--- title: "How to Move an Existing LLC Into a Holding Company Structure | LLC Attorney" description: "How to restructure an existing LLC under a new parent holding company without re-titling assets, plus the due-on-sale and EIN steps most guides skip." canonical: https://llcattorney.com/small-business-blog/move-llc-into-holding-company image: https://llcattorney.com/images/share-cover.png source_path: /small-business-blog/move-llc-into-holding-company --- If you already have an operating LLC and you've decided you want a holding company sitting above it, the good news is you almost never need to dissolve the existing LLC and start over. In most cases, the existing LLC keeps its EIN, its contracts, its bank history, and — if it holds real estate — its title, exactly as they are. What changes is *who owns the membership interest* in that LLC: instead of you owning it directly, a new parent holding company owns it, and you own the holding company. ## The Standard Method: Assign the Membership Interest, Don't Move the Assets There are two ways to get an existing business under a holding company. You can transfer the LLC's underlying assets into a new entity, or you can transfer ownership of the LLC itself. Almost always, the second option is simpler and cheaper: 1. **Form the new holding company.** This is typically a new LLC (or, less often, a corporation) formed in the state that makes the most sense for your structure — often the same state as the existing LLC, though not always. See our [guide to holding companies that span multiple states](/small-business-blog/holding-company-llcs-multiple-states) if your entities won't all sit in the same state. 2. **Assign your membership interest in the existing LLC to the new holding company.** This is done through a written assignment of membership interest agreement, where you (the current member) transfer your interest to the holding company in exchange for membership interest in the holding company. The operating LLC's assets — its bank account, its property, its contracts — never change hands. Only the identity of its owner changes, from you individually to the holding company. 3. **Check the existing operating agreement first.** Many operating agreements restrict transfers of membership interest or require consent from other members before a transfer can happen. If you have co-owners, get that consent in writing before you assign anything. 4. **Update the LLC's internal records.** Reflect the new ownership in the member ledger/schedule of members, and have the operating LLC formally acknowledge the holding company as its new sole (or majority) member. 5. **Update the EIN's responsible party with the IRS.** If the "responsible party" on file for the operating LLC's EIN changes as a result of the restructuring, the IRS requires you to file [Form 8822-B](https://www.irs.gov/pub/irs-pdf/f8822b.pdf) within 60 days of the change. 6. **Check whether the state requires any filing.** Some states want an amendment or statement of change reflecting new ownership or a new registered agent; others don't track membership changes at all since LLC ownership generally isn't public record. Confirm with the secretary of state (or equivalent) where the LLC is formed. ## The Part That Gets Missed: Loan Documents and Due-on-Sale Clauses If the operating LLC has a mortgage or a business loan, this is the step to slow down on. There's a common misconception that because you're only reassigning membership interests — not transferring the deed — a mortgage lender has no say in the matter. That's not reliably true, and it's worth getting right. The federal law that limits when lenders can enforce a "due-on-sale" clause, the [Garn-St. Germain Depository Institutions Act](https://legalclarity.org/is-garn-st-germain-act-still-in-effect/) ([12 U.S.C. § 1701j-3](https://www.law.cornell.edu/uscode/text/12/1701j-3)), lists specific exempt transfers — like moving a property into a revocable living trust where the borrower remains a beneficiary. Transferring a property (or an entity that owns a property) into an LLC is not on that exempt list. That means a due-on-sale clause can potentially be triggered any time ownership of mortgaged real property changes hands, whether that happens by deed or, in many loan agreements, by a defined "change of control" of the entity that holds title. Commercial and investment-property loan documents frequently define a triggering "transfer" broadly enough to include a change in who controls the borrowing entity, not just a change in who's on the deed. Reassigning your membership interest to a new holding company can qualify as exactly that kind of change of control, even though the LLC that holds title never changes and the deed is never re-recorded. Before you execute the assignment, pull the loan documents and confirm whether: - The note or deed of trust defines "transfer" to include a change in ownership or control of the borrowing entity. - The Garn-St. Germain exemptions even apply to your loan in the first place — they're limited to loans secured by residential property with fewer than five dwelling units; commercial and larger multifamily loans aren't covered at all. - Your lender requires advance written consent for this kind of restructuring, and whether that consent can be obtained without re-underwriting or re-pricing the loan. When in doubt, ask the lender directly, in writing, before you restructure. It costs you a phone call and possibly a short delay; skipping it risks an accelerated loan balance you weren't expecting. ## Tax Treatment of the Restructuring For a straightforward restructuring where a single owner contributes their existing single-member LLC interest into a new, wholly-owned single-member holding LLC, the transaction is typically a nonevent for federal income tax purposes. Both LLCs are disregarded entities before and after the restructuring, so the IRS still looks straight through to you as the owner of everything underneath — no gain is recognized simply by adding a disregarded layer. The analysis gets more involved if multiple owners or entities are involved — for example, contributing a multi-member LLC's interests into a new holding partnership, or restructuring a business that's elected to be taxed as an S-corp or C-corp. Those transactions implicate different sections of the tax code entirely, and can have real tax consequences if structured incorrectly. This is not a do-it-yourself step once more than one owner or a corporate tax election is involved — get a CPA or tax attorney to confirm the restructuring qualifies for tax-free treatment before you sign anything. ## After the Restructuring: Cleanup Items - Draft (or update) the holding company's own operating agreement to reflect that it holds the operating LLC as a subsidiary — see our [guide to parent-subsidiary operating agreement language](/small-business-blog/holding-company-operating-agreement-language) for what that should include. - Confirm the operating LLC has its own EIN and bank account separate from the holding company's — see our [holding company EIN and bank account guide](/small-business-blog/holding-company-ein-bank-account). - Notify insurers, and confirm liability and property policies still name the correct insured entity after the ownership change. - Review any material contracts, leases, or vendor agreements for anti-assignment or change-of-control clauses that the restructuring might trip. Restructuring an Existing LLC?We'll help you form the holding company and get the paperwork right. Free BOI/CTA filing for all clients.[Start My Business](https://app.llcattorney.com/formation?intake_type=formation) ## FAQs: Moving an LLC Into a Holding Company ### Do I need to dissolve my existing LLC to put it under a holding company? No. The standard approach keeps the existing LLC intact — its EIN, contracts, and title stay the same — and simply reassigns ownership of its membership interest to the new holding company. ### Will restructuring trigger my mortgage's due-on-sale clause? It can, depending on how the loan documents define a triggering transfer. Transfers to an LLC aren't covered by the Garn-St. Germain Act's residential due-on-sale exemptions, and some commercial loan documents treat a change in control of the owning entity the same as a deed transfer. Review the loan documents, or ask the lender, before restructuring. ### Does the IRS need to be notified when I restructure? If the "responsible party" associated with the LLC's EIN changes, yes — file Form 8822-B within 60 days. Whether the restructuring itself is a taxable event depends on how many owners and entities are involved; a CPA should confirm before you sign the assignment. Ready to Launch Your Dream Business?Follow our fast, easy process to get started right now.[Start My Business](https://app.llcattorney.com/formation?intake_type=formation) [Back to blog](/small-business-blog) AUTHOR [ LLC Attorney Team ](/) Welcome to LLC Attorney, where our mission is to make the process of forming and maintaining your LLC as smooth and stress-free as possible. Our team is a dedicated group of professionals with a shared passion for helping businesses thrive. ![LLC Attorney Team](/_next/image?url=%2F_next%2Fstatic%2Fmedia%2FLLC-author.e5f49367.png&w=384&q=75)