Withdrawal from LLC

Withdrawal from LLC

I formed a LLC with other two individuals about a month ago. Now I decided to withdraw from the LLC. The other two individuals will remain as members in the LLC and continue to operate the business. What steps should I take to formally withdraw from the LLC? I used my SS# on the SS-4 form when the LLC applied for the federal employer identification number. How would I switch it to one of the remaining member's ID#?


If you signed an operating agreement, you must follow the terms of the agreement. Whether or not there was an operating agreement have a lawyer review your state's LLC statute with you for the steps required to withdraw from the LLC. Are you selling your membership interests to the other members? If so, you can sign a "Sale of Membership Interests" contract and set forth the terms. Even if they pay you $10 as nominal consideration that may be a good way to formally wrap things up and clarify what, if anything, you have responsibility or liability for. As part of this final agreement you should clarify what income or loss will be reported by the LLC (assuming it is taxed as a partnership) to you for the period of time you owned the entity. You'll need a business/corporate attorney to help on this agreement. Also, check with your accountant as to how the tax return for the LLC should be handled for the "stub" period you were involved. Perhaps an "interim closing of the books" for the time of your ownership can be completed. You wouldn't want income earned after you left to be allocated back to your tax return (especially if you don't get the cash or benefit). The LLC income tax return should indicate the date of your withdrawal.

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