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An LLC purchase agreement is a contract for selling membership interest. It names the seller, buyer and company, the share sold, the price and the closing date. This template is needed by LLC members selling all or part of their stake.
On this page you can build the agreement online or download it as a PDF or Word file. Below the form you will find what the agreement covers, a step-by-step guide to every blank, and the paperwork that usually comes with the sale.
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An LLC membership purchase agreement is the contract a member signs to sell their ownership interest in a limited liability company. The agreement comes into play when a member leaves the company, whether the departure is voluntary or forced. The same document is also called an LLC share purchase agreement, an LLC share transfer agreement or a membership interest purchase agreement.
Every agreement of this kind records the same basic points:
In practice, the document records the sale of a membership interest for an agreed price and passes that interest to a new person or company. The FormsPal template is one of our purchase agreement templates, written for the owners of an LLC rather than the shareholders of a corporation.
A membership interest is an owner's stake in an LLC, while stock is an owner's stake in a corporation. In a corporation, the same idea is called a stock purchase agreement. An LLC usually sets out how a stake changes hands in its own operating agreement, so a sale starts with reading that document.
You need an LLC membership purchase agreement whenever a member hands all or part of a membership interest to another person or company for payment. A transfer without payment, such as a gift, fits an assignment better, since there is no price to set out.
Common reasons for a sale include:
Sellers range from a founder who is retiring to an investor who is moving on, and buyers are just as varied. A common pattern is one member buying out another, though an outsider can buy as well. Each side has its own goals, and the purchase agreement should reflect both.
A purchase agreement sets out the whole sale of a membership interest, while an assignment only records that the interest moved and a bill of sale records the sale of a physical item. The table shows which document fits which job.
| Document | What it does | When it fits |
|---|---|---|
| LLC membership purchase agreement | Sets the price, the share sold, the closing date and any conditions | A member sells all or part of a stake for payment |
| Assignment of membership interest | Records that the interest passed from one owner to another | At closing, next to the purchase agreement, or for a transfer with no price, such as a gift |
| Stock purchase agreement | Sells shares of a corporation | The company is a corporation, not an LLC |
| Bill of sale | Records the sale of a physical item, such as a car or equipment | The item sold is property, not a stake in a company |
An LLC Membership Interest Assignment is a simpler document primarily used to record the transfer. An LLC Membership Purchase Agreement, however, is a formal contract that outlines the full terms and conditions of the sale. Many sales use both: the purchase agreement first, then a short assignment signed at closing.
An LLC membership interest purchase agreement includes the parties, the company, the share sold, the price and how it is paid, the seller's promises, any conditions and the closing date. Each part answers a question the other side would otherwise ask later.
Planning the sale of a membership interest means settling the value, the payment and who in the company needs to know before anyone drafts the agreement. Early planning keeps the final contract short, because most of the answers are already written down.
Owners who are selling often write a short plan for the handover, such as who answers questions from customers and who takes over the daily work after closing. A page of notes is enough, and it gives the incoming member a calm start.
To fill out the LLC purchase agreement template, enter the date and the parties, describe the seller's stake, choose all or part of it, then add the price, the percent purchased, the closing date, any contingencies and the signatures. If you downloaded the PDF, you can complete it with the online PDF editor or any PDF software, or print it and write by hand.
The screenshots under each step show the FormsPal LLC Purchase Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Agree on the percentage and the price with the other side before you fill in the form. The percentage appears in more than one place on the form, so keep the data the same each time.
Example: a seller who owns forty percent of Maple Street LLC sells half of that stake. The WITNESSETH blank reads forty percent, Section 1 has the portion box checked with twenty percent, and Section 4(e) also reads twenty percent.
Signing and closing an LLC membership sale runs in four steps: read the operating agreement, agree the terms, sign the purchase agreement, then complete the closing paperwork. Some steps come before you fill in the form and some come after, so keep notes as you go.
At the formation of an LLC, an operating agreement is usually established to provide a roadmap for the company’s operations. Its transfer clause, if it has one, sets out how a member may sell, whether the other members get the first chance to buy and whether they vote on a new member. Sometimes the operating agreement needs an amendment to admit the buyer as a member. A buyer who is not admitted may hold only the money side of the stake, such as a share of distributions, with no vote or role in management; the operating agreement, or the LLC statute where the company was formed when it is silent, decides which.
The buyer and seller agree on the price, the share sold, the payment plan and the closing date. The sale price can affect every member of the LLC, so the other members often take part in the talks. If the operating agreement has a buy-sell provision, follow the price formula or steps it gives.
Each party signs the BUYER or SELLER block, prints a name and adds a title. When a company is the buyer or seller, the person with authority to act for it signs on the By line.
On the closing date, the buyer pays the price and the seller hands over the interest. The paperwork that often goes with a closing includes:
This page lists no state rules for selling an LLC interest, because our sources hold none for this document. A business lawyer where the company is organized can confirm what applies to your sale.
Most mistakes in an LLC purchase agreement are small ones: a name that does not match, a blank left open or a percentage that changes from one part of the form to the next. A slow read-through before signing catches most of them.
The percent now owned, the percent being sold in Section 1 and the percent in Section 4(e) should fit together. Compare all three before you sign.
After you sign the agreement, give each side and the company a copy, store the original with the company papers and keep proof of payment beside it. These habits keep the paperwork easy to find if anyone asks about the sale later.
Sellers and buyers tend to ask the same few questions before they sign an LLC membership purchase agreement. Here are short, plain answers based on how the template works.
Yes. The form has a box for the whole stake and a box for a portion. Section 1 lets you check all membership interests or a portion, and a portion needs a percent. Section 4(e) then repeats the percent being purchased.
Yes, an LLC share transfer agreement is another name for the same contract when it sells the stake for a price. If no price is paid, an assignment of membership interest is the simpler fit.
A bill of sale is built for physical items, so for a share of an Oregon LLC this purchase agreement is the better fit. Enter Oregon as the state where the company is organized in the WITNESSETH section, and read the company’s operating agreement before you sign.
Look in the operating agreement for a transfer or buy-sell clause: when it has one, it sets whether the other members approve the sale and how. When it has none, the default rules come from the LLC statute where the company was formed, so read that statute or ask a lawyer before closing. If the form’s Section 6(c) applies, check Other and write that approval in as a condition.
Yes. Answer a few questions to build the document online, or download the PDF or Word file and fill it in yourself. Any PDF software that lets you type into the fields will work, and so will a printout and a pen.
FormsPal has templates for related contracts and paperwork, such as a membership certificate and a buyout agreement form. These templates cover paperwork that often comes before or after a sale.
A lawyer can read the operating agreement and your draft side by side. That helps most when the sale is large or the operating agreement has unusual wording.
General information, not legal or tax advice.
