Adding Member

by Chirag
(Monmouth Jn, NJ)

I started my LLC in 2008, and I got an EIN for single-member. Now I need to add my dad to the LLC. So, I am going to get a new EIN.

Do I need to file form 8832 to notify them of the change from proprietorship classification to partnership-classification.

Since, partnership-classification is the default for multi-member do I need to file this form, or is getting a new EIN sufficient.

Answer

You don't need a new EIN when you add members to an LLC (unless you never got an EIN for your LLC and were simply using your personal Social Security Number).

You will have to change your tax classification (using Form 8832 as you mention in your question) from single member disregarded entity to a multi-member LLC (partnership taxation).

From now on, you'll be filing 1065 partnership returns, and giving each member (yourself and your dad) a K-1 from the 1065 stating your share of profits or losses to report on your own 1040.

When you add a new member to your LLC, be sure to document this in writing.