Membership Admission Agreements in Ohio

Add a New Member to Your LLC

You may be thinking of taking on an investor for your business and adding them as an owner of the company (owners of a LLC are called members); or there may be some other reason you want to add a new member to your LLC.  The best way to add a member to your LLC and ensure that it is done properly is to consult with an attorney.  The law firm of Harris & Engler is located in Columbus, Ohio and its' attorneys help businesses in Franklin, Delaware, and Union County as well as all across Ohio.

Can You Add a New Member to Your LLC?

The first step to adding a new member to your LLC is to make sure that the existing business structure allows for it.  The Operating Agreement is like the Constitution of the company and it controls how adding a new member to the LLC can be done, and whether it can be done at all.  If the current operating agreement is nonexistent or incompatible with your goals of adding a new member, then you will first have to either amend or restate the terms of your operating agreement (or create one in the first place).

Does Adding a New Member Dilute Your Ownership Share?

One of the most important considerations in adding a new member to your LLC is to control how the new member's ownership stake affects the existing owners' percentage of ownership.

You will want to consult with an attorney in order to get the desired result when issuing new membership units to a new member, because if this is done without also issuing new membership units to the existing owners, then all of the existing owners' stakes in the company will have been diluted.  There are a number of different options for dealing with this situaiton and the attorneys at Harris & Engler can offer a range of solutions to you and your business.

Capital Contributions?

Another consideration in admitting a new member to your LLC is whether the new member will have to buy-in the ownership stake or whether the new member will essentially be able to buy their ownership stake through sweat equity, or working for it.

New Member's Role in the Company

There are a few logistical aspects of admitting a new member as a part owner of your company, such as what their role (if any) will be with the company, how they will be compensated for such role, or if they will be a hands off owner (silent partner).  Depending on whether the new member has already been working with the company, and whether they are buying into their ownership share or working for their ownership share then the existing owners will want different checks and balances on the new member. There should be clear cut expectations in case the new member does not work out, and there should be clear provisions in either an employment contract or in the operating agreement about what to do about getting a member out of the company forcibly if necessary.

New Membership Agreement Attorneys

If you need a business attorney to help you with admitting a new member to your LLC please do not hesitate to call an attorney at Harris & Engler by calling (614) 610-9988. You can talk to an attorney today about all of your business needs.  The law firm of Harris & Engler has offices located in Columbus, Ohio.