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I am a member in a two-member LLC. The other member and I…

I am a member in...
I am a member in a two-member LLC. The other member and I agreed to change the % of ownership from this year on. Is it sufficient to just amend the operating agreement, e.g., by changing the capital contribution section? Plus, by changing the % in 1065 and K-1 tax forms, when due? The LLC has been in operation for a couple of years, but with no profits.
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Answered in 10 hours by:
3/12/2018
Lori
Lori, Attorney
Category: Business Law
Satisfied Customers: 2,105
Experience: Business law attorney with over 25 years experience
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H​ello. Let me see if I can assist. In addition to the items you mentioned ---If you have a membership agreement with the other member, that agreement will also need to be amended. Additionally, you will need to re-issue the membership certificates in the corporate book for the LLC and change the certificate log to reflect the current % ownership.

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Lori
Lori, Attorney
Category: Business Law
Satisfied Customers: 2,105
Experience: Business law attorney with over 25 years experience
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Customer reply replied 4 months ago
Thanks for responding. Unless we should, we don't have an additional membership agreement or issue membership certificates. Our only governing document is the operating agreement -- so is it sufficient to amend it and we are OK? Then, the current operating agreement indicates the initial capital contributions to be provided -- is it OK to just revise the value of these contributions? Or provide some language to reflect that these are not bases on the initially agreed contributions?Could there be any circumstances under which the change in the ownership % could trigger an LLC dissolution by the state? I haven't found anything on this in VA LLC Act, plus the ownership % is only reflected in the operating agreement and tax forms. We have agreed to revise the ownership % without applying a particular formula, including based on additional contributions by members. The current operating agreement is also silent on whether we can re-determine the ownership %.
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