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Llc Buyout Agreement Template for United States

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Key Requirements PROMPT example:

Llc Buyout Agreement

"I need an LLC Buyout Agreement for our California-based technology consulting firm where I, as the retiring founding member, will sell my 40% membership interest to the remaining three members in equal portions, with payments structured over 24 months starting March 2025."

Document background
The LLC Buyout Agreement is a critical document used when one or more members of a Limited Liability Company seek to sell their ownership interests to other members or third parties. This agreement is essential in the United States business landscape where LLCs are a prevalent business structure. It becomes necessary in various scenarios, including retirement of members, strategic exits, dispute resolutions, or business restructuring. The document must comply with both federal and state-specific regulations, particularly state LLC laws, federal tax codes, and potentially securities regulations. It typically includes detailed provisions for valuation, payment terms, representations and warranties, tax allocations, and post-closing obligations. The agreement's complexity often requires careful consideration of state-specific requirements, tax implications, and the LLC's operating agreement provisions.
Suggested Sections

1. Parties: Identification of the selling member(s), purchasing member(s), and the LLC

2. Background: Context of the transaction, current ownership structure, and reason for the buyout

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale of Interest: Core transaction terms including the membership interest being sold

5. Purchase Price: Agreed value and payment terms for the membership interest

6. Closing: Timing, location, and mechanics of the transaction closing

7. Representations and Warranties of Seller: Seller's assertions about ownership, authority, and status of the interest being sold

8. Representations and Warranties of Buyer: Buyer's assertions about authority and capability to complete the purchase

9. Covenants: Actions parties must take or refrain from before and after closing

10. Conditions to Closing: Requirements that must be met before the transaction can close

11. Tax Matters: Treatment of tax liabilities and obligations related to the transfer

12. Release: Mutual release of claims between parties post-closing

13. Confidentiality: Obligations regarding non-disclosure of sensitive information

14. Indemnification: Obligations to protect each party from certain losses or claims

15. General Provisions: Standard legal provisions including notices, amendments, governing law, etc.

Optional Sections

1. Earnout Provisions: Used when part of the purchase price is contingent on future performance

2. Non-Compete Provisions: Used when the seller needs to be restricted from competing post-sale

3. Transition Services: Used when the seller will provide operational support post-closing

4. Employee Matters: Used when the buyout affects employment relationships or agreements

5. Intellectual Property Rights: Used when IP ownership or licensing needs to be addressed

6. Bank Accounts and Banking Matters: Used when banking relationships need to be transferred or modified

7. Real Estate Matters: Used when the LLC owns or leases real property that needs special attention

8. Environmental Matters: Used when environmental liabilities or compliance issues exist

Suggested Schedules

1. Schedule A - Membership Interest Description: Detailed description of the membership interest being transferred

2. Schedule B - Purchase Price Calculation: Detailed breakdown of how the purchase price was determined

3. Schedule C - Closing Deliverables: List of all documents and items to be delivered at closing

4. Schedule D - Existing Liabilities: List of known liabilities affecting the membership interest

5. Schedule E - Required Consents: List of third-party consents needed for the transfer

6. Appendix 1 - Form of Release: Form of mutual release to be executed at closing

7. Appendix 2 - Transfer Instruments: Forms of documents needed to effect the transfer

8. Appendix 3 - Amended Operating Agreement: Revised LLC operating agreement reflecting new ownership structure

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions







































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Relevant Industries

Real Estate

Professional Services

Manufacturing

Technology

Retail

Healthcare

Construction

Entertainment

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Consulting

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Energy

Relevant Teams

Legal

Finance

Tax

Corporate Development

Executive Leadership

Mergers & Acquisitions

Compliance

Treasury

Corporate Governance

Business Operations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Attorney

Tax Attorney

Business Development Director

Managing Partner

Corporate Secretary

Financial Controller

Managing Member

Business Owner

Mergers & Acquisitions Director

Investment Manager

Corporate Paralegal

Business Valuation Specialist

Tax Manager

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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