Google Answers Logo
View Question
Q: Transfering Onwership of an LLC Company ( Answered 5 out of 5 stars,   1 Comment )
Subject: Transfering Onwership of an LLC Company
Category: Business and Money > Small Businesses
Asked by: hbarra-ga
List Price: $35.00
Posted: 09 Oct 2006 15:44 PDT
Expires: 08 Nov 2006 14:44 PST
Question ID: 772112
I have registered a Delaware LLC company with the state of Delaware
using a company specialized in incorporation, who have also become my
registered agent.  No operating agreements or by-laws were drafted for
this LLC.  I have subsequently decided to transfer ownership of this
LLC to another person.  How should I proceed, given that an operating
agreement and initial by-laws were never drafted?
Subject: Re: Transfering Onwership of an LLC Company
Answered By: keystroke-ga on 09 Oct 2006 23:09 PDT
Rated:5 out of 5 stars
Hello hbarra,

Thank you for your question. 

Your situation is actually easier given that operating agreements and
bylaws were not drafted yet. Operating agreements are not required for
LLCs, but they are encouraged, especially when there are multiple
members. Usually, someone selling an LLC would have to check what
their operating agreement said on the possibility of a sale and they
would not be able to violate that agreement. You won't have to do
this. In fact, you won't have to do much and you're relatively lucky
that you hadn't drawn up agreements and bylaws before you decided to

In order to transfer the LLC, you simply must transfer your interest
to the new owner by agreeing on a selling price and using a bill of
sale (a receipt). The new owner can then draft his or her operating
agreement and bylaws on their own. Usually, they would revise the
operating agreement to suit their purposes, but in this situation they
can just start from scratch and write them up however they want.

"Assuming you are the sole owner and there is nothing in the operating
agreement making transfer difficult, you can simply use a bill of sale to
transfer your membership interest.  The new owner would then revise the
operating agreement.  Or you can use a contract called a purchase agreement
containing all of the terms of the transaction.  You can transfer the assets
and not the LLC membership interest using an asset sale agreement.  Remember
that corporations don't necessarily need to issue paper stock certificates
and LLC's can issue paper membership interest certificates.  Therefore, in
general terms, transferring an LLC is not different from transferring a

You would have to report the sale price as gains on your tax form.

I've provided this advice assuming that you run a single-member LLC.
If you do have other members, you can sell not only your economic
interest but your entire interest in the business with their
permission. You can sell your economic interest without their

Delaware LLC Formation

"A Limited Liability Company (LLC) member's economic interest may be
transferred by assignment. A transfer of an LLC member's economic
interest does not transfer the right to manage and participate in the
LLC. Usually, the member who receives the transferred LLC interest
attains non-economic rights, such as management and participation,
only with the agreement of the non-transferring members. The
Certificate of Formation and operating agreement often dictate the
terms under which non-economic membership interests are acquired. The
best course is to specifically address membership transfer terms in
the operating agreement."

At the time of sale, you could actually dissolve the LLC and then the
new owner could start their own completely new LLC, but you certainly
wouldn't have to do this, and it would probably be easier not to.

Here are the Delaware regulations on LLCs and when they can be dissolved:

Search terms:
sell llc
transfer llc
transfer llc operating agreement
delaware secretary of state

If you need any further clarification before rating, let me know and
I'll be glad to help.

hbarra-ga rated this answer:5 out of 5 stars

Subject: Re: Transfering Onwership of an LLC Company
From: denco-ga on 09 Oct 2006 23:57 PDT
Howdy hbarra-ga,

The State of Delaware repetitively suggests that for any such operations, you
should go through your registered agent, and I strongly suggest that you follow
their advice.

If you really want to do it yourself, it appears there are two operations that
should be performed, that my colleague might have overlooked.

The first is a "Transfer of Domestic LLC" and that runs $95.00.  There does
not appear to be a form online for this process, so you would have to contact
the Delaware Secretary of State office at 302.739.3073 for information on that.

The second operation is a "Transfer of Name Reservation," which
appears to be needed if the LLC is to maintain the same name.  This
runs $75.00 and here is
the link to the form.

This latter operation might not apply, as these forms are not the clearest,
hence the suggestion of going through your registered agent.

The above fees came from this Delaware Secretary of State document, which also
indicates the "Transfer of Domestic LLC" process.

Forms can be found at the following Delaware Secretary of State page.

Looking Forward, denco-ga - Google Answers Researcher

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy