How to Transfer Assets to an LLC

By Cindy DeRuyter, J.D.

How to Transfer Assets to an LLC

By Cindy DeRuyter, J.D.

When forming a limited liability company (LLC), members (owners) contribute capital to the new company. Whether that capital is in the form of cash, investable securities, real estate, or tangible personal property, it needs to be transferred into the name of the business. The process of transferring assets into an LLC differs depending on the type of asset.

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Transferring Real Estate to an LLC

Transferring deeded real estate to an LLC can be done with a quit claim deed or a warranty deed that meets the legal formalities of the state where the property is located. The deed should indicate that the LLC is the "grantee" or "transferee."

If the property you want to transfer to the business is mortgaged, check with your mortgage lender before taking action so you don't inadvertently trigger a pay-in-full clause for the loan. It is also a good idea to verify that a transfer to the LLC will not have negative implications for title insurance or property insurance policies.

Because of the complexities involved in transferring real estate, you may wish to work with a licensed real estate or business law attorney in your state.

Opening a Bank Account in the Name of an LLC

If you and the other LLC members contribute cash to the business, you will need one or more bank accounts to hold those funds.

The bank, credit union, or other financial institution will need documentation that may include proof of registration with the state, a members' resolution identifying which LLC members have authority to handle banking and financial transactions, and the LLC's employer identification number (EIN).

Retitling Securities into an LLC

Capital contributions may also take the form of marketable stocks, bonds, or other investable securities. When transferring securities into an LLC, contact an investment professional or the security's transfer agent to find out what is required.

Similar to the requirements for opening a bank account in the name of the LLC, retitling securities may involve providing proof of the business' existence and documenting who should have signatory and transaction authority over investments.

Transferring Tangible Personal Property to an LLC

When transferring or selling vehicles, computer equipment, or other tangible personal property to an LLC, a bill of sale can be used to document the transaction.

For assets with a separate certificate of title, such as a vehicle, the LLC will need to re-title the property in the name of the business. Check with the agency that issued the title to determine what the specific process includes and what fees are involved. As with real estate transfers, if there is a lien against a vehicle you want to transfer to an LLC, check with your lender first. You should also reach out to your property insurance company to transfer ownership of insurance policies on transferred assets.

Documenting Contributed Capital in Operating Agreement

Any transfers of assets to the LLC should be memorialized in the business' operating agreement. As additional capital is contributed over time, the operating agreement should be amended to reflect each member's ownership stake in the company.

Transferring assets to an LLC is a straightforward process. You simply need to identify the type of asset (real estate, cash, securities, or personal property) and file the proper paperwork. Opening a bank account in the LLC's name gives you a place to hold contributed capital.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.