Good morning. I’ve searched the Forum for an answer to this question and haven’t found anything that seems to match my situation. My father owned mineral interests in multiple Texas counties along with other interests in CO, MS and OK. As part of his estate planning, he formed a single member Texas LLC and conveyed all of his interests into that LLC. He owned the 100% membership interest in the LLC and was the sole member. His will left the membership interest to me and I am the executor of his estate. Probate is complete at this point. With the assistance of my probate attorney, I have filed a Change of Registered Agent with the Texas SOS, executed an Executor’s Assignment of Membership Interest in the LLC to myself individually as the Assignee of the membership interest, and I have completed (as Executor) an Approval Of and Acceptance By New Member of myself individually as the new sole member of the LLC. Basically, I now own 100% membership interest in the LLC and am also the sole member. I have also filed a Public Information Report with the Texas Comptroller’s office to update pertinent information for the LLC.
Now I am working with purchasers to request updates to their records to reflect what I have outlined above. I have provided them with all of the documents referenced, along with a new executed W-9 that reflects my mailing address and SSN. Some have given me no trouble and made the requested changes. Others have insisted on further documentation which I have provided.
Lots of background information, but here is my primary question. Some of the purchasers are insisting that I need to file something with the county clerk in the relevant county. In most of these cases, they seem to think that the mineral interests are being “transferred” to me which is not the case. The LLC still owns the mineral interests and nothing has changed in title. The only pertinent item that would change from the Mineral and Royalty Conveyance that my father filed is the address for the sole member of the LLC. The most recent purchaser push back wants me to file the Executor’s Assignment of Membership with the county in question to “protect my title chain”. My father did not believe that anything would need to be filed in the individual counties. Given what I’ve outlined, I’m interested in the experience of others in this group. Should I be filing in the counties? If so, what would I be filing?
Thanks in advance for any feedback on what others have encountered related to this situation. I appreciate any help I can get.
I did and I would if I were you, If you know what you own and where. There are a lot of inexperienced lease brokers and landmen. It’s not that much trouble or cost to protect your interest. Also you may get leased quicker, easier for the landmen and it identifies you and how to contact you. Different States have different requirements and procedures. OH, and by the way “don’t sell you mineral’s”! You are in the drivers seat!
There is no obligation to file anything in those counties.
Let me use an analogy. If a shareholder of Devon, Chesapeake, or XTO sells shares, no filing is necessary to show a change of ownership of the company. Even when there is large bundle of shares in a company sold, no filing is necessary.
The ownership of the interests have not changed, only the ownership of the LLC.
Now, you may want to update your information as to address and contact info of the LLC, but if it comes to a post office box, for example, there is no need for the update.
Thanks Tim. This is what I think as well. Now I’m trying to figure out whether I just send a letter and a copy of the filed Change in Registered Agent form to each county clerk or is there something formal I need to file to make the address change. Any knowledge on that question?
To file something in the county clerk’s records, it has to be a document that is capable of being filed. A letter, typically, doesn’t have an acknowledgment. That is the notary statement down at the bottom of a deed or a lease.
I would suggest just a notice of change of address signed by you as Manager of the LLC showing the new address. (not a change of registered agent.)
If you file anything more than that, you will just invite more questions and delay.
In Oklahoma and Colorado, the notices will need legal descriptions of sections, townships and ranges attached as an exhibit or on the affidavit.
Not sure about Mississippi.
In Texas, since they use grantor/grantee index, a county wide notice should be sufficient (I think).
Susan, I have had a few issues similar to this related to transfers into a Trust. Your first issue is you have a change in the TAX ID. This triggers a change of ownership in the property in the Purchasers system even though the name of the LLC has not changed. For tax purposes you might look at this as a transfer between related entities which would have different TAX ID’s which would require filing transfer documents in each county. This is the conundrum of the single owner LLC that uses their SS# for tax purposes rather than a separate EIN for tax purposes. Although the LLC Operating Agreement may have had provisions for transfer of ownership, it most likely did not consider the EIN issue that has most likely created your problem. Consult your attorney that prepared the transfer of ownership on this point to see if they can find supporting case law potentially resolving this conflict. Thank you for bringing this issue to the forum since it will cause others to consider their own entity/estate issues.
What did the company agreement provide regarding the continuance of the company on the death of the single owner. Many require affirmative action on the part of the executor or the beneficiary to continue the existence of the entity. Possibly , you need some type of document stating that the election to continue the entity was made. Also, the LLC needs a new tax identification number. Possibly, an EIN rather than your SSN would solve the problem.