So I've got a single-member NC LLC for my woodworking side gig. My buddy wants to buy in and become a co-owner. Do I just add him to the Articles of Organization or what? I'm not trying to pay a lawyer if I can avoid it.
LLC Changes
I want to add a second owner to my North Carolina LLC
Not a lawyer but I dealt with this last year. The Articles of Organization only show the initial organizer(s). You need an operating agreement to add a member, and you might need to file an amendment with the NC Secretary of State if your original articles listed members. Check your filing.
Operating agreement is key. If you don't have one, make one now. Otherwise you're just two bros with a saw and a dream.
Also think about taxes. A single-member LLC is a disregarded entity by default. Adding a second member turns it into a partnership (or corp if you elect), which means a new EIN and a partnership tax return. Don't forget that part tbh.
YardGnome covered it but you'll likely filee a Certificate of Amendment (Form L-01 or whatever it's called now) with the NC SOS to add him as a member if your articles named members. It's like $50. And update your operating agreement to show ownership percentages. Don't skip that.
Appreciate the specifics. I'll dig out my articles and see what's listed. Sounds like the operating agreement is the real document that matters here.
One more thing: decide upfront how you split profits and what happens if one of you wants out.Handshake deals with friends go bad. Put it in writing even if it's a simple one-pager.
You could also just form a new multi-member LLC and merge, but that's overkill. Amendment + operating agreement is fine fine.
RustyNailer beat me to it but I'll add: if you go the partnership route, you'll also need to file a new EIN. The IRS doesn't let you keep the old one when you add a member. Quick online application.
Oh and double-check whether your county or city has any business license updates needed when ownership changes. Some do, some don't. Probably not a big deal but worth a call.