Adding a Partner Changes More Than the Ownership Percentage
Address classification, contributions, economics, and tax administration before closing.
TOPIC COLLECTION
New owners
A focused reading path from Entity Economics. Start with the question closest to your situation, then review the linked sources and documentation steps.
A Single-Member LLC Adds a Second Owner: Trace Who Receives the Money
Distinguish a new capital contribution from a purchase of the founder’s existing interest.
Buying a Partnership Interest: Ask About Section 754 Before Closing
A buyer’s diligence file should distinguish purchase price, outside basis, and adjustments to partnership property.
Unequal Capital Contributions: Decide Whether the Extra Funding Buys Equity or Creates Debt
Do not let the bookkeeper invent ownership economics after one partner pays more.
Giving a New Partner a Profits Interest: Define What the Award Actually Entitles Them To
Distinguish future upside from existing capital and coordinate valuation, vesting, and reporting.
A U.S. Partnership Admits a Foreign Investor: Budget Withholding Before Distributions
Review partner documentation, effectively connected income, payments, and reporting during admission.