|
Google ADS | ||
|
Prior to selling your Limited Liability Corporation (LLC), you'll need a buy-out agreement in place. A buy-out agreement is a contract that states what happens if a member of the corporation wants to leave the company, dies, goes bankrupt or gets a divorce. A buy-out agreement is an agreement among the current co-owners of a corporation and determines under what circumstances you can sell a corporation. It's essential that this document is in place before you make any negotiations to sell all or part of the company. |
||
|
Google ADS |
||
Step 1 Determine what events can trigger a buy-out. In your agreement, layout what events can trigger a buy-out, according to legal support service Nolo.com. These could include a death, a retirement, a bankruptcy or an offer from an outside member. Step 2 Decide who can buy into the company and at what price. Your company will, hopefully, grow through the years, and deciding what the criteria are for adding more partners is very important. If, for example, one of your members goes bankrupt, you can say in your buy-out agreement that a member must notify the other members before filing to give the other members the opportunity to buy that member out and keep a bank from owning part of the business. Step 3 Discuss expectations. Writing up this agreement gives you the opportunity to discuss potential events. You might want to put in a clause that states flexible buy-out terms, rather than requiring a 100 percent lump sum of a member's interest, in case the company doesn't have enough cash on hand to buy a member out if necessary. Step 4 Write up your buy-out agreement as either part of your operating agreement or as a separate document. You can do this yourself, or ask a lawyer to draft one for you. |
||
