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.
Missouri Buy-Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company — LL— - with an Option to Fund the Purchase through Life Insurance In Missouri, a Buy-Sell or Stock Purchase Agreement is a critical legal document used by members of a Limited Liability Company (LLC) to govern the sale and transfer of membership units. This agreement outlines the terms and conditions under which an existing member can sell their membership units to other individual members in the LLC, and also includes an option to fund the purchase through life insurance. The Missouri Buy-Sell or Stock Purchase Agreement provides a comprehensive framework for both the selling member and purchasing members. Some key elements covered in the agreement include: 1. Identification of the Parties: The agreement clearly identifies the individual members involved in the transaction, along with their respective ownership interests and the number of membership units being bought or sold. 2. Purchase Price and Terms: The agreement specifies the purchase price for the membership units and the agreed-upon terms of payment. It can include provisions for payment in installments or lump sum, along with any relevant interest rates. 3. Valuation Process: If the agreement does not prescribe a specific valuation method for the membership units, it may outline the process by which the price will be determined, such as using the fair market value or conducting an independent appraisal. 4. Triggering Events: The agreement identifies events that could trigger the need for a buy-sell transaction, such as the death, disability, retirement, or withdrawal of a member or any other agreed-upon circumstances. 5. Option to Fund the Purchase through Life Insurance: This particular type of buy-sell agreement includes provisions for utilizing life insurance policies to fund the purchase of membership units. By applying the proceeds from a life insurance policy, the purchasing members can ensure the smooth transfer of ownership and avoid financial burdens. Different variations or types of Missouri Buy-Sell or Stock Purchase Agreements may exist, depending on the specific needs and preferences of the LLC members. Some possible variations include: 1. Cross-Purchase Agreement: Under this arrangement, individual members agree to purchase the membership units of a departing member directly from them. Each member may have their own life insurance policy to fund potential buyouts. 2. Entity Purchase Agreement: In this scenario, the LLC itself agrees to purchase the membership units from the departing member, using life insurance policies owned or maintained by the LLC. 3. Wait-and-See Agreement: This type of agreement allows the purchasing members to choose between a cross-purchase or entity purchase arrangement when the triggering event occurs. The decision is typically based on the specific circumstances at that time. Overall, these Missouri Buy-Sell or Stock Purchase Agreements provide a legal framework for anticipated and unexpected ownership changes in an LLC, protecting the interests of all parties involved while offering a funding option through life insurance policies.Missouri Buy-Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company — LL— - with an Option to Fund the Purchase through Life Insurance In Missouri, a Buy-Sell or Stock Purchase Agreement is a critical legal document used by members of a Limited Liability Company (LLC) to govern the sale and transfer of membership units. This agreement outlines the terms and conditions under which an existing member can sell their membership units to other individual members in the LLC, and also includes an option to fund the purchase through life insurance. The Missouri Buy-Sell or Stock Purchase Agreement provides a comprehensive framework for both the selling member and purchasing members. Some key elements covered in the agreement include: 1. Identification of the Parties: The agreement clearly identifies the individual members involved in the transaction, along with their respective ownership interests and the number of membership units being bought or sold. 2. Purchase Price and Terms: The agreement specifies the purchase price for the membership units and the agreed-upon terms of payment. It can include provisions for payment in installments or lump sum, along with any relevant interest rates. 3. Valuation Process: If the agreement does not prescribe a specific valuation method for the membership units, it may outline the process by which the price will be determined, such as using the fair market value or conducting an independent appraisal. 4. Triggering Events: The agreement identifies events that could trigger the need for a buy-sell transaction, such as the death, disability, retirement, or withdrawal of a member or any other agreed-upon circumstances. 5. Option to Fund the Purchase through Life Insurance: This particular type of buy-sell agreement includes provisions for utilizing life insurance policies to fund the purchase of membership units. By applying the proceeds from a life insurance policy, the purchasing members can ensure the smooth transfer of ownership and avoid financial burdens. Different variations or types of Missouri Buy-Sell or Stock Purchase Agreements may exist, depending on the specific needs and preferences of the LLC members. Some possible variations include: 1. Cross-Purchase Agreement: Under this arrangement, individual members agree to purchase the membership units of a departing member directly from them. Each member may have their own life insurance policy to fund potential buyouts. 2. Entity Purchase Agreement: In this scenario, the LLC itself agrees to purchase the membership units from the departing member, using life insurance policies owned or maintained by the LLC. 3. Wait-and-See Agreement: This type of agreement allows the purchasing members to choose between a cross-purchase or entity purchase arrangement when the triggering event occurs. The decision is typically based on the specific circumstances at that time. Overall, these Missouri Buy-Sell or Stock Purchase Agreements provide a legal framework for anticipated and unexpected ownership changes in an LLC, protecting the interests of all parties involved while offering a funding option through life insurance policies.
