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Can I add my mother to my LLC, and allow her to invest all

her funds to the LLC...
Can I add my mother to my LLC, and allow her to invest all her funds to the LLC account, letting her be added as a signer to the account. What are the legalities when investing in a business?
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Answered in 5 minutes by:
9/3/2013
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 56,025
Experience: 32 years of experience practicing law and a businessman.
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Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. Yes, she can easily become a member of your LLC. Any funds contributed would not result in any tax-recognition upon the transfer under either Section 721 or Section 351 of the Internal Revenue Code depending upon whether your LLC is being taxed as a partnership or a corporation. To have her admitted, you would need to amend and restate your Operating Agreement for the LLC to spell out the terms and conditions of her ownership in the LLC and to deal with issues including: i) additional contributions, if necessary, ii) her ownership interest; iii) allocation of income and losses, iv) distribution of available cash; v) transfers of ownership interests in the LLC in the event of 3rd party offers, death, divorce, bankruptcy, etc. You would then take the Operating Agreement to your bank and instruct the bank to add your mother as a signatory on the LLC account.


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Customer reply replied 4 years ago

Thanm you for the information. I have one more question for clarification...Could my brother or sister see my mother's name on the LLC if I added as a signatory on the LLC account?

You're welcome. No...that is not public information.
Richard
Richard, Attorney
Category: Business Law
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Richard
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