Generally, anybody can be a member of an LLC. No special requirements exist for LLC membership in most LLCs, except companies with multi-member LLCs (LLCs with more than one member) must meet state laws requiring that at least one person is required to be a resident of said Company.
However, retired people and minors may not be members of a limited liability company in some states.
In most cases, however, individuals can be members if they are at least 18 years old.
Additionally, non-united states citizens cannot form LLCs where the law prohibits this practice. For example, in California, non-residents cannot form LLC companies.
How Many Members Can Be In an LLC?
LLC businesses can choose to have multiple members or remain single-member LLC.
LLCs are not limited in the number of members, but other factors may limit how many LLC members should be involved in a business venture.
That's why it's essential to research LLC laws in your state regarding LLCs with only one member and multi-member LLC companies.
LLC businesses can have unlimited members because they aren't required to file a particular document with their state to become recognized LLCs.
However, a new LLC business may need to consider the number of LLC members they wish to have and other factors, such as LLC taxes and legal implications.
Is There a Minimum Number of Members in an LLC?
No. Unlike corporations that require at least one director, no minimum or a maximum number of members exist in LLC companies.
However, some states may impose restrictions on the formation of single-member LLC (LLC's with only one member).
For example, California allows the incorporation of a company with only one member under certain conditions.
Single-member LLC in California can be formed if the sole member is an individual, corporation, or other LLC.
Finally, while having more than one member in an LLC isn't obligatory, some companies choose to have more than one member for tax purposes and benefits unrelated to legal issues.
How Do I Add LLC Members?
The first step to adding new LLC members is to check your State's LLC rules.
Every state has different procedures for adding members, and by not checking the rules first, you could be running afoul of state statutes and jeopardizing your business.
While most states specify that all owners of an LLC company must be added in writing, some states require a formal vote to add new members.
Other states have no requirement of an approval process, so you could technically add a new member on the spot.
Check with your state's LLC statutes or contact a business lawyer for more information about adding an LLC member.
When adding a new LLC member, it is common to have a new member sign an operating agreement between themselves and the LLC.
Operating agreements can be complex, but it is generally best practice.
After checking your state's LLC rules and creating a written operating agreement between the new members and LLC company, you must notify all the existing LLC members of the new addition(s).
The final step of adding an LLC member is documenting this change with your state's Secretary of State business filings.
It's best to contact your Secretary of State for specific instructions on adding LLC members into your Company.
Who Are the LLC Managers?
LLC members are known as managers. LLC members may be involved in the daily operations of the LLC company or may hire managers to run the business for them.
However, before hiring an outside manager or allowing members to manage the Company, all LLC owners must have a unanimous vote of approval from all LLC members, just like other significant decisions.
A Company's Operating Agreement is the only way to amend who manages an LLC company, so make sure you have an Operating Agreement in place before trying to add new LLC managers.
On the other hand, if you allow LLC members to manage the Company, it's important to document this change with your Company's Operating Agreement and obtain signature(s) from all LLC members.
Read More: What is an LLC Managing Partner?
The Company Operating Agreement should otherwise remain unchanged, regardless of whether there are one or several LLC members involved in the Company's day-to-day operations.
What Is a Manager-Managed LLC?
In a manager-managed LLC, an Operating Agreement can be used to specify who manages the daily business of the LLC and how they may do so.
Member(s) running the LLC company usually does not require any particular formality, but it is best to have an Operating Agreement in place.
In a Member-managed LLC, all LLC members share equal management rights and must approve significant changes to the business.
In this type of company structure, no Operating Agreement is necessary because all LLC members are allowed to take part in Company's day-to-day operations.
Can an LLC have a president and CEO?
Yes, an LLC member can have a President and CEO. It's fairly common for LLC members to take on those roles as well.
What Are the Roles in an LLC?
Limited liability companies allow small business owners to have limited liability protection without having to incorporate.
An LLC member can play one of three roles: member manager, member-only, and none.
How Is an LLC Governed?
An LLC is governed by its Operating Agreement. There are also times that a Managing Member of Directors governs it.
If you are planning your governing structure, it is important to seek legal advice from an attorney of a law firm.
Are LLC Owners Members or Partners?
Generally, the answer to this question is "members." Sole proprietorship and LLCs owned by one owner are considered sole members.
When an LLC has two or more owners, it must choose either a partnership or corporation.
LLC Member Requirements: Conclusion
Overall, there are no particular requirements in business law for someone to become part of an LLC, as long as you think they're qualified to be part of your LLC.