How to Transfer LLC Membership Interest in Florida
3 Essential Documents to Purchase or Transfer LLC Membership Interest in Florida
As is the case in most states, a Florida LLC’s owners are known as its Members. Their ownership in the company is known as their “membership interest.” While transferring membership interest in a Florida LLC tends to be more complicated than transferring membership in a Florida corporation, it’s still possible – and sometimes necessary, such as in the case of death – in some situations.
Here are three documents needed to transfer LLC membership interest in Florida, as well as some basic information for making it happen. As with all high-value transactions, it’s a good idea to find an attorney to guide you through the process and to advocate for your interests throughout the course of the deal.
Operating Agreement
The process for how an owner can transfer LLC membership interest in Florida should be detailed in the company’s Operating Agreement. An Operating Agreement is a document that covers a variety of topics related to governing and managing the LLC. While not required by Florida law, it’s still essential to keeping your business running smoothly well into the future. You can read more about why by checking out our article here. If your Florida LLC doesn’t have an Operating Agreement already, we highly recommend contacting a local attorney to draft one for you.
Just how difficult it will be to transfer LLC membership interest in Florida depends on the Operating Agreement’s specific provisions. While many business owners prefer to make the transfer as easy as possible, more insular LLCs have the option of placing restrictions on interest transfers to exert more control over membership in the company. Without an Operating Agreement, membership interest can be left vulnerable to probate court and creditors. You’ll also need to obtain approval from a majority of the business’s owners in order to approve the transfer.
Membership Interest Transfer or Membership Interest Purchase Agreement
After you’ve checked your Florida LLC’s Operating Agreement for the specifics of the transfer, it will then be time to draft up a Membership Interest Transfer Agreement. Also known as a Membership Interest Purchase Agreement, his is the primary component of the transfer and should address all agreements and information critical to the process. This includes everything from the final selling price to “restrictive covenants,” such as non-disclosure and non-compete clauses, as well as the usual boilerplate provisions that can be found in most contracts. Because of the stakes involved when you transfer LLC membership interest in Florida, it’s advisable to hire a lawyer to draw up the Membership Interest Transfer Agreement or Membership Interest Purchase Agreement on your company’s behalf.
Bill of Sale
The final document that you’ll need to transfer LLC membership interest in Florida will be the Bill of Sale. The Bill of Sale, like a corporation’s stock certificates, records the transaction and any pertinent details, such as the final amount paid in exchange for the membership interest. This document is useful for tax purposes, as well as for negotiating future membership interest transfers. Make sure that you store it someplace secure yet easy to find so that you won’t be left scrambling when you need it later on.
LLCs from all over Florida have hired FL Patel Law to oversee their Membership Interest Transfers because they know that our experience and dedication make us a trustworthy ally. With our legal team at your side, there’s no need to worry about confusion or mistakes derailing your transaction. For assistance with drafting your Membership Interest Purchase Agreements or other matters related to how to transfer LLC membership interest in Florida, schedule a consultation with our attorney online or call us at (727) 279-5037.
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