Selling or Transferring Your Membership Interest in an LLC
If you co-own an LLC with one or more partners and are ready to leave the LLC, you may be able to sell or transfer your membership interest. Having a current LLC member buy out your share in the LLC is the easiest and most direct method, but you may also be able to assign your LLC membership interest to a third party.
Assignment of interest in an LLC is a topic usually covered in the LLC’s operating agreement. If there is a provision in the agreement about LLC interest assignment, you must follow whatever the listed requirements are. If your LLC does not have an operating agreement or if the operating agreement is silent on the issue, you must apply your state’s default rules.
Each state has a set of default rules meant to govern an LLC when the members have not agreed to a set of rules in advance. Unfortunately, state rules vary. Consider the two following statutes:
Unless otherwise provided in the articles of organization or the regulations, a member’s interest in a limited liability company is not assignable in whole or in part, unless a majority of the nonassigning members consent to the assignment.
-Florida Statutes Section 608.432 (Transferability of Member’s Interest)
Stated differently, you may only transfer (either by selling or freely assigning) your LLC membership interest to another person if the operating agreement specifically permits you to or if a majority of your partners consent to the transfer. On the other hand, a different state’s statute says:
Except as provided in the operating agreement, a membership interest is assignable in whole or in part.
-New York Statutes Article VI Section 603 (Assignment of Membership Interest)
Stated differently, you may transfer (either by selling or freely assigning) your LLC membership interest to another person unless the operating agreement specifically prohibits you from doing so.
These two rules take opposite approaches to the problem, and many states follow the principals of the first statute (assignment of membership interests only if explicitly permitted) while many follow the principals of the second (unrestricted assignment of LLC interests unless explicitly prohibited).
Before you begin the sale of your LLC share, consult your state’s laws. If you cannot find the appropriate statute for your state or do not understand how the rule applies to your situation, contact your Secretary of State or a licensed business attorney.
Incoming search terms:yhs-fullyhosted_003 (99), selling an llc (50), SALE OF LLC INTEREST (37), sale of llc membership interest (32), sale of membership interest in llc (24), llc membership interest transfer agreement (18), assignment of llc membership interest (17), LLC membership transfer agreement (15), transfer of membership interest in llc (14), assignment of llc interest (13), assignment of interest in llc (12), Assignment of Membership Interest Agreement (10), how do u transfer an interest in an LLC (2), transfer of limited liability company units (2), selling an llc in texas (2), transfer of llc shares new york form (1), what form is required by the state of pennsylvania to transfer ownership of a llc (1), selling limited liablity partnership sharing the interest (1), selling interest in llc (1), what is a transfer of membership interest? (1), selling a profits interest in llc (1), selling a profit interest (1), selling a llc to your children (1), tax conseqeunces of sale of membership interest (1), transferring an llc to another person (1), selling llc membership interest (1), transfer of llc member units (1), transfer of LLC interest in two member LLC to remaining member (1), Transfer of LLC Interest Agreement (1), transfer of a portion of llc interest in texas (1), transfer ownership interest from member to a new member (1), transfer llc shares to another member (1), the transfer of shares llc alaska (1), transferring an llc membership interest (1), selling shares of an llc without transfering member status (1), selling part of your llc (1), transfer llc unit certificate (1), sample llc transfer of ownership interest (1), sale of an llc (1), HOW TO SELL A PA LLC (1), HOW TO DO A TAX FREE SALE OF A PARTNERSHIP IN EXCHANGE FOR INTEREST IN NE WPARTNERSHIP (1), how do you sell shares in an llc (1), how do I sell my shares in an llp (1), gift transfer of llc (1), form to assign or transfer membership in llc (1), florida SMLLC transfer of interest (1), does an assignee of an LLC unit have to sign the operating agreement? (1), documenting the transfer of stocks in an LLC (1), can one person sell partnership interest and retain partnership (1), california llc transfer of membership interests (1), how to sell shares o an llc (1), how to transfer single member llc ownership in new york (1), If you transfer more than 50% of your units in an LLC State of WA (1), release and sold interest (1), Prepare one Assignment of Membership Interest Agreement (1), online transfer of member interest llc (1), offer to sell membership interest (1), ny llc member rules for selling (1), maryland llc purchase of membership interest over $1M (1), Limitation on transfer members interest if and only if (1)