How to add members to your LLC
Whether you’re the only member of your limited liability company (LLC) or you want to add more members, there are some very specific steps you need to take and rules that you must follow.
This guide will walk you through everything from starting with one member to adding new members down the road so that your business stays in good standing with the IRS and follows all state laws regarding LLCs.
Check your operating agreement
A business owner needs to know the rules and regulations in their jurisdiction before starting an LLC. Doing so will help you avoid legal issues down the road.
In most cases, adding members requires a vote from at least two-thirds of existing LLC members. The agreement may specify a different percentage of votes or require that all voting rights be exercised by those who are present and entitled to vote, in person or by proxy.
LLC can be created with one member, who is also considered the managing member and has the right to manage the company on behalf of other LLC members.
File the appropriate paperwork with your state
To form an LLC American Samoa, a person must file the Articles of Organization with the Secretary of American Samoa. The articles are required to include the following:
- The name of the LLC.
- The address of its principal office.
- Its duration, if it is not perpetual.
- Other facts are needed for identification.
It is also necessary to file copies of the articles with the Registrar of Companies at least 10 days before holding a meeting or issuing shares.
Furthermore, owners or managers may be appointed by a written resolution signed by all members entitled to vote. One owner can hold more than one position, but not if they conflict.
Hold a meeting to vote on the new member
An LLC can be made up of a single member or several members. When the LLC is formed, one person is typically responsible for managing all business aspects.
This person is also called a member. If you already have an LLC with one or more members and would like to add another member, follow these simple steps:
- Notify all other LLC members that you are adding someone new by sending them a notice.
- This notice should include the new member’s name and contact information and state that they will assume some company ownership responsibilities.
Send notice of the new member to the other LLC members.
You can add new members by submitting a written notice of the new member and the name of the person that will be responsible for fulfilling any obligations.
The LLC should then have a meeting within thirty days of adding the new member and make any necessary changes to its operating agreement.
This includes, but is not limited to, amending any provisions relating to membership interests and voting rights, management rights, distributions, or other matters.
If opening an LLC in American Samoa, you must appoint an agent to service the process.
That means you must provide the Secretary with an address where you can be served with legal papers. You cannot use a post office box as your mailing address or email address as your contact information.
Have the new member sign the operating agreement
To be added as a new member of the LLC, you must sign the company’s operating agreement. This document outlines each member’s rights and responsibilities, how much they’re entitled to receive in distributions, and other important information.
If you don’t have an operating agreement already drafted, it’s best to consult an attorney or accountant specializing in these matters. Once you’ve signed the document and returned it with any requested changes, a copy will be sent back for your records.
Welcome the new member!
Your LLC is finally up and running! Congratulations! Now that you have an LLC, it’s time to consider adding a new member.
Adding a new member allows for more flexibility in the company. For example, if one of the current members would like to leave the company, they can be replaced with a new person who will still have the same rights and obligations as any other member.
On top of that, if you want to change your operating agreement at any point, it’s much easier with only two people than with three or more! Plus, by adding a new member now rather than later on down the road, you’ll save some legal fees when it comes time to terminate someone’s membership.
One of the great things about LLCs is that it is not necessary to be a U.S. citizen or resident in order to incorporate an LLC in the territory.
If you have a keen interest in doing so, you should know that there are a number of requirements you will need to fulfill before starting the process.
To start an LLC, you will need at least one owner and one member with at least 50% ownership. You must provide accurate information on your application, including an address for the location of the business, contact information for at least one authorized representative, and any other information that may be requested during this process.
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