A business owner’s membership interest in their LLC may be transferred to another individual per Florida law. The first stop when evaluating the process, however, should be the LLC’s operating agreement. Below we’ll discuss why someone may be interested in transferring interest in their business entity and the steps you should take if you choose to do so.
Reasons for Transferring Business Entity Ownership in Florida
There are many reasons an owner-member may choose to transfer their interest in the LLC to another individual. Some of the most common include:
- Personal or family reasons – perhaps a member passes away, becomes severely ill, disabled or gets divorced.
- Financial reasons – they may choose for personal or financial reasons to alter their investment strategy
- Retirement – a member may reach the end of their career or choose to leave the business for another reason.
What Does the Operating Agreement Say?
Regardless of the reason or motivation, before you can transfer interest in an LLC, you must read through the member’s operating agreement. The document should thoroughly outline the process for transferring one’s interest. It should also specify if there are any requirements or restrictions governing ownership interest and how to calculate the worth of one’s interest.
Florida Statute 608.432 states that a member of an LLC cannot transfer interest unless permitted in the operating agreement, or a majority of the non-assigning owners agrees to the transfer.
If the transfer is approved, the paperwork can begin. You should work closely with a business law attorney to help you draft forms and ensure your interests are protected during the process. Your attorney will prepare the Membership Interest Transfer Agreement or Membership Interest Purchase Agreement on your company’s behalf and will be certain it addresses all agreements and information critical to the transfer of ownership interest.
Before taking steps to transfer interest in a Florida business, get in touch with our team at the Law Offices of Alex D. Sirulnik, P.A. We will guide you through the process and ensure a smooth transfer of interest and assets.