Partnership in a LLC

[Aric Zaky]

I live in the southern Maryland area and I am planning to purchase a property in Baltimore possibly with one other person. I currently have a LLC but the person who would pretty much be my partner is not a member. Would this person need to be a member of the LLC to purchase the property with me? What kind of paperwork would I expect to fill out if we are purchasing the property together?

[Ollie Bockwinkel]

@Aric Zaky I second what @Will Fraser said here. Also consider how the management duties will be split between you when you rearrange the LLC. You will need to draft an operating agreement since adding a member changes the LLC to a partnership for tax purposes, and determine if profits will be allocated on a basis other than capital invested. For example, if only one of you will be making management decisions, you may justifiably receive a greater share of the profits, even if the capital contributions are equal. You will apply for a federal EIN for this LLC and have to file an annual form 1065, partnership tax return.