There are many reasons to add another member to a Limited liability company (LLC) operating agreement. It might be because you need more capital or new talent that might benefit the business.
However, not following the proper steps to add original LLC members to the operating agreement in Florida can lead to problems later within the operating group.
As legal advisors and attorneys with over ten years of experience in the field, we’ve conducted thorough research and shared our personal experiences to help you understand the intricacies of the process.
- To add a new LLC member in Florida, review the Operating Agreement, obtain the new member's Consent, amend the Articles of Organization, update the Operating Agreement, and notify the State of Florida.
- It is essential to consult with a knowledgeable attorney to ensure you meet all legal and financial obligations during the process.
- You can file the Florida LLC Articles of Amendment online through the Florida Division of Corporations’ website.
1. Understand the Consequences
Before adding a new LLC member and amending the operating agreement, it is crucial to understand its consequences.
After all, you are not just adding any regular person to your limited liability company. They will be equal shareholders with complete control of the company's assets and are entitled to a share in the profits.
Therefore, your company must adhere to specific requirements and take on new responsibilities. This will help avoid problems like harmful tax implications or personal liability.
When adding someone as an LLC member, consult with your company's attorney to give you legal advice as per Florida law and your operating agreement.
2. Review Your Operating Agreement
Reviewing your Florida LLC operating agreement before adding new LLC members is essential.
Changing an LLC operating agreement can be overwhelming and time-consuming make changes to an LLC operating agreement, especially if you've let the Florida Department of State (DOS) copies go out of date; or, worse, not even send in an amended annual report for years at a time.
Additionally, it is relatively common for members in a Florida LLC operating agreement to add provisions prohibiting additional members at some point.
For example, the Florida operating agreement provides that ownership percentages are locked in until a specific date. So it's better to review it.
Ensure the agreement doesn’t include any provisions violating state or federal laws. It shouldn’t also undermine the rights of the members.
Finally, consider seeking legal counsel to assist you in reviewing the operating agreement. A professional attorney may give you insight that may help identify potential issues. An attorney can also ensure the agreement accurately reflects the interests of all parties.
3. File Any Required Tax Forms
You are changing the tax structure if you add new members to your LLC operating agreement in Florida.
As a result, it's important to file any required amendments or tax forms with the Florida Department of Revenue, Division of Corporations .
Remember that some filing deadlines may be mid-month, so it can require a lot of work for the registered agent to submit all the necessary paperwork to this Florida department.
In many cases, registered agent services can help file papers and forms and send out annual reports for registered agent fees .
4. Prepare and Vote on an Amendment To Add an Owner to LLC
You’ll use the amendment form to add a new LLC member or more members. After the current members approve and execute the amendment, the new LLC member will have an equal share of ownership as all other owners.
The new LLC members will then be owners in the new operating agreement after all owners approve, execute, and sign the amendment.
5. Amend Articles of Organization for a Florida LLC
You’ll amend the Articles of Organization to change the contract governing the LLC's operation between members.
For example, if a new member(s) are being added, it's essential to update this article to introduce new rights and responsibilities to the new member(s).
It's important to create amendments that correspond with new agreements between members in the form of new articles, new operating agreements, etc.
Can the Florida LLC Articles of Amendment Be Submitted Online?
The Florida Articles of Organization can only be filed online. Still, the Articles of Amendment must be submitted to the Division of Corporations as a hard copy, on a paper document.
1. Send Florida LLC Articles of Amendment
You can submit the Articles of Amendment by regular mail or in person.
- By mail:
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
Division of Corporations
The Centre of Tallahassee
2415 N. Monroe Street, Suite 810
Tallahassee, FL 32303
2. Contacting the IRS
Get in contact with the IRS with the information the IRS has on file about your business changes. Adding a new member to your multi-member LLC means you don’t have to file any paperwork, but you should notify the IRS about the changes.
You must file Form 8832 if you add a new limited liability company member to an SMLLC because it makes it into a multi-member LLC . Your tax filing status will change from “disregarded entity” to “partnership.”
Can I Restate the Initial Articles Instead of Filing a Florida LLC Amendment?
You can restate the initial articles instead of filing a Florida LLC Amendment if all members agree. However, it's important to remain mindful of state statutes and ensure the original document is amended before filing. It applies whether it's a manager-managed or member-managed LLC.
How Long Does It Take to Process the Florida Articles of Amendment?
Processing Florida Articles of Amendment takes 7-10 business days. The processing time may vary depending on the state.
How Much Does It Cost to File Florida Articles of Amendment?
To file Florida Articles of Amendment costs $25. Additionally, the state doesn't offer to expedite this process.
Should You Add a Member to Florida LLC?
You should add a member if it will positively impact your LLC and if it outweighs the troubles of amending the operating agreement.
There are advantages and disadvantages to adding a new LLC member, which we have shared in this article after extensive research and personal experience.
You should also consider the company's current needs or obtain advice from your attorney or legal advisor before sending the amendment to the Division of Corporations. Check out Incfile to help you through the process of amending your Florida LLC's operating agreement with ease.
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