LLC help!

[Lauren A.]

Hello BP- I formed my LLC a few years back as a multi member... however, I am married to the other member (no other members besides us) and think it would make more sense to transition to a single member LLC, since I live in a community property state (CA). How do I accomplish this? Any feedback would be very useful!

[Naseer Khan]

@Lauren A. If the transfer of ownership results in a change in controlling ownership (i.e. transferring more than 50% interest to someone) AND the entity owned California Real Property, then you must file BOE-100-B, Statement of Change in Control and Ownership of Legal Entities. 

Change in Control—R&TC 64(c)—"A change in control occurs when any person or legal entity obtains more than 50 percent of the ownership interest in a legal entity..." Link to form: https://www.boe.ca.gov/proptaxes/pdf/boe100b.pdf

If the LLC did not own any real property, then you can change the ownership by amending your statement of information (form LLC-12) with the Secretary of State. Generally this form is filed with the SOS every 2 years but you can amend sooner if there is a change.

Also, be careful of any tax consequences that your husband may incur if the LLC interest that he is transferring is worth anything.

This response neither constitutes legal or tax advice nor establishes an attorney-client relationship. Inquirers must seek the advice of their own legal counsel prior to undertaking any course of action related to this inquiry.