Conduct a valid vote altering the ownership structure of your LLC. Under Arkansas LLC law, the terms of the LLC’s operating agreement govern the addition or removal of any member, or owner, of an LLC. If the LLC does not have an operating agreement, or the LLC’s operating agreement does not have any provisions regulating the addition or removal of a member, Arkansas LLC law provides default provisions that govern the addition or removal of a member. If a member is being added to the LLC, all members must approve. If a member is to be removed from the ownership structure of an LLC, that member must assign her ownership interest back to the LLC and have a majority of the remaining members approve of the removal. If your company has an operating agreement, reflect the change in ownership in the operating agreement after conducting the vote.
Determine whether the change in ownership of the LLC affects the management structure of the LLC. Under Arkansas law, a company does not need to report its owners to the Arkansas Secretary of State. However, a company must report the management structure of an LLC to the Arkansas Secretary of State. In the context of reporting requirements, management involves making day-to-day business decisions about the management of a company. Members, who are individuals with an ownership stake in the company, or managers, who do not have an ownership stake, may manage an Arkansas LLC. An Arkansas LLC must report its management structure to the Arkansas Secretary of State.
Indicate the change in ownership of a member-managed LLC in the annual Arkansas Franchise Tax Filing form. The Arkansas Secretary of State allows businesses to file their annual Franchise Tax Filing online or by mail. If filing online, you must use the Business and Commercial Services website (see Resources). If filing by mail, you must the Franchise Tax Filing form (see Resources). Provide the name and address of all managing members of your company. The annual filing fee is $150, as of 2010. If filing by mail, the address is Business and Commercial Services Division, P.O. Box 8014, Little Rock, Arkansas 72203-8014.