"LLC Buyout Agreement Template"

What Is an LLC Buyout Agreement?

An LLC Buyout Agreement is a legal document that records the decision of a limited liability company (LLC) member to leave the company and outlines the steps that will be taken once that departure takes place. You should prepare this document to avoid people you do not know receiving ownership stake, secure interests in case of a member's or partner's disability or death, and establish a fair price for this member's share of business for other members who choose to remain.

Various events and personal situations can trigger the buyout - long-term illness or disability, divorce, bankruptcy, retirement, transfer of ownership, or death. You need to be prepared when one of the LLC members chooses to leave the organization, retires, or dies. If you do not have this contract in place, depending on the laws and regulations of your state, you may be forced to pay off the debts of the company and dissolve the LLC with all assets divided among the members.

An LLC Buyout Agreement Form can be downloaded below. You may print it out and complete along with other official documentation of your LLC:

  1. LLC Articles of Organization indicate the main information about the organization for the public records and begin the official business activity of any company.
  2. An LLC Operating Agreement belongs to the internal documentation of the company and establishes various rules and procedures that specify the day-to-day course of business.
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How to Write an LLC Buyout Agreement?

It is highly recommended to discuss, negotiate, and prepare an LLC Buyout Agreement Template before an unexpected situation. You can draft this document when you start your company or create it later at any convenient time - for instance, if a member or partner is planning to leave the company, you can call a member meeting to determine what to include in the agreement.

Here is how you compose an LLC Partner Buyout Agreement:

  1. Confirm the member's decision to leave the company.
  2. Indicate the reason for the member's departure and the date when that happened or will happen if you control the circumstances of the departure.
  3. Outline the rights of the departing member and remaining members. You need to figure out the value of the membership stake and the terms of the upcoming purchase. All members have to agree with the membership valuation and decide whether the departing member's ownership percentage will be purchased with installments or a lump-sum payment.
  4. Name individuals who will be allowed to purchase the interest of the departing member. In accordance with the internal documentation of your company, you can allow outsiders to buy this interest or limit this option to other members of the LLC. Members of the LLC can prevent any member from transferring their interest to certain individuals or entities with whom they would not want to do business.
  5. Sign the agreement. You must obtain signatures of all members, remaining and departing, to show the acknowledgment of the situation.

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LLC Buyout Agreement
This LLC Buyout Agreement (hereinafter referred to as the “Agreement”) is made by and
between the __________________, an __________________ with a mailing address of
________________________________________________________________________
_______________ (hereinafter referred to as the “Seller”), and __________________ an
__________________ with a mailing address of ________________________________
_______________________________________ (hereinafter referred to as the “Buyer”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
RECITALS
WHEREAS, the Seller has right, title and membership interest in __________________,
a _________________ Limited Liability Company (hereinafter referred to as the “LLC”);
State
WHEREAS, the Seller's membership interest is equal to _____% ownership in the LLC;
WHEREAS, the Buyer desires to purchase the Seller's total membership interest in the
LLC (hereinafter referred to as the “Membership Interest”);
WHEREAS, the LLC maintains an Operating Agreement, dated __________________,
which governs the business of the LLC and the members’ business relations (hereinafter
referred to as the “Operating Agreement’);
WHEREAS, the Operating Agreement permits the sale of the Seller's interest to the
Buyer;
WHEREAS, the Seller and the Buyer agree to complete the sale of the Membership
Interest through this Agreement and each abide by the terms and conditions herein.
1. Sale. The Buyer agrees to purchase the Membership Interest for the total sale price of
$__________________ (hereinafter referred to as the “Total Sale Price”). This sale
leaves the Seller with no rights in the LLC.
2. Payment. ​ T he Total Sale Price will be paid in one lump sum payment. The methods of
payment the Seller will accept are as follows:
________________________________________________________________________
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LLC Buyout Agreement
This LLC Buyout Agreement (hereinafter referred to as the “Agreement”) is made by and
between the __________________, an __________________ with a mailing address of
________________________________________________________________________
_______________ (hereinafter referred to as the “Seller”), and __________________ an
__________________ with a mailing address of ________________________________
_______________________________________ (hereinafter referred to as the “Buyer”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
RECITALS
WHEREAS, the Seller has right, title and membership interest in __________________,
a _________________ Limited Liability Company (hereinafter referred to as the “LLC”);
State
WHEREAS, the Seller's membership interest is equal to _____% ownership in the LLC;
WHEREAS, the Buyer desires to purchase the Seller's total membership interest in the
LLC (hereinafter referred to as the “Membership Interest”);
WHEREAS, the LLC maintains an Operating Agreement, dated __________________,
which governs the business of the LLC and the members’ business relations (hereinafter
referred to as the “Operating Agreement’);
WHEREAS, the Operating Agreement permits the sale of the Seller's interest to the
Buyer;
WHEREAS, the Seller and the Buyer agree to complete the sale of the Membership
Interest through this Agreement and each abide by the terms and conditions herein.
1. Sale. The Buyer agrees to purchase the Membership Interest for the total sale price of
$__________________ (hereinafter referred to as the “Total Sale Price”). This sale
leaves the Seller with no rights in the LLC.
2. Payment. ​ T he Total Sale Price will be paid in one lump sum payment. The methods of
payment the Seller will accept are as follows:
________________________________________________________________________
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T EMPLATEROLLER.COM
________________________________________________________________________
________________________________________________________________________
3. Closing. ​ T he Total Sale Price will be paid in full by __________________ (hereinafter
referred to as the “Closing Date”). On the Closing Date, the parties will meet as follows:
________________________________________________________________________
________________________________________________________________________
Address of Closing
________________________________________________________________________
Time of Closing
On the Closing Date, the Parties will ensure all required documentation between them is
complete, including that required for the sale as well as the transfer of the Membership
Interest. The Seller shall deliver to the Buyer a full executed LLC Membership Interest
Assignment. If there are any additional certificates or membership forms required, Seller
will also deliver these to the Buyer on the Closing Date.
4. Rights. ​ T he Membership Interest comes with voting rights in the LLC.
5. Operating Agreement. ​ A fter the completion of the sale, the Buyer agrees at all times
to abide by the LLC Operating Agreement and may be required to execute the Buyer's
signature as such.
6. Seller Representation and Warranties. ​ T he Seller hereby represents and warrants
that Seller has good title to the Membership Interest conveyed herein and that the Seller
has no limitations on making such sale and assignment, such as any security interest, lien,
or encumbrance. The Seller has the consent of all required members, as evidenced by the
Consent To Sale Of Membership Interest below.
Additionally, the Seller represents and warrants that the Operating Agreement in no way
restricts or invalidates the sale of the Membership Interest to the Buyer.
The Seller further represents and warrants that it will take any steps to perfect the Buyer's
receipt of the Membership interest in the LLC as required.
7. Buyer Representation and Warranties. ​ T he Buyer hereby represents and warrants
that the execution of this sale will not put the Buyer in default of any contractual
relationship to which the Buyer is a party and that the Buyer will deliver the Total Sale
Price as required under this Agreement.
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The Buyer further represents and warrants that the Buyer does not intend to further sell or
distribute this Membership Interest and that the Buyer is purchasing the Membership
Interest for the Buyer's own personal purposes, whether for membership involvement in
the LLC or as a personal investment.
The Buyer warrants that the Buyer has consulted with legal and investment advisors
regarding the sale or waives the right to do so. The Buyer fully understands the benefits
and risks of purchasing the Membership Interest.
8. No Public Interest. The Membership Interest being sold herein has not been registered
under the Federal Securities Act of 1933, nor any state securities laws. The Membership
Interest will not be registered under the Federal Securities Act of 1933, nor any state
securities laws. The sale of Membership Interest does not involve any public offering,
and the Buyer and the Seller may complete the sale in reliance upon federal and state
exemptions for public transactions.
9. Expenses. Each Party is responsible for its own costs and expenses in connection with
this Agreement.
10. No Guarantees. The Seller does not guarantee any specific performance of the LLC,
including through sales, distributions, or otherwise. The Buyer accepts that the sale of
this Membership Interest is “as is.”
11. Indemnity. The Seller agrees to indemnify and hold the Buyer harmless from any
losses, claims, or demands which may have arisen from the Seller's ownership of the
Membership Interest. The Seller agrees to ensure any and all of the Seller's promises to
the LLC, as a result of the Seller's ownership, are fulfilled or properly transferred to the
Buyer, with the knowledge and consent of the Seller, the Buyer, and the LLC at large,
including promises of any contributions or promises which may stem from the Seller's
receipt of distributions.
12. General Provisions.
A. Language. All communications made pursuant to this Agreement shall be in the
English language.
B. Jurisdiction, Venue, and Choice of Law. ​ T he laws of the jurisdiction where the
LLC filed its formation documents, specifically the state of __________________
shall be applicable to this Agreement, with the exception of its conflict of law
provisions.
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C. Assignment. ​ T his Agreement, or the rights granted hereunder, may not be
assigned, sold, leased, or otherwise transferred in whole or part by either Party,
without the written consent of the other.
D. Severability. If any part or sub-part of this Agreement is held invalid or
unenforceable by a court of law or competent arbitrator, the remaining parts and
sub-parts will be enforced to the maximum extent possible. In such a condition,
the remainder of this Agreement shall continue in full force.
The Parties agree to the terms and conditions set forth above as demonstrated by their
signatures as follows:
_________________________________
_________________________________
Seller’s Printed Name
Buyer’s Printed Name
_________________________________
_________________________________
Seller’s Signature
Buyer’s Signature
_________________________________
_________________________________
Date
Date
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