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Ownership of an LLC is held as a membership interest. Moving it from one person to another is mostly a private matter between members. The state may not even record it. But the paperwork you keep, and a few official updates, still matter.
Step 1. Check the operating agreement
The operating agreement is where transfer rules live. Look for:
- whether members can sell or give away an interest freely;
- whether other members must approve;
- whether existing members get the first chance to buy;
- how a price is set;
- how a new member signs on.
Single member companies should read the single member agreement guide. Companies with several owners should read the multi member guide. If there is no written agreement, your state's LLC statute applies. It varies by state, so read it or ask an attorney.
Step 2. Document the transfer
Put the deal in writing. A short assignment or purchase agreement should name the old and new owner, the percentage moved, the date and any price. Update the operating agreement or sign a new one so the member list is right. All members who must approve should sign.
Step 3. Check what the state records
Some states do not list members at all. Georgia's Secretary of State FAQ says LLC members and managers are not listed, and Virginia's SCC FAQ says it keeps no record of them. In those states a sale may need no state filing about owners.
Other states do list people. Wisconsin's LLC report form names a manager or member. Connecticut's statute has the certificate list a member or manager. If a listed person leaves, you may need an amendment or a report update. Search the company on our owner lookup guide to see what your state shows.
Step 4. Update the IRS
The IRS defines a responsible party as someone who owns, controls or exercises effective control over the entity. Its responsible party page says to report a change using Form 8822-B within 60 days. The Form 8822-B page confirms that form also covers business address changes. See what is an EIN.
Step 5. Think about tax
The IRS LLC page sets the defaults. One member is disregarded. Two or more is a partnership. Selling part of a one member LLC, or one member buying out another, can change which default applies. The tax result may also involve gain or loss, which we do not cover. Read LLC taxes and talk to an accountant before you sign.
Step 6. Update other records
- The bank signer list and account owner.
- Contracts, leases and licences in the LLC's name.
- Insurance policies.
- Your registered agent details, if the old owner was the agent.
Where a company wants to keep owner names off public indexes, see anonymous LLC.
This page is general information, not legal or tax advice. An attorney should review a sale of any real value.
To create a new LLC instead, begin at /start-an-llc/.