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.
The Washington Buy Sell or Stock Purchase Agreement is a legal document designed to cover the purchase and sale of membership units in a Limited Liability Company (LLC) with an additional option to fund the purchase through life insurance. This comprehensive agreement outlines the terms and conditions under which the buying and selling parties can transfer ownership interests in an LLC, ensuring a smooth and controlled transition. In regard to funding the purchase through life insurance, this option allows the buying party to utilize the proceeds of a life insurance policy to finance the acquisition of membership units. By incorporating this funding option, the agreement provides an extra layer of financial security for the purchasing party and enables them to complete the transaction without extensive cash outlays or borrowing. There may be different variations or types of the Washington Buy Sell or Stock Purchase Agreement Covering Membership Units in an LLC with an Option to Fund the Purchase through Life Insurance, depending on the specific circumstances and preferences of the parties involved. Here are a few examples: 1. Cross-Purchase Agreement: This type of agreement occurs when the remaining LLC members agree to purchase the membership units of a departing or deceased member. In this scenario, each member takes out a life insurance policy on the other members. When a member passes away or wishes to sell their units, the remaining members use the life insurance proceeds to buy those units. 2. Entity Purchase (Stock Redemption) Agreement: In this arrangement, the LLC itself is the purchasing party. The company directly buys back the membership units of a departing or deceased member using life insurance proceeds. This type of agreement is often ideal for larger LCS or in situations where there are multiple members involved. 3. Wait and See Agreement: This variation allows the purchasing party to choose between cross-purchasing or entity purchasing based on the specific circumstances at the time of the member's departure or death. The agreement outlines the procedures for determining the funding method, depending on various factors such as the available life insurance policies or the members' preferences. Overall, the Washington Buy Sell or Stock Purchase Agreement offers a flexible and customizable framework for LLC members to facilitate the smooth transfer of ownership interests. By incorporating the option to fund the purchase through life insurance, this agreement ensures financial stability and security for both buyers and sellers involved in the transaction.
