In the absence of a valid restriction, a member in an LLC may transfer his/her interest in the LLC (usually expressed in membership units ) to anyone. Restrictions on the transfer of membership units are valid if they are not unreasonable. This form provides that the LLC has the right to purchase a members membership units upon his death. The LLC can fund this transaction through a life insurance policy on the members life with the proceeds going to the LLC. The proceeds will then be used to buy the deceased members membership units.
A restriction on the right to transfer membership units is not effective against a purchaser of the unit unless the purchaser knows of the restriction. Such a restriction can be conspicuously noted on the membership certificates.
This form is set up as a Buy Sell Agreement between the LLC and a key member. It applies in the case of the death, disability, retirement or offer of member to sell his membership units during his lifetime.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Louisiana Buy Sell or Stock Purchase Agreement between Individual Members is a legally binding document that outlines the terms and conditions of buying or selling membership units in a Limited Liability Company (LLC) within the state of Louisiana. This agreement provides a structured framework for members to protect their investment in the LLC and ensure a smooth transition of ownership in the event of certain trigger events, such as death, disability, retirement, or voluntary withdrawal. One variant of this agreement includes an option to fund the purchase through life insurance. This means that the agreement allows the remaining or surviving members of the LLC to use the proceeds from a life insurance policy to finance the purchase of the membership units from a deceased member's estate. This option provides financial security and liquidity to the members, enabling them to quickly fulfill their obligations under the agreement without incurring significant personal financial burdens. The Louisiana Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in an LLC typically includes the following key components: 1. Identity and Membership Units: The agreement identifies the individual members involved in the transaction, along with their respective membership units in the LLC. It outlines the number and value of the units being bought or sold. 2. Trigger Events: The agreement specifies the trigger events that activate the buy-sell provisions, such as death, disability, retirement, or voluntary withdrawal. These triggers initiate the buyout process and determine who has the right to purchase the membership units. 3. Purchase Price and Terms: The agreement determines the purchase price of the membership units, either through a predetermined formula or by obtaining an independent valuation. It also outlines the terms and conditions of the purchase, such as payment terms, allocation of liabilities, and any necessary adjustments. 4. Funding Options: If applicable, the agreement includes provisions for funding the purchase through life insurance. It outlines the requirements and procedures for obtaining and maintaining the insurance policies, as well as the process for utilizing the insurance proceeds for the buyout. 5. Restrictions on Transfer: The agreement may include restrictions on transferring membership units to non-members, ensuring that the ownership and control of the LLC remain with its existing members or their designated beneficiaries. 6. Dispute Resolution: To mitigate potential conflicts, the agreement may include dispute resolution mechanisms, such as mediation or arbitration, to address any disagreements that may arise between the members during the buyout process. In addition to the general Louisiana Buy Sell or Stock Purchase Agreement described above, there may be other variations tailored to specific situations or preferences. For example, some agreements may focus on a specific trigger event, such as a disability buyout agreement, while others may include provisions for different funding methods, such as using personal savings or external financing rather than life insurance. Each variant would address the specific needs and circumstances of the LLC and its members.
