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.
That's why we have conducted thorough research and shared our personal experience as legal advisors and attorneys with over 10 years of experience in the field.
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 limited liability company. 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 new LLC members, 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 a limited liability company, the first thing you must do is consult with your company's attorney, who can give you legal advice as per Florida law.
Review your Operating Agreement
It's important to review your Florida LLC operating agreement before adding new LLC members.
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to make changes to an LLC operating agreement, especially if you've let the Florida department of state (DOS) copy go out of date; or worse, not even sent in an amended annual report for years at a time.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 LLC operating agreement in Florida, 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 in Florida .
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 to this Florida department.
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 an 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 LLC member will have an equal share of ownership as all other owners.
The new LLC members 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 the Florida LLC Articles of Amendment Be Submitted Online?
The Florida Articles of Organization can only be filed online, but the Articles of Amendment must be submitted as a hardcopy, on a paper document.
1. Send Florida LLC Articles of Amendment
The Articles of Amendment can be submitted 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 LLC means that you don’t have to file any paperwork, but the IRS should be notified about the changes made.
You need to file a form called Form 8832 if you add a new LLC member to an SMLLC because adding a new member to an SMLLC makes it into a multi-member LLC . This means that your tax filing status will change from “disregarded entity” to “partnership.”
Can I Restate the Initial Articles Instead of Filing a Florida LLC Amendment?
Yes, you can restate the initial articles instead of filing a Florida LLC Amendment 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. It applies whether it's manager-managed or member-managed LLC.
How Long Does It Take to Process the Florida Articles of Amendment?
It takes 7-10 business days to process the Florida Articles of Amendment. The processing time may vary depending on the state.
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.
Should You Add a New Member to Florida LLC?
If you think it will have a positive impact on your LLC, you should add a new member.
There are advantages and disadvantages to adding a new member to your LLC, which we have shared with you 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.