Full question:
LLC has repurchased outstanding units from two members. LLC desires to reissue to a foreign investor who also will contribute additional funds to the LLC. What type of document is best suited for recognizing this transaction and what should the contents entail?
- Category: LLC
- Date:
- State: Washington
Answer:
The appropriate documents for this transaction depend on various factors, including any existing buy-sell agreements. The LLC's operating agreement typically outlines the procedures for selling interests in the business. You may need to amend the articles of organization or certificate of formation, and it's often advisable to have a buy-sell agreement in place. Additionally, you might require notices of meetings, resolutions, and possibly promissory notes or other documentation.
To terminate a membership or sell an interest, a vote of the members is usually necessary, requiring approval from a certain percentage of current LLC members. Ensure that all termination or buyout requirements in the operating agreement or buy-sell agreement are followed. Consulting an attorney to review the relevant documents and facts can help ensure compliance with all legal requirements.
A buy-sell agreement can facilitate the sale of an LLC interest. This agreement outlines the terms and conditions for future sales between members, limiting their ability to transfer interests outside the agreed terms. While most buy-sell agreements are designed for partnerships and corporations, they can be tailored for LLCs.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.