How to Transfer LLC Ownership in New York: Step-by-Step Guide for 2025

Transferring ownership of an LLC in New York can feel a bit overwhelming if you haven’t done it before, but it doesn’t have to be complicated. It’s important to understand the steps and follow the state’s rules carefully. In the Empire State, this typically involves updating your operating agreement, filing the correct paperwork with the state and making sure everyone involved is on the same page. It’s essential to have a clear plan, and guess what? The process doesn’t have to be stressful; it can even set your business up for a stronger future.

With that being said, let’s take a look at how to transfer LLC ownership in New York, so you can set your business up for a smooth transition. Let’s go!

How to Transfer LLC Ownership in New York: A Step-by-Step Guide

1. Review Your LLC’s Operating Agreement

The first step in transferring LLC ownership in New York is reviewing your operating agreement. This is a document that usually explains how ownership interests can be sold, assigned or passed on. Many agreements include buy-sell provisions that set the rules for situations like retirement, selling a stake or the death of a member. If your agreement allows transfers, it may also outline approval requirements, valuation methods and restrictions on who can become a new member. If your operating agreement is outdated or silent on ownership transfers, New York’s default LLC laws will apply instead, which often require majority or unanimous member approval.

2. Get Member Approval for the Transfer

LLC ownership changes usually require the approval of other members before moving forward. The exact approval threshold depends on what’s written in the operating agreement, but if the agreement doesn’t specify, state law may require unanimous consent. Member approval helps protect the business from unwanted third-party involvement and makes sure everyone is aligned. A formal meeting is often the best way to document this decision, with written resolutions signed by members for the company’s records.

3. Draft and Sign a Transfer Agreement

Once approval is secured, the next step is drafting a transfer agreement. This is a legal document that details the terms of the ownership transfer, including the percentage being transferred, purchase price, payment method and effective date. Having a well-written transfer agreement protects both the seller and the buyer by creating a clear record of the transaction. It’s wise to work with an attorney to make sure the document complies with state law and doesn’t create unintended liabilities. Once finalized, all parties should sign the agreement, and the LLC should keep a copy with its official records.

4. Update LLC Records and State Filings

After the transfer agreement is signed, the LLC must update its internal records and notify the New York Department of State if membership or management information has changed. New York does not always require immediate state filing for ownership changes, updates must appear in the LLC’s biennial statement and may also be needed if the transfer alters the registered agent or management structure. Internally, membership ledgers and the operating agreement should be revised to reflect the new ownership.

Can You Transfer an LLC in New York?

Yes, you can legally transfer an LLC in New York, but it requires compliance with state laws and the LLC’s operating agreement.¹ Member approval is often required, especially if the agreement contains buy-sell provisions or restrictions on who can own membership interests.² The transfer must be documented through a membership interest transfer agreement, detailing the parties, terms and effective date of the ownership change.³

Once the agreement is executed, filing the Certificate of Amendment with the New York Department of State updates the official records.⁴ The LLC should update internal records, notify the IRS and state tax authorities, and inform any relevant third parties, such as banks or vendors.⁵ It’s absolutely imperative to follow this process to make sure the transfer is legally valid and protects both outgoing and incoming members from future disputes.

Filing the LLC Change of Ownership Form in New York

To formalize a change of ownership in a New York LLC, filing the Certificate of Amendment with the Department of State is required.¹ This is a form that officially updates the public record to reflect the new ownership structure and must include accurate member names, addresses and the effective transfer date.²

Filing can be done online, by mail or in person with a $60 fee for processing.³ It’s also critical to make sure any operating agreement provisions regarding approval or transfer restrictions are followed before filing.⁴ Accurate completion avoids delays, errors or disputes regarding ownership rights.

Not to mention, owners should update internal company records and notify tax authorities and third parties, such as banks, to reflect the new ownership.⁵ This is what we call the most important step, as it’s crucial to make the transfer of LLC ownership in New York legally recognized and operationally smooth.

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Updating Your NY LLC Address and Certificate of Change

If the LLC’s address changes as part of the transfer, filing a Certificate of Change is required with the New York Department of State.¹ The form updates the LLC’s official address, so legal notices and communications reach the right location.² The filing fee is $30, and submission can be done online, by mail or in person, though online is the easiest.³

It’s important to keep this information current, not only for compliance, but also for maintaining accurate public records.⁴ Updating the address is required so banks, vendors and tax authorities have the correct information.

On top of that, any changes should be reflected in internal records and operating agreements as needed.⁵ Proper documentation of address updates during the transfer of LLC ownership in New York helps prevent administrative errors as well as helps maintain a good relationship with the state.

Open a Wise Business Account: Manage Your US Business Finances With Ease

Once you have established your business with an LLC, you’ll need a business account to manage your US finances. A Wise Business account is easy to open online and comes with no monthly fees. You can convert funds from your home currency to USD with low, transparent fees.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to countries.

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Final Thoughts

Transferring ownership of an LLC in New York doesn’t have to be complicated, but it does require attention to detail. It’s important to follow the above procedures so that the transfer is legally recognized, while protecting both outgoing and incoming members. Trust us when we say it may seem like a complicated process, but with the help of this guide, it should be straightforward to transfer your LLC in the Empire State.

FAQs

Can you gift ownership of an LLC?

Yes, ownership of an LLC can be gifted to another individual or entity in New York.¹ The gift must comply with the LLC’s operating agreement, which may require member approval or impose restrictions.² The transfer should be documented with a membership interest transfer agreement specifying the terms of the gift and the effective date.³ After executing the agreement, file the Certificate of Amendment with the New York Department of State to make the change official.⁴

Can I transfer LLC ownership if there are multiple members?

Yes, transferring ownership in a multi-member LLC in New York is possible, but it requires extra coordination. All members should review the operating agreement to see if unanimous or majority approval is needed for ownership changes.¹ Each member transferring their interest must document the transaction clearly, usually with a membership interest transfer agreement.² After agreements are signed, the LLC should update internal records and notify the New York Department of State if ownership percentages change or new members are added.³⁵

What happens if I forget to file the required forms?

Failing to file necessary documents like the Certificate of Amendment can create legal and operational problems.¹ The state won’t officially recognize the new ownership, which can affect your ability to make decisions, open bank accounts or sign contracts.² On top of that, unfiled changes may create confusion with the IRS or state tax authorities, leading to penalties or complications in reporting profits.³ To avoid issues, always make sure all transfers are documented and filed promptly.⁴

Can I transfer ownership of an LLC to a minor or trust?

Yes, you can transfer ownership to a trust or, in some cases, to a minor in New York, but additional steps may apply.¹ For minors, a guardian typically manages the ownership until the child reaches legal age.² For trusts, the trustee becomes the legal owner on behalf of the trust.³ In both scenarios, it’s critical to update the operating agreement and file the Certificate of Amendment with the Department of State to reflect the new ownership.⁴ Legal and tax guidance is strongly recommended to navigate potential complications and protect the interests of all parties involved.⁵

Can an LLC member transfer only part of their ownership?

Yes, partial transfers of LLC ownership are allowed, but they must comply with the LLC’s operating agreement.¹ The member must clearly document how much interest is being transferred and to whom, typically through a membership interest transfer agreement.² The remaining ownership percentages should be updated in internal records, and the state may require a filing if the ownership structure changes significantly.³ Partial transfers can affect voting rights, profit distribution and management responsibilities, so all members should be informed and approve the transaction if required.⁴

Sources:

1. How to Transfer Ownership of an LLC | LegalZoom
2. Selling a Business | NYC Bar
3. LLC Transfer of Ownership | UpCounsel
4. Transfer LLC Ownership New York | ZenBusiness
5. Transfer of LLC Ownership in New York | Love Law Firm