There are many reasons to add another member to a Limited liability company (LLC) operating agreement. It might be that more capital is needed, or new talent might benefit the business.
However, suppose you do not follow the proper steps to add original members to the operating agreement in Florida. In that case, it can lead to problems later on within the operating group. After all, many essential things must be considered when adding new members to an LLC.
Understand the Consequences
Before adding a new member to an LLC, it is crucial to understand its consequences.
After all, you are not just adding any regular person to your LLC. They will be equal shareholders who have complete control of the company's assets and are entitled to a share in the profits.
When you add a new member, your company must do certain things and take on new responsibilities. If not done correctly, this can cause many problems for your business, such as harmful tax implications or possibly lead to personal liability.
When adding someone as a member to an LLC, the first thing you must do is consult with your company's attorney, who can give you legal advice.
Review your Operating Agreement
It's important to review your Florida LLC operating agreement before adding a new member. It can be overwhelming and time-consuming to make changes to an LLC operating agreement, especially if you've let the Florida department of state (DOS) copy go out of date; or worse, not even sent in an annual report for years at a time.
Additionally, it is fairly common for members in Florida LLC operating agreements to add provisions prohibiting additional members at some point. For example, it might be that the Florida operating agreement provides that ownership percentages are locked in until a specific date, so it's better to review it.
File Any Required Tax Forms
If you add new members to your Florida limited liability company operating agreement, you are changing the tax structure.
As a result, it's important to file any required amendments or tax forms with the department of revenue and the Internal Revenue Service.
Keep in mind that some filing deadlines may be mid-month, so it can require quite a bit of work for the registered agent to submit all the necessary paperwork.
In many cases, registered agent services can help with filing papers and forms and sending out annual reports for registered agent fees.
Prepare and Vote on an Amendment to Add Owner to LLC
This amendment form will be used to add a new LLC member or more members. After this amendment is approved and executed, the new member will have an equal share of ownership as all other owners. The new member will be made an owner in the new operating agreement after this amendment is approved and executed, which will require signing by all owners.
Amend Articles of Organization for a Florida LLC
It is important to amend the articles of organization for a Florida LLC when new members are added.
An amendment to the articles of organization should be used to change the contract that governs the operation of the LLC between members. For example, if a new member(s) are being added, it's essential to update this article so that new member(s) have new rights and responsibilities.
It's important to create amendments that correspond with new agreements between members in the form of new articles, new operating agreements, etc.
Can I Restate the Initial Articles Instead of Filing a Florida LLC Amendment?
Yes. It is possible to restate the initial articles of the organization if all members agree to do so. However, it's important to remain mindful of state statutes and ensure that the original document is amended before filing.
How Long Does It Take to Process the Florida Articles of Amendment?
While processing time varies by state, the typical turnaround for filing an amendment is between 7-10 business days.
How Much Does It Cost to File Florida Articles of Amendment?
The current filing fee for a Florida Articles of Amendment is $25. Additionally, the state doesn't offer to expedite this process.