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Change of ownership for an LLC can be complicated and requires costly amendments in most U.S. states.
However, not in the state of Delaware. The only document required to be filed in Delaware to create an LLC is the Certificate of Formation.
Unlike other states, Delaware requires very little information to be made public in order to form an LLC.
The Certificate of Formation filed with the Delaware Secretary of State is required to contain only three items:
Information such as the member(s) name, address and the percentage of the business owned is not required to be provided to the state of Delaware and therefore is not part of the public record. This information is kept on file internally within the LLC's Operating Agreement.
The LLC's Operating Agreement can be altered as needed by the members, without filing the changes with the state of Delaware. Some of the typical changes people make are the removal or addition of a member or the change in percentage of a member's ownership.
The LLC's Operating Agreement must be amended to reflect that a new member is now part of the LLC, or to reflect the removal of a member, and all current members must sign the newly amended Operating Agreement, but you are not required to file the amended Operating Agreement with the state of Delaware.
Here are some sample LLC Operating Agreement amendments you can use for your own company. Please remember that these should be customized and thoroughly reviewed to make sure they meet the specific needs of your business.
Since there is minimal information on the Certificate of Formation filed with the state of Delaware, these amendments do not need to be filed or recorded with the state.
Your Delaware Registered Agent does not need to be informed of the change either; we only need to know if there is a change to the company's communications contact, address or phone number. So, unlike many other states, change of ownership for an LLC can be done quickly, easily and without incurring any fees.
Lastly, if you're creating your initial Operating Agreement (not amending one), we have additional free templates and additional information available here.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE. THE TEMPLATE DOCUMENTS ARE PROVIDED "AS IS", "AS AVAILABLE", AND WITH "ALL FAULTS", AND HARVARD BUSINESS SERVICES DISCLAIMS ANY WARRANTIES, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
There are 12 comments left for Change of Ownership For an LLC Is Easy in Delawareabdul said: Tuesday, December 24, 2019
if i want to open a new bank account for the llc through the new member they required the article form the state shows the new member for the LLCHBS Staff replied: Friday, December 27, 2019
Each bank will have its own requirements for opening a new account. It is best to check with the specific bank you're working with to understand what they will need. We can help you obtain any documents you need from the state of Delaware.Stephanie said: Monday, July 29, 2019
How do I transfer my DBA registration to another LLC?HBS Staff replied: Tuesday, July 30, 2019
Stephanie, unfortunately we don't offer a DBA service. We recommend contacting the state office where your DBA was registered and asking them about the best process for accomplishing what you need.S Poon said: Thursday, March 7, 2019
When transferring shares, do we need to amend the Articles of Organization? Is there such a thing in Delaware or there is just the operating agreement.HBS Staff replied: Thursday, March 7, 2019
For a Delaware LLC, ownership information and changes are typically not provided to state, just maintained in the internal operating agreement. Feel free to call or chat with us if you have additional quesitons.Linda Brooks said: Monday, March 4, 2019
Hello i have a partnership LLC i would like to be removed from however i am the responsible party how do i remove myself with the state of secretary and the irs theres 2 persons myself an another we have 50/50 ownership i just want out the LLC have been in existence for 9months still pretty new..please give me info on what an how to proceed...the partnership LLC is filed with state of delaware an irs..thank you..i need help i don't know where to beginHBS Staff replied: Tuesday, March 5, 2019
Linda - The LLC's Operating Agreement can be altered as needed by the members, without filing the changes with the state of Delaware. Some of the typical changes people make are the removal or addition of a member or the change in percentage of a member's ownership. The LLC's Operating Agreement must be amended to reflect the removal of a member, and all current members must sign the newly amended Operating Agreement.
We will need to know if our communications contact person changes, please email our team at firstname.lastname@example.org any updates or changes. They can be reached at 800 345 2677 ext 6903 a live person will answer immediately.
To change the responsible party of the LLC, you must inform the IRS. The form to change information on the LLC’s responsible party is IRS form 8822B. Instructions on how to file the change can be found on the form as well.Carlos said: Tuesday, January 15, 2019
I just formed an LLC in Delaware and I want to sell it to a friend. I can read here it's not complicated, but I'm not sure on how to proceed. What are the appropiate steps to do it, including sites to visit, forms to fill out and documents to submit? Thank youHBS Staff replied: Thursday, January 17, 2019
Hi Carlos - Since the name of the LLC members is not filed with the state, the change of ownership can typically be handled internally and should be noted on the LLC Operating Agreement (free templates above). You generally only have to file documents with the state if there is a change in the company name, company address, or Registered Agent. Please feel free to call or chat with us for specific questions.