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.
Oregon 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 is a legally binding agreement that outlines the terms and conditions for the purchase or sale of membership units in an LLC. This agreement is specifically designed to be used between individual members of an LLC in the state of Oregon. The primary purpose of this agreement is to provide a mechanism for members to sell or transfer their membership units to other members or third parties. It covers various important aspects such as the purchase price, allocation of ownership percentage, valuation methods, and the terms of payment for the purchase. The agreement also includes an option to fund the purchase through life insurance. This means that the purchasing member may opt to take out a life insurance policy on the selling member and use the proceeds from the policy to fund the purchase of the membership units upon the death of the insured member. This option ensures financial security for both parties involved. In the state of Oregon, there may be different types of Buy Sell or Stock Purchase Agreements depending on the specific needs and circumstances of the LLC and its members. These variations could include: 1. Cross-Purchase Agreement: This type of agreement allows each individual member to buy the membership units directly from the selling member. Each purchasing member is allocated a proportional share of the membership units. 2. Entity Purchase Agreement: In this type of agreement, the LLC itself is the buyer of the membership units. The LLC uses its own funds to finance the purchase, either through cash reserves, loans, or other sources. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and entity purchase agreements. In this case, the LLC and one or more individual members may have the option to purchase the membership units, depending on certain circumstances or triggers outlined in the agreement. It is important for members of an LLC in Oregon to carefully consider their specific goals and objectives when choosing the type of Buy Sell or Stock Purchase Agreement that suits their needs. Seeking legal advice from a qualified attorney is strongly recommended ensuring compliance with Oregon state laws and to achieve the desired outcome for all parties involved.
