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> https://www.legalzoom.com/articles/how-to-transfer-ownership-of-an-llc <https://www.legalzoom.com/articles/how-to-transfer-ownership-of-an-llc>
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> How to Transfer Ownership of an LLC
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> Jane Haskins, Esq. </authors/jane-haskins-esq>
> Many limited liability companies have a change in ownership at some point during the life of the business.
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> Ownership changes happen for a variety of reasons, including:
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> A member decides to leave the company
> The existing members want to bring in a new member
> A member dies, becomes disabled or divorces
> You decide sell the entire business
> The procedure to transfer LLC ownership depends on whether you’re transferring the whole business or only changing the names and percentage ownerships of the members—such as when you take on a new member or buy out a departing member.
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> Transferring a Partial Interest in the LLC
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> Your LLC’s owners are called members. Each member owns a percentage of the business, which is known as a membership interest. If you want to change the percentage of ownership or add new members, you will need to transfer some of your LLC’s membership interests.
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> They key document that will guide you in how to transfer ownership in an LLC is your LLC operating agreement </knowledge/limited-liability-company/glossary/llc-operating-agreement>.
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> You most likely signed an operating agreement when you set up your LLC. The operating agreement is a contract among the LLC’s members that specifies the way the LLC will operate. If it includes buy-sell or buyout provisions, those will govern the way you transfer ownership. Alternatively, your LLC may have a separate buy-sell agreement.
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> The buy-sell provisions will typically specify a method for placing a value on the business and its membership interests. They also might place restrictions on who becomes a member, require the LLC to buy back shares from a departing member, or specify what needs to be done to approve a transfer.
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> If your operating agreement does not include a buy-sell agreement, you should check your state statutes for guidance on how to transfer membership interests. You may be able to negotiate a buy-sell agreement or a written agreement to transfer ownership. In some states, you may have to dissolve the company <http://www.legalzoom.com/additional-business-services/articles-of-dissolution-corporation-llc.html> if your operating agreement does not provide for ownership transfers. Since these actions can have long-term consequences for your business, it’s wise to consult with a lawyer.
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> This is also a good time to review your operating agreement and make sure it is relevant and meets your needs now that your membership is changing. For example, an operating agreement for a single-member LLC may be missing some provisions that are needed for a multi-member LLC.
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> If your old operating agreement seems inadequate, you should prepare and sign a new one that reflects the new ownership structure. If you don’t need a new agreement, you can prepare an amendment <http://www.legalzoom.com/additional-business-services/articles-of-amendment-corporation-llc.html>that lists the new members.
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> You typically don’t need to file anything with the state to finalize the ownership transfer, but you’ll want to list the current members as part of any annual reports <http://www.legalzoom.com/additional-business-services/annual-reports.html> you make to the state.
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> Selling an LLC
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> Despite its name, a buy-sell agreement doesn’t offer guidance on how to sell your entire business to a third party—it only governs the way the members will transfer their membership interests among themselves and new members.
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> To sell an LLC, you need to find a buyer and agree on a price. This may involve using the services of a business valuation expert, having the buyer examine your business’s books and records, or a combination of the two. A buyer may want to purchase the entire LLC or may only want to purchase its assets.
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> Selling an LLC can have complex financial, legal and tax implications, so it’s best to consult a lawyer who has experience with buying and selling LLCs.
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> The terms of the sale may initially be memorialized in a term sheet or memorandum of understanding, followed by a more formal contract.
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> It’s always best to plan ahead for LLC ownership transfers by including buy-sell provisions in your operating agreement. Buy-sell provisions can help a transfer go smoothly and avoid disruptions to your business. If you don’t have a buy-sell agreement, or if you want to sell your entire business, you may need to seek legal advice.
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> For questions or advice on transferring ownership of an LLC, you can talk to a lawyer through the LegalZoom business legal plan <https://www.legalzoom.com/attorneys-lawyers/legal-plans/business>.
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Liz Olivere Secundy
Lizsecundy@aol.com
(302) 530-0600