How to Change Ownership of a California LLC

By Salvatore Jackson

The ownership of an LLC may change either through the outright sale of the company, or through the addition or withdrawal of its owners, also called members. While California law provides default voting procedures for ownership changes in an LLC, the operating agreement or articles of organization may provide voting procedures that override California law. Changes in the ownership of an LLC must be reported to the California State Board of Equalization.

Step 1

Determine if the LLC’s operating agreement or articles of organization provide a procedure for changes in the LLC's ownership. The LLC’s articles of organization and operating agreement typically contain voting provisions for adding and withdrawing members, including when to conduct a vote and the percentage of votes required to add a member.

Step 2

Conduct a vote among LLC members if adding a member. If there are no provisions pertaining to adding a member in the operating agreement or articles of organization, California law supplies a default procedure which requires approval by a majority of current LLC members in order to add a new member.

Ready to start your LLC? Start an LLC Online Now

Step 3

Arrange to have the withdrawing member submit written notice to the other LLC members. Under the default provisions supplied by California law, the members of an LLC may not vote to remove other members.

Step 4

Download and fill out Form 100B (see Resources). Indicate whether the change in ownership has resulted in more than 50 percent ownership by a new business or person, and whether any California real property interests have been excluded from filing. Complete Schedule A if a legal entity or person has acquired a controlling stake in the LLC. Complete Schedule B if any property has been excluded from filing. Provide your name and address in the Certification section, and sign the form. The filing address is California Board of Equalization County-Assessed Properties Division, P.O. Box 942879, Sacramento, CA 94279-0064.

Step 5

Amend your articles of organization or operating agreement, if necessary. You must amend your LLC’s articles of organization or operating agreement if either provides a list of all LLC owners. Because the California Secretary of State does not require an LLC to file an operating agreement, amending an operating agreement simply requires changing the list of owners, having all owners sign the new operating agreement and keeping a copy of the new operating agreement on file at the LLC's registered office. If amending the articles of organization, you must use the California Secretary of State’s Certificate of Amendment form (see Resources), where you provide the new list of LLC members under Section 1C. As of 2010, the filing fee for a Certificate of Amendment is $30. The filing address is Secretary of State, Document Filing Support Unit, P.O. Box 944228, Sacramento, CA 94244-2280.

Ready to start your LLC? Start an LLC Online Now
How to Add Owners to a Texas LLC



Related articles

How to Convert a California Limited Liability Company to a Corporation

California law regulates the creation and maintenance of business associations registered in the state. To conduct extensive business within California, a business must be registered with the California secretary of state. If you are the owner of a California limited liability company, or LLC, and you find that your business is growing or can attract outside investment, you may find it desirable to run your business as a California corporation. This requires filing an articles of incorporation with a statement of conversion with the secretary of state.

How to Amend and Restate a Certificate of Incorporation in Delaware

Many states now use the Internet to provide resources to business owners, making it easier for them to complete government filings. In Delaware, the Corporations Division of the Secretary of State's office provides corporations with instructions and a downloadable form that can be used to amend any provision in the certificate of incorporation other than the name and address of the registered agent. The certificate of amendment is attached as an addendum to the original filing. If a business wants to restate its certificate of incorporation so that it is a single document including all amendments and the most current version of each provision, it must refer to the state's corporation statute and draft the amended and restated articles from scratch.

How to Amend an LLC Filing

As your limited liability company grows and changes over time, you may determine that you need to amend your filings. Amendment may also be required if you discover that you made a mistake on your original filing. Generally, you only need to file an amendment when making significant changes to the LLC and altering the articles of incorporation. Following the correct steps for amendment will ensure that the state is updated with accurate information about your company.

LLCs, Corporations, Patents, Attorney Help

Related articles

How do I Remove LLC Board Members?

A limited liability company, or LLC, is a form of business organization that provides the benefits of pass-through ...

How do I Convert an S Corporation to an LLC in Delaware?

Delaware law provides a specific process for converting a Delaware S-corporation to a Delaware limited liability ...

How to Change the Address on a Texas PLLC Incorporation

A professional limited liability company in Texas is a limited liability company that engages in a professional ...

How to a Convert Sole Proprietorship to an LLC in Illinois

As the owner of a sole proprietorship, you may at some point find it necessary to convert your business to a limited ...

Browse by category
Ready to Begin? GET STARTED