Changing from a Single member LLC to a Multi Member LLC *****

[Eddie Symmonett]

Hello Bp,

So I just spoke to my attorney in regards to changing my SMLLC to a MMLLC for added limited liability protection and to have my business tax return separate from my personal tax return

However I have some pertinent questions that need to be answered before I can make this change.

1) Can I add 'ghost' members to the LLC ? I wanted to add family members or just a 'made up cousin' to change to a MMLLC. I was told once there is a name, address, and ownership percentage I can add a member. Will the business get in legal trouble/IRS trouble if the other members are not filing the Schedule K-1 forms come tax time?

2) Is there a minimum of ownership percentage ? I was just going to give these 'members' 1% ownership is that okay or would it raise a red flag to governing bodies who look into situations like this.

Has anyone had any similar problems and found a way to resolve it without legal problems? I would hate to be audited because of this. Thank you!