When it comes to running a business, there may come a time when the ownership of the company needs to be transferred from one party to another. A Limited Liability Company (LLC) is a popular business structure because of the liability protection it offers to its owners. When an LLC transfer of ownership agreement is needed, it is important to have a well-drafted legal contract in place to ensure a smooth transition and avoid any potential legal disputes.
A transfer of ownership agreement is a legally binding document that outlines the terms and conditions of the transfer of ownership from one party to another. This agreement is necessary to clearly define the responsibilities and obligations of both parties involved in the transfer. The agreement should include details such as the effective date of the transfer, the price of the transfer, and any other relevant terms and conditions.
To help you get started, we have provided a sample LLC transfer of ownership agreement that can be customized to meet your specific needs:
Sample LLC Transfer of Ownership Agreement
This LLC Transfer of Ownership Agreement (“Agreement”) is made and entered into on [Effective Date], by and between [Transferor Name], LLC, a [state of formation] limited liability company (“Transferor”), and [Transferee Name], LLC, a [state of formation] limited liability company (“Transferee”).
Recitals:
– Transferor is the current owner of [Percentage of Ownership] interest in the [Name of LLC] limited liability company.
– Transferor desires to sell [Percentage of Ownership] interest in the LLC to Transferee.
– The parties desire to enter into this Agreement to govern the transfer of ownership.
Agreement:
1. Purchase Price. Transferee agrees to pay Transferor the sum of [Purchase Price] for [Percentage of Ownership] interest in the LLC.
2. Closing. The closing of the transaction contemplated by this Agreement will take place on [Closing Date].
3. Representations and Warranties. Transferor represents and warrants that it is the lawful owner of [Percentage of Ownership] interest in the LLC and has the right to sell said interest. Transferee represents and warrants that it has all necessary power and authority to purchase [Percentage of Ownership] interest in the LLC.
4. Further Assurances. Each party agrees to take all necessary actions and execute all necessary documents to consummate the transaction contemplated by this Agreement.
5. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the state of [State of Formation of LLC].
6. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, and understandings between the parties.
7. Notices. All notices, requests, demands, or other communications required or permitted by this Agreement will be in writing and will be sent by certified mail or delivered by hand to the respective parties at the following addresses:
Transferor:
[Address]
[City], [State] [Zip]
Transferee:
[Address]
[City], [State] [Zip]
8. Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[Transferor Name], LLC
By: _______________
[Authorized Signature]
[Transferee Name], LLC
By: _______________
[Authorized Signature]
Conclusion:
An LLC transfer of ownership agreement is an important legal document that protects both parties involved in the transfer of ownership from any potential legal disputes that may arise. It is important to consult an attorney experienced in business law to ensure that your transfer of ownership agreement meets all necessary legal requirements and protects your interests. Use the sample agreement provided as a guide to drafting your own agreement and you’ll be on your way to a smooth transfer of ownership process.