What is needed to add my wife a co owner of my LLC?

Full Question:

I want to add my wife to our LLC as part owner. What forms would I need? How much ownership does she need to qualify for government grants?
03/23/2009   |   Category: LLC   |   State: Arizona   |   #15737

Answer:

The eligibility and membership requirements for grants will vary by the entity making the grant and the individual grant involved. AZ statutes do not require LLC's to file annual reports as Corporations do. However, LLC's must still report any changes to their known place of business address, statutory agent, or members/managers. Address changes or agent appointments may be done on the LLC statement of change form. Adding or removing members/managers must be done on the LLC amendment form . A LLC may make a resolution to amend the operating agreement. The LLC operating agreement may vary in complexity, and typically contains the following information:

* Company name and address information

* Registered agent information

* Name and address information for each LLC member

* LLC management structure and operation

* Items contributed by each Member

* Fair market value of each item contributed

* Date of company dissolution

* Accounting method

* Tax treatment for your LLC

* Sample LLC operating resolutions

* Appointment of LLC officers

* Designation of a final capital pay-in date

The following is an example of an section of an operating agreement of a LLC:

2.3 LLC Units

Ownership of the LLC shall be divided into and represented by units of the
LLC ("Units"). The LLC shall be authorized to issue six classes of units,
Common Units, Series A Units, Series B Units, Series C Units, Series D
Units and Series E Units. The total number of Units the LLC is authorized
to issue shall be 6,000,000, of which 1,000,000 shall be Common Units,
1,000,000 shall be Series A Units, 1,000,000 shall be Series B Units,
1,000,000 shall be Series C Units, 1,000,000 shall be Series D Units, and
1,000,000 shall be Series E Units.

2.4 Voting Rights of LLC Units

Each Common Unit shall be entitled to one vote per Unit, each Series A
Unit shall be entitled to 10 votes per Unit, each Series B Unit shall be
entitled to 10 votes per Unit, each Series C Unit shall be entitled to 10
votes per Unit, each Series D Unit shall be entitled to 10 votes per Unit,
and each Series E Unit shall be entitled to 10 votes per Unit.

2.5 Additional Members, Issuance of Additional Units

Additional Persons may be issued Units and admitted to the LLC as Members
upon compliance with the provisions of this Agreement and upon such terms
and conditions as the Managers may determine, provided that:

2.5.1no new class of Units or interests having rights or preferences

senior to those of the existing Units may be issued without the
approval of Members holding a majority of each class of such
outstanding subordinate Units; and

2.5.2the Managers may not issue more than the total number of authorized

Units, without the approval of the Members.

Existing Members may be issued additional Units, upon compliance with the
provisions of this Agreement and upon such terms and conditions as the
Managers may determine, provided that no new class of Units or interests
having rights or preferences senior to those of the existing Units may be
issued without the approval of Members holding a majority of each class of
outstanding subordinate Units, nor may the Managers issue more than the
total number of authorized Units of the LLC without the approval of the
Members.

A buy - sell agreement is useful in assuring the orderly transfer of interests in the partnership or corporation. I am prohibited from giving legal advice, as this service provides information of a general legal nature. I suggest consulting a local attorney who can review all the facts and documents involved.

The following are AZ statutes:

29-731. Admission of members

A. At the time the limited liability company is formed, a person becomes
a member by either of the following:

1. Being identified as a member in the initial articles of organization.

2. If the members are not identified in the initial articles of
organization, being identified as a member in and signing in person or by
an attorney-in-fact an operating agreement that exists at the time the
initial articles of organization are filed or being identified as a member
in a written statement certified, before or after the filing of the initial
articles of organization, by each of the managers identified in the initial
articles of organization.

B. After a limited liability company's initial articles of organization
are filed, a person may be admitted as an additional member as follows:

1. If a person is acquiring an interest in the limited liability company
directly from the limited liability company, on the limited liability
company's written acknowledgment or acceptance of the person's admission
under the applicable provisions of an operating agreement, or if an
operating agreement does not so provide, on the consent of all members.

2. If the person is an assignee of all or part of a member's interest in
a limited liability company, on the terms provided in an operating
agreement or, if an operating agreement does not so provide, on the
approval or consent of all members.

3. If the person is an assignee of an interest in the limited liability
company of a member who has the power under an operating agreement to grant
the assignee the right to become a member, on the exercise of the power in
compliance with all conditions limiting the member's exercise of the power.

4. If there are no members and all of the assignees consent in writing to
the admission of one or more persons as a member or members, unless
otherwise provided in the operating agreement.

29-633. Amendment of articles of organization; restatement; publication

A. The articles of organization of a limited liability company are
amended by filing with the commission the articles of amendment, signed on
behalf of the limited liability company by a manager if management of the
limited liability company is vested in one or more managers or by a member
if management of the limited liability company is reserved to the members.
The articles of amendment shall set forth:

1. The name of the limited liability company.

2. The text of the amendment to the articles of organization.

B. A limited liability company shall amend its articles of organization
if there is a statement in the articles of organization that was false or
erroneous when it was made or within thirty days after the occurrence of
any of the following events:

1. Any arrangements or facts have changed making the articles of
organization inaccurate in any respect other than those changes required to
be set forth in a statement delivered to the commission pursuant to
section 29-605.

2. Management of the limited liability company is reserved to the members
and there is a change in the persons who are members.

3. Management of the limited liability company is vested in a manager or
managers and there is a change in the persons who are managers or in the
members who own a twenty per cent or greater interest in the capital or
profits interest of the limited liability company.

C. A limited liability company may amend its articles of organization if
its articles of organization as amended contain only provisions that may be
lawfully contained in the articles of organization at the time of making
the amendment. In particular and without limitation on the general power of
amendment, a limited liability company may amend its articles of
organization to:

1. Change the name of the limited liability company.

2. Change, enlarge or diminish the purposes of the limited liability
company.

3. If management is reserved to the members of a limited liability
company, vest management of the limited liability company in one or more
managers.

4. If management is vested in one or more managers, vest management of
the limited liability company in the members.

D. A limited liability company may restate its articles of organization.
Restated articles of organization shall be executed and filed in the same
manner as articles of amendment. Restated articles of organization shall be
specifically designated as such in the heading and shall state either in
the heading or in an introductory paragraph the limited liability company's
present name and, if it has been changed, all of its former names.

E. A limited liability company that has not amended its articles of
organization as required by this section may not maintain an action upon or
on account of a contract or transaction made in the name of the limited
liability company in any court of this state until it has first amended its
articles of organization as required by this section. No person has any
liability because an amendment to articles of organization has not been
filed to reflect the occurrence of any event prescribed by subsection B of
this section if the amendment is filed within the thirty-day period
specified in subsection B of this section.

F. Within sixty days after the commission has approved the filing of
the articles of amendment or restated articles of organization there
shall be published in a newspaper of general circulation in the county of
the known place of business for three consecutive publications a copy of
the articles of amendment or restated articles of organization. An
affidavit evidencing publication shall be filed within ninety days after
approval by the commission of the filing of the amendment of the articles
of organization. Publication is not required if amendments to the
articles of organization are made solely in relation to changes in
managers or members of the limited liability company or changes made
pursuant to section 29-605.

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