issue "stock." Corporations issue stock. An LLC simply has an operating agreement, and amendments thereto, under which a member's identity and interest in the LLC is stated.


Concerning formation of an LLC or producing articles of organization, operating agreement, and registering with the appropriate state agencies, there are several websites that can assist with the paperwork:


Please let me know if you have further questions.


Hope this helps.


Customer: replied 7 years ago.
Thank you for your answer That helps to clear up some of my questions. There is no issue as to the person working as all of their work will be conducted in their country on behalf of the company. We are an Internet services company that services clients throughout the world and nothing we do is "on site" with a client but from the confines of our computer so to speak.

As to the "issuance of stock" my explanation was not good. What I meant is that the person is purchasing an ownership in the company which is already a registered LLC, currently registered as a single member (me) and that in addition to an operating agreement would receive an official "Membership Certificate" that certifes their percentage of interest n the company and clearly states it is subject to the duties and obligations as set forth in the articles of organization/operating agreement/regulations for this LLC. (Kinda looks like a stock certificate but of course is simply a percentage of interest membership certificate)

I guess my biggest concern is simply making certain the transaction of receiving money from someone in another country as a purchase of a partial ownership in my company complies with any laws such as the patriat act and so forth and needed paperwork is completed so it doesn't come back and bite me later.
Expert:  socrateaser replied 7 years ago.

There is no U.S. law prohibiting the transfer of money into the USA. Transfers of more than $10,000 must be reported to the IRS, but that is the only requirement, and if the transaction is done through a bank, then the bank will handle that issue entirely.


The only issue would be if the investor is from a foreign nation that is considered hostile to U.S. interests (Iran, North Korea, Cuba, etc.). Then, there could be an issue, but not if the money transfer is cash. Only where goods and services are transferred, do the terrorism laws start to kick in. Evidently, Uncle Sam believes it can track cash without difficulty.


Hope this helps.


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