I just formed a LLC in Texas and what to change the ownership. Do I need to let the state know and how?

Asked almost 4 years ago - Mckinney, TX

I initially thought it would be wise to form the LLC using another company I owned. I have not realized that I would prefer to not have the two businesses linked and I would rather change the ownership from the C corp to myself. I beleive that I can use the newly formed LLC's Operational Agreement for the ownership change but how do I let the State know that the C corp is no longer one of the members of the LLC?

Attorney answers (3)

  1. Teri A. Walter

    Contributor Level 19

    Answered . Neither he owners of LLCs nor corporations are registered with the state. The state has to be kept notified of the Registered Agent for the company, and you have to file an annual report showing officers/ directors/ managers.

  2. Christopher William Peterson

    Contributor Level 14

    Answered . In Texas, we don't disclose the members of LLCs unless the members are also serving as managers. Look back at your certificate of formation to see what was disclosed to the State. If you disclosed managers and the corporation was not listed, you don't need to do anything. If you did disclose the managers but the Corporation is not the registered agent, you can just wait until next year's Public Information Report (filed with your Texas Franchise Tax report) and list the new managers at that time. If the corporation is listed as the registered agent, you need to file a change of registered agent form with the Secretary of State.

  3. Charles Alexander Naegele

    Contributor Level 14

    Answered . I agree with the prior attorney. Most states only require that you list whether or not the LLC is member managed or manager managed, and sometimes requires the name of the manager. However, the individual member names of the LLC do not need to be filed with the Secretary of State. Note, however, that you should complete the transfer in accordance with what is written in your Operating Agreement and list the transfer as a sale to the C Corporation on its corporate tax return when filing with the IRS.

    No, under the facts of your case, they should not be able to withhold your paycheck funds because the employment agreement is between you and the LLC, not between you and the LLC owner. Therefore, any action by an owner of an LLC to withhold money on a personal debt from funds that belong to the LLC is unlawful. Moreover, the employment contract with the LLC has nothing to do with the personal contract between you and the owner. Finally, based on the facts above, you never received the 25% interest which means the contract in which you personally guaranteed to pay 100% of the debt is not valid since the other party did not perform their side of the bargain. You should retain an experienced corporate/contracts lawyer to review your case and take action against the LLC owner to rectify the situation immediately.

    By forming a second company inside your existing LLC, you will have to form another company or LLC, and then give all of the shares or membership interest to the existing LLC. So basically one LLC owns the other LLC or Corporation. This will offer you the same protection the existing LLC has.

    If you have two lines of business and you want to make sure both of them are protected, you can put both of them into the current LLC and then can operate as two separate lines of business and both each maintain the same level of protection inside only one LLC. The fact that there are two "companies" or two lines of business doesn't matter -- they are protected equally inside one LLC.

    Legal disclaimer: The above information is not legal advice and should not be relied upon as legal advice. No representations are made in the above communication nor may any information contained herein be used in a court of law as a representation upon which you may rely.

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