Founding Attorney
Many of our clients here in Minnesota are solo business owners. Forming a limited liability company (LLC) is relatively easy—you file Articles of Organization, pay a fee, and you’re in business. But far fewer people know what happens to that business when the sole member passes away. Who takes over? Does the business keep running? And what steps need to be taken to make sure everything is handled correctly?
Let’s walk through how to transfer ownership of a single-member LLC in Minnesota when the owner dies, and how planning ahead can make a difficult time a little easier for those left behind.
What Happens to a Single-Member LLC When the Owner Dies?
If the sole member of an LLC passes away, the business doesn’t automatically shut down. An LLC is its own legal entity—it can continue after the owner’s death. However, someone still needs to have the legal authority to step in and manage or transfer the company.
That’s where things can get tricky. If there’s a clear plan in place—through an operating agreement or estate documents—the transition is usually smoother. Without that, the LLC interest becomes part of the deceased’s estate and may be tied up in probate.
We help clients sort through these questions and take steps to ensure that loved ones aren’t left dealing with avoidable confusion and delays.
Step 1: Check the LLC Operating Agreement
The first place to look is the LLC’s operating agreement. It might contain a clause that explains what happens to the business upon the owner’s death. Some agreements name a successor or allow the membership interest to pass to a specific person.
Unfortunately, many small business owners never create an operating agreement. If that’s the case, Minnesota law and probate rules step in to fill the gap. We strongly encourage you to get an agreement in place now. It can save your family time, money, and stress later by clearly stating who’s allowed to act on behalf of the business.
Step 2: Determine the Heir or Beneficiary
If there’s no operating agreement or specific instruction, the LLC interest is part of the owner’s estate. That means the business can’t be touched until the probate court appoints a personal representative.
From there:
- If the deceased had a will, it controls who inherits the LLC.
- Without a will, Minnesota intestate succession laws apply.
The new owner must accept the interest and meet any conditions the LLC might require for membership. We help families and business partners sort through these requirements and make sure nothing is missed during this step.
Step 3: Obtain a Death Certificate
Before any transfer happens, a certified copy of the death certificate is needed. This document will be required by banks, the Secretary of State, and other agencies involved in the process. We always recommend ordering multiple copies from the county registrar, as you’ll likely need to provide this certificate in more than one place.
Step 4: File a Certificate of Amendment
If the new owner is stepping into the role, they’ll need to update the LLC’s official registration with the Minnesota Secretary of State. This is done by filing a Certificate of Amendment, which updates the member or manager information on record.
This document should include:
- The name and address of the new member
- Any updated business information, if applicable
We assist clients with preparing and filing this form to ensure everything is accurate and meets state requirements.
Step 5: Update Business Records and Accounts
Once the transfer is official, the new owner should update all business-related accounts and documents. That includes:
- IRS records and tax ID (EIN) updates
- Bank accounts and financial institutions
- Vendor or lease agreements
- Internal business records and member logs
These updates help avoid disruptions and protect the business from legal or financial complications.
Helping You Transfer or Plan for LLC Ownership
Whether you’re dealing with a loved one’s estate or thinking ahead for your own business, we’re here to help. At Unique Estate Law, we work with Minnesota business owners and families to create clear plans—or guide them through transitions after a death. If you own a solo business, don’t leave things to chance. Contact us today to make sure your LLC is protected and your wishes are clear.