How to Change ownership percentage in an LLC

[Joe S.]

My oldest son recently opened an LLC in order to start investing. He hasn't done any business with the LLC as of yet. He is wanting me to help him with his business and give me a percentage of his business now after the fact that he's opened it. Of course, I originally told him that I could help coach him and it would be his business 💯%, but he feels better if I own a portion of it and would be a little more active with helping him getting it up and running…
Would it be simpler just to open a new LLC and close down the first one?  He hasn’t even opened up a checking account yet.  

[Natalie Kolodij]

Quote from @Ben Fernandez:

@Natalie Kolodij Thanks. I'm aware of the state and federal applications. But I appreciate you explaining them.

So, are you assuming his son never set up an EIN, as to why you're saying a new EIN isn't necessary? 

If so I can see your point, being that this would be the initial filing.

However, I still want to confirm your statement about whether you think a new EIN is required if the EIN was already set up as single member and is now being altered to multi member.

No- even if the son has an LLC with an EIN he does not need a new one.

If travel regulations say you need a passport to fly to Spain. 

But previously you'd flown to Japan. It doesn't mean you need a new passport to go to Spain. 

You've already done something which caused you to obtain the thing needed to go to Spain. 

If you need an EIN to file a LLC on form 1065; and you already have an LLC with an EIN; you've met the requirement.



Any LLC with an EIN retains that EIN if its classification changes under the entity classification regulations. Treas. Reg. §301.6109-1(h)(1).

If an LLC treated as a disregarded entity is later recognized as a separate entity for federal tax purposes and it has an existing EIN, it continues to use that EIN. If the LLC does not have an EIN, it must acquire an EIN and not use the owner's TIN. See Treas. Reg. §301.6109-1(h)(2)(ii).

Here's that Code Section: 

"(ii) When an entity that was disregarded as an entity separate from its owner becomes recognized as a separate entity. If a single owner entity's classification changes so that it is recognized as a separate entity for federal tax purposes, and that entity had an EIN, then the entity must use that EIN and not the TIN of the single owner. If the entity did not already have its own EIN, then the entity must acquire an EIN and not use the TIN of the single owner."