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
sell.
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.
misc.legal
http://groups.google.com/group/misc.legal/browse_frm/thread/e6d3dd51af0e45bf/81f3ce88538f04a3?lnk=st&q=transfer+llc&rnum=1&hl=en#81f3ce88538f04a3
"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
corporation."
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
permission.
Delaware LLC Formation
http://www.ukincorp.co.uk/s-7C-delaware-llc-formation.html
"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:
http://www.delcode.state.de.us/title6/c018/sc08/index.htm#TopOfPage
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.
--keystroke-ga |
