How does a buy/sell agreement work for an LLC?
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How does a buy/sell agreement work for an LLC?
LLC has 3 members with 32.33% each and all the voting shares and 3 members with 1% each and no voting shares. Can the 3 majority owners force the other 3 to sell out if they are trying to sell the entire company?
Asked on March 28, 2012 under Business Law, North Carolina
Answers:
Steven Fromm / Steven J Fromm & Associates, P.C.
Answered 12 years ago | Contributor
Without a review of the operating agreement this is all idle speculation. If there is something called a "tag along" provision then the minority shareholders cannot be left out of 3rd party sale. Take the agreement to a corporate/tax attorney to have it reviewed to get a conclusive answer.
Andrew Howard / Manning & Marder
Answered 12 years ago | Contributor
I agree 100% with the previous answer. There will likely be a provision in the LLC's Operating Agreement that governs this decision. It will probably be in a stand-alone section regarding disposition or winding down. Otherwise, the answer may be contained in the sections regarding managerial decisions. If the 3 majority owners have 100% of the voting control, and there are no provisions to the contrary, they may be able to vote for a sale of the company to a new owner.
Bradley Miller / Miller Law LLC
Answered 12 years ago | Contributor
From the title of the question, I am assuming there is a buy-sell agreement in place? Or at least part of the operating agreement? If so, then the terms of the buy-sell would apply. Unfortunately, I can't really speak to the specifics of the agreement without actually reading through it.
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