What Needs to Be Filed When a LLC Member Resigns?
Ownership in a LLC is generally considered an asset of the individual member. If that member resigns, the terms of the operating agreement may dictate what happens to his or her ownership. The answer will depend on all the facts and circumstances involved, such as whether there is a buy-sell agreement, etc. The operating agreement or buy-sell agreement of the LLC will govern the procedures for sale. A LLC typically has an operating agreement that governs the procedures for a sale of an interest in the business.
It may be necessary to amend the articles of organization/certificate of formation, a buy-sell agreement is often recommended, and there may be notices of meetings, resolutions, DBA filings, promissory notes or other documents required. The operating agreement governs the requirements and processes for your particular LLC when it comes to termination of a membership in the LLC or sale. Typically, a vote of the members will be required to terminate a membership and so a certain percentage of the current LLC members must approve. All termination or buyout requirements set forth in the LLC operating agreement or buy-sell agreement should be met. In some cases, it may be helpful to have an attorney review all the facts and documents involved to ensure all requirements are complied with.
The sale of a business interest, such as in a LLC can be accomplished through a buy-sell agreement. A buy-sell agreement is an agreement between members of a LLC, partners of a partnership or between a shareholder and a corporation whereby the parties agree to the terms and conditions of a future sale of the partners or shareholder's interest. By signing the agreement, the party contractually limits his or her ability to dispose of his or her interest in the partnership or corporation to the terms of the agreement.