To add a member to an LLC in Michigan, start with your operating agreement: it controls who has to approve the new person and on what terms. If the agreement is silent, Michigan’s Limited Liability Company Act requires unanimous consent of all existing voting members.1Michigan Legislature. Michigan Code 450.4501 – Members; Admission; Liability for Acts, Debts, or Obligations After the vote, you amend the operating agreement in writing, file a Certificate of Amendment with the state only if your Articles of Organization actually change, and handle the tax fallout, which is significant if you’re going from one member to two.
Start With the Operating Agreement
Pull the operating agreement first. If it sets a procedure for admitting members, follow it exactly. Some agreements call for a simple majority, others for a supermajority or unanimous consent. Many also attach conditions: a minimum capital contribution, an approved buy-in price, or a right of first refusal for existing members.
If your LLC has no operating agreement, or the agreement doesn’t address new members, the statute fills the gap and every existing voting member must agree.1Michigan Legislature. Michigan Code 450.4501 – Members; Admission; Liability for Acts, Debts, or Obligations That default surprises people when one holdout can block the admission, and it’s a good reason to have an agreement that picks its own threshold.
Direct Admission Versus Buying Someone’s Interest
There are two paths. In a direct admission, the new person acquires a membership interest from the LLC itself, usually by contributing cash, property, or services. Alternatively, an existing member can assign all or part of their interest to someone else.
An assignment alone does not make the recipient a full member. The assignee gets the right to receive profit distributions, but no voting rights and no management authority unless the other members admit them under the operating agreement or by unanimous consent.1Michigan Legislature. Michigan Code 450.4501 – Members; Admission; Liability for Acts, Debts, or Obligations People routinely assume that buying part of a member’s interest makes them a member. It doesn’t.
Amend the Operating Agreement in Writing
Once the members approve, put it on paper. The amendment should state the new member’s name, the size and form of their capital contribution, their ownership percentage, how profits and losses will be split, and what voting rights they hold. If the contribution is property or services rather than cash, spell out the valuation.
Every member signs, including the new one. This document stays inside the LLC and is not filed with the state, but it’s the record that will decide any later dispute. Vague or skipped, it becomes the source of the fight.
When You Have to File With LARA
Michigan’s Articles of Organization don’t list individual member names, so adding a member by itself doesn’t trigger a state filing. You file a Certificate of Amendment (Form 715) with the Department of Licensing and Regulatory Affairs only if the new member causes a change to something that is in your articles.2Michigan Department of Licensing and Regulatory Affairs. Certificate of Amendment to the Articles of Organization
The usual trigger is a change in management structure. If you ran a manager-managed single-member LLC and the incoming second member will also manage, your articles need to reflect that the LLC is now member-managed. A common amendment reads: “The management of the limited liability company is vested in its members.” Other article-level changes, like a name change or a change to purpose or duration, also require Form 715. If nothing in the articles is changing, you can skip this step.
To complete Form 715 you’ll need the LLC’s exact legal name and its LARA identification number, a six- or nine-digit number on your Articles of Organization or prior filings.3State of Michigan. Registration FAQs The form also asks for the original filing date and the exact text of the amendment. The filing fee is $25.2Michigan Department of Licensing and Regulatory Affairs. Certificate of Amendment to the Articles of Organization As of June 2025, online filings run through LARA’s MiBusiness Registry Portal, and you can also mail Form 715 with a check or money order payable to “State of Michigan.”4Michigan Department of Licensing and Regulatory Affairs. Corporations Division
Tax Consequences of Going From One Member to Two
If your LLC had a single owner, adding a second member changes its federal tax classification. A single-member LLC is a “disregarded entity” for tax purposes, with all income and expenses flowing to the owner’s personal return. Once there are two or more members, the IRS automatically reclassifies the LLC as a partnership.5Internal Revenue Service. Single Member Limited Liability Companies
The reclassification means a new Employer Identification Number. The IRS requires a new EIN when an entity’s ownership structure changes in a way that alters its tax classification.6Internal Revenue Service. When to Get a New EIN Going forward, the LLC files Form 1065 (U.S. Return of Partnership Income) annually and issues a Schedule K-1 to each member.
If your LLC already had multiple members, nothing changes federally. It was already filing as a partnership, and the new member just gets their own K-1. Either way, the transition is where a tax professional earns their fee, especially for a mid-year admission and for setting up the new member’s capital account.
Housekeeping After the Admission
Update the membership ledger to reflect the new ownership percentages. If you issue membership certificates, prepare one for the new member. Adjust the capital accounts to reflect the incoming contribution, cash, property, or services.
Add the new member as an authorized signer on bank accounts if they’ll handle finances. Review contracts, insurance policies, and licenses that reference specific members or the management structure for updates.
Michigan requires every LLC to file an Annual Statement with LARA each year, reporting the current resident agent and registered office. The Annual Statement doesn’t list individual members, but keep the information on file accurate; failing to file for two consecutive years puts the LLC out of good standing and frees up your name for someone else to claim.7Michigan Department of Licensing and Regulatory Affairs. Annual Filings As of 2025, annual statements must be submitted online through the MiBusiness Registry Portal.4Michigan Department of Licensing and Regulatory Affairs. Corporations Division
What About FinCEN Beneficial Ownership Reporting?
You may have read that the Corporate Transparency Act requires reporting beneficial owners to the Financial Crimes Enforcement Network when membership changes. As of March 2025, FinCEN published an interim final rule exempting all domestic companies from BOI reporting.8FinCEN. Beneficial Ownership Information Reporting Only entities formed under foreign law that have registered to do business in the United States still have to file. For a standard Michigan LLC owned by U.S. persons, adding a member does not currently trigger a FinCEN filing. This area has shifted more than once, so it’s worth checking again before you rely on the exemption.