LLC Membership and Ownership Changes Upon Death
When an LLC member dies, the LLC will continue operating if members remain. The deceased’s representative must file documents to change LLC membership records. Ideally, the company’s documents include language to deal with an owner’s death. Provisions may include surviving members buying shares from heirs, heirs inheriting financial but not management interests, or the LLC dissolving with ownership percentage distributing to heirs.
Handling LLC Operations After Death in Texas
In Texas, an LLC member’s death does not always result in dissolution. Unless specified otherwise in the documents, one’s LLC interest is assignable, so assignment does not require winding up. To dissolve an LLC in Texas, submit the Certificate of Termination to the Secretary of State. If the operating agreement allows continuation after a member’s death, new members can be admitted upon the vote of remaining members. The outcome may vary based on the deceased’s role within the LLC.
Overview of LLCs and Post-Death Procedures
LLCs offer liability protection and flexible taxation. For sole owners, LLCs allow reporting business profits/losses on personal tax returns. LLCs require less paperwork than corporations but still necessitate filing annual reports and fees to the state. The deceased owner’s estate typically becomes the new business owner, but surviving owners could also buy out the deceased’s ownership or bring in a new owner.