How do you change a Sole Member LLC to a Partnership LLC.?

The prior attorney offers sound advice. Also, be sure to get a membership certificate that is like a stock certificate that shows your ownership interest. Also, once you become a member the LLC will have to file a Form 1065, partnership return, at the federal level. You will get a K-1 each year to report your earnings from the LLC. Be sure to also get a copy of the Form 1065 each year for your records if a dispute ever arises. Finally, work out how the two of you are to be compensated and to determine if any wages are going to be paid. Hope this helps. Please remember to designate a best answer to your question. Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is [email protected] , his website is www.sjfpc.com . and his blog is

The documentation of a limited liability company that was properly set up should include not only the Articles of Organization filed with the state but also an Operating Agreement (multiple members) or Operating Declaration (single member). The Operating Agreement/Declaration should include provisions regarding the addition of new members. Also, the Operating Agreement/Declaration should include a declaration of the current ownership interests of the current owners, expressed in either a percentage of the total ownership or a number of ownership units (like stock shares). From my experience, some LLCs don't have an Operating Agreement or Operating Declaration. If not, now is the time to create one with the assistance of an attorney. That document will govern your business relationship and will set out the ownership interests of the members. If the LLC does have a current Operating Agreement or Operating Declaration, now is the time to review it to make sure everything is in accordance with the agreements you and your friend have in regards to your joining the business and how it will operate. If there are concerns, he can amend the Operating Agreement/Declaration before you join in, or you can join the company contemporaneously with a joint amendment of the Operating document to meet your needs and agreements. Once all Operating Agreement issues are resolved, I usually draft a simple Assignment of LLC Interests from the current sole member to the income member, transferring whatever ownership percentage or ownership units the two parties have agreed upon. (Note: for tax reasons and valuation reasons, it matters whether the owner transfers some of his personal interests to you or whether the company issues additional interests to you directly, and you should consult with a CPA regarding which method works best in your situation.) I also usually draft an accompanying agreement that expresses whatever agreements there are between the parties, such as what the new member will contribute or bring to the company in exchange for an ownership interest in the company. Typically an Operating Agreement or Declaration has an Exhibit attached that lays out the owners, their addresses and their ownership interests (or some other statement in the document that expresses the owners and their interests) Whether you create an Operating Agreement, amend an old one, or make no changes, this part of the Operating Agreement or Declaration should be updated to reflect your information and ownership interests. One of the other answers suggested creating a Certificate that expresses your ownership interests in the LLC, much like a stock certificate. From my experience, few small LLCs use certificates, but I do agree that creating LLC certificates is a best practice that additonally substantiates the ownership interests of each member.