Single-Member vs. Multi-Member LLCs

Your first step in establishing a limited liability company (LLC) is determining how many members are involved in the business.

Your first step in establishing a limited liability company (LLC) is determining how many members are involved in the business:

Single member LLCs don’t have to draft a partnership agreement.

However, you are still responsible for filing your operating agreement, which details how your business will operate on a daily basis.

If you are a multi-member LLC, you must draft a partnership agreement.

In your multi-member LLC partnership agreement, you and your partners establish your professional relationship.

Earnings, liability, and management responsibilities are divided and listed, and each member can voice concerns, propose inclusions, and deny clauses.

In effect, the partnership agreement is a method of partnership negotiation.

Do I need a lawyer to change membership structure?

Changing your membership from a single member LLC to a multi-member LLC requires a decent amount of additional paperwork.

First, you must establish a partnership agreement between yourself and your additional members.

Then, you must revise your operating agreement to reflect the change in membership structure.

Your multi-member partnership agreement is not a state or federal requirement.

This document outlines the relationship between members, and acts as a tool to (1) limit individual member liability, (2) establish the extent of interest per member, and (3) protect the individual interests of each member.

You may include the multi-member partnership agreement in your operating agreement, or draft an entirely separate document.

Your multi-member partnership agreement offers you protection by securing your percentage of the business and determining your liability.

Therefore, this document may offer you additional protection in the event of a lawsuit or partnership dispute.

How will a lawyer help me with this process?

Hiring a lawyer to draft or review your multi-member partnership agreement is beneficial, because you should seek to protect all of your assets.

This includes establishing a strong professional agreement between yourself and your fellow members.

Legal consult ensures that each partner is receiving a fair share, allowing each member to have a say in how the partnership operates.

Including a lawyer in the drafting phase of your agreement provides legal insight to ensure there are no weaknesses in your partnership agreement.

In addition, hiring a lawyer to draft your agreement from the beginning of the partnership provides a non-partisan draft of your agreement.

A lawyer’s expertise would benefit your business in terms of establishing your tax status, determining your personal liability, and negotiating your percentage of interest in the business. 

Consult with an expert prior to making any changes to your business structure or operation.


Transitioning your business to a single member or multi-member LLC is an important change. Therefore, properly transitioning your structure is essential to the success of your business.

For this reason, it’s highly recommended that you schedule a consultation with a business law attorney in order to discuss your LLC membership options.

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