Posts Tagged ‘buyout’

Can an LLC Own a Corporation?

Handing keys overThere are two types of corporations: C Corporations (or C Corps) and S Corporations (or S Corps). Both entities are identical in most ways and the variations occur largely in taxation; S Corps are pass-through tax entities — like LLCs — while C Corps pay a separate corporate tax. All corporations are C Corps unless Form 2553 was filed with the IRS to specifically elect S Corp taxation.

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Selling or Transferring Your Membership Interest in an LLC

Highway sign with the text LLC Membership SaleIf 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.

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When a Member Leaves an LLC

Business man walking awayLimited Liability Companies are generally intended to outlive their owners/members. Unless the LLC’s operating agreement specifies that the company dissolved when one member leaves the LLC, your business may continue on without the missing person. Outside of any other end-of-work agreement you may wish to use — such as nondisclosure agreements or non-compete contracts — there are only a few formalities you must follow when a member leaves your LLC.

The most important first step is to check your operating agreement.

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