To add a member to an LLC in Virginia, you need approval under your operating agreement (or by default vote under Virginia Code § 13.1-1038.1), a written amendment to the operating agreement setting the new member’s terms, and, in most cases, no filing with the State Corporation Commission at all. Virginia’s articles of organization don’t list individual members, so admitting one usually stays an internal matter. The exceptions, the tax consequences, and the paperwork you should keep are below.
Get the Required Approval
Virginia Code § 13.1-1038.1 governs how someone becomes a member. If a person is acquiring their interest directly from the LLC, they’re admitted on the terms your operating agreement lays out. When the agreement is silent, the statute’s default applies: a majority of managers must consent in a manager-managed LLC, and a majority of members must vote to approve in a member-managed LLC.1Virginia Code Commission. Virginia Code 13.1-1038.1 – Admission of Members
Which category you fall into depends on your articles of organization or operating agreement. If neither says, Virginia treats the LLC as member-managed by default, with management vested in the members.2Virginia Code Commission. Virginia Code 13.1-1022 – Management of Limited Liability Company That determines who votes and how many votes you need.
Put the approval in writing. The statute doesn’t require a particular format, but a signed resolution from the consenting members or managers protects everyone if the admission is challenged later.
Amend the Operating Agreement
The operating agreement is where the admission actually takes shape. Virginia gives LLCs wide latitude to structure internal affairs through the agreement, including creating classes of members with different rights and duties.2Virginia Code Commission. Virginia Code 13.1-1022 – Management of Limited Liability Company
The amendment should spell out the new member’s capital contribution (amount and form), ownership percentage, allocation of profits and losses, voting rights, and what happens if they leave or try to transfer their interest. If you already have a written agreement, you’re adjusting percentages and slotting the new member into the existing framework. If the LLC has been running without one, now is the time to create it.
Each member should have a separate capital account tracking contributions, allocations, and distributions. A new member’s account starts at the fair market value of what they contribute. For LLCs taxed as partnerships, the IRS looks at capital account maintenance when evaluating special allocations, so it’s worth setting these up correctly from the start.
Do You Need to File Anything With the State?
Usually, no. Virginia’s articles of organization require only three items: the LLC’s name, its registered agent and office, and its principal office address.3Virginia Code Commission. Virginia Code 13.1-1011 – Articles of Organization Individual members aren’t listed there. Adding one, on its own, doesn’t trigger a filing with the SCC.
You do need Articles of Amendment when the admission requires changing something that’s actually in your articles. That happens in a few situations:
- Your management structure is changing (manager-managed to member-managed, or the other way around) because of the new member’s role.
- Your articles contain optional provisions about membership classes or voting thresholds that now need updating.
- You’re also changing the LLC’s name as part of the restructuring.
If none of those apply, the operating agreement amendment handles everything internally.
How to File Articles of Amendment When Needed
File Form LLC-1014 with the SCC. The filing has to include the LLC’s name, the text of each amendment, the date it was adopted, and a statement that the members, managers, or organizers approved it.4Virginia Code Commission. Virginia Code 13.1-1014 – Amendment of Articles of Organization The fee is $25.5State Corporation Commission. Virginia Limited Liability Companies – Forms and Fees You can file online through the SCC’s Clerk’s Information System at cis.scc.virginia.gov, by mail, or in person in Richmond. Online is fastest, and it’s the only route eligible for expedited processing.6State Corporation Commission. Online Expedited Services Standard processing runs one to two weeks. Save the certificate of amendment with your LLC records.
Tax Consequences
The tax side catches single-member LLC owners off guard more than anything else.
A single-member LLC is a disregarded entity for federal tax purposes. The moment you admit a second member, the IRS reclassifies the LLC as a partnership, and you need a new EIN. You can’t keep using the old one.7Internal Revenue Service. Publication 5845 – Do You Need a New EIN Apply on the IRS website before the LLC’s first partnership return is due. If your LLC already has multiple members and you’re adding another, no new EIN is required.8Internal Revenue Service. When to Get a New EIN
Once classified as a partnership, the LLC files Form 1065 and issues a Schedule K-1 to each member showing their share of income, deductions, and credits. If you were reporting the business on your personal Schedule C, that ends the year the new member joins. The first partnership return covers the period from the admission date through the end of the tax year.
Assigning an Interest Is Not the Same as Admitting a Member
Virginia draws a clear line here. A member can assign their share of profits, losses, and distributions to someone else without needing the other members’ permission, unless the operating agreement says otherwise. But the assignee doesn’t become a member. They receive the money. They don’t get the vote.9Virginia Code Commission. Virginia Code 13.1-1039 – Assignment of Interest
For the assignee to gain voting and management rights, they have to be formally admitted through the process above.1Virginia Code Commission. Virginia Code 13.1-1038.1 – Admission of Members This distinction matters when a member wants to bring in a family member or sell part of their stake to an outside investor. Receiving the economic interest doesn’t put someone in the room where decisions get made.
Securities Law Flag
LLC membership interests are generally treated as securities under federal law. Selling or issuing an interest to a new member can trigger SEC registration requirements unless an exemption applies. Most private LLCs rely on Section 4(a)(2) of the Securities Act or Rule 506(b) under Regulation D, which allow sales to a limited number of sophisticated or accredited investors without registration.10U.S. Securities and Exchange Commission (SEC.gov). Frequently Asked Questions About Exempt Offerings
Even exempt offerings are subject to federal anti-fraud rules, so you can’t make false or misleading statements to bring someone in. Virginia has its own securities laws, though 506(b) and 506(c) offerings are generally exempt from state registration. If the new member is putting significant money in for their interest, talk to a securities attorney before you sign anything.
After the Admission
Notify the LLC’s bank and update account signatories if the new member will have financial authority. Check any professional licenses or permits tied to the ownership structure to see whether they need updating.
Virginia LLCs owe a $50 annual registration fee to the SCC, due on the last day of the month the LLC was originally formed.11State Corporation Commission. Annual Registration Fees Adding a member doesn’t change the amount or the deadline, but the new member should know about it. If your LLC issues membership certificates, prepare one for the new member. Keep the amended operating agreement, the consent resolution, and documentation of the new member’s contribution together in the LLC’s permanent records.