A very common question we get asked at our law firm of McGrath and Spielberger is “What do I need to do to add an owner to my company?” The answer to that exact question is similar to the related question of “How do we transfer the ownership interests of a Member who is leaving the LLC?” Of course, you can also have a situation in which a current Member is only transferring or selling some of that Member’s interests in the company.
This Part 5 of our ongoing series focuses on the filings that can or should be made with the Secretary of State as a result of a change in ownership / membership. See Part 1 of this series for a general overview of sale / purchase / transfer of company membership interests and the legal process, Part 2 for more information on the Purchase and Sale Agreement / Membership Interest Transfer Agreement, Part 3 regarding “Resolution” which should be a part of the membership interest (ownership) transfer process, and Part 4 for important information about Operating Agreement issues.
A transfer of membership / ownership interests in an LLC can, and sometimes should, result in new filings with the Secretary of State. The most common change, but not necessarily the only one, would be made by filing an Amendment to Articles of Organization. That Amendment could identify the changes in ownership structure. Similar information would be contained in the next-filed Annual Report, at least in states like North Carolina which require your typical limited liability company to file such reports.
Whether such an Amendment to Articles of Organization should be filed – and what exactly it should say – will depend on each specific circumstance. An Amendment document on file with the Secretary of State would be evidence of what information the Amendment contains.
An example of another appropriate filing with the Secretary of State would be for the LLC’s Registered Agent. (Click here for an explanation of Registered Agents.) If the Registered Agent has been an outgoing LLC Member, it would almost certainly be preferable to change the identity of the Registered Agent. That change is made by filing documentation with the Secretary of State, and of course the new Registered Agent (which could be our law firm, if the company is located in the Carolinas) has to have given permission.
These sorts of LLC filings are commonly worked on by business law attorneys. However, attorneys need to pay attention and have their brains and skill sets engaged even when performing straightforward work. Paying attention gets the best results for clients, which is what we do here at McGrath & Spielberger.
If you’d like assistance with business compliance services, please click here: https://mcgrathspielberger.com/business-compliance-services/.