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:
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