Transferring ownership interest in a Florida LLC or business entity requires careful planning, adherence to legal agreements, and compliance with state regulations. While permissible under law, Fla. Stat. § 608.432 does state 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. So, the first step when evaluating how to transfer ownership interest should be to review your business entity’s operating agreement. Below we’ll walk through this, and other processes involved in transferring ownership interest in a Florida business entity and why someone may be interested in doing so.
Preparing to Transfer Ownership Interest in an LLC
Business ownership is dynamic, and there may come a time when you need to transfer ownership interest in your Miami LLC. Whether you’re selling part of your business, adding new members, or planning for business succession, understanding the process of transferring ownership interest is essential. Here are some key steps in the process.
- Review the operating agreement – The business’s operating agreement or bylaws should outline the procedures for transferring ownership interest, including any restrictions or approval requirements. It’s essential to follow these guidelines closely, as they are legally binding. The document should also specify if there are any requirements or restrictions governing ownership interest and how to calculate the worth of one’s interest.
- Obtain consent from existing members/shareholders – Most agreements will require consent from other shareholders before proceeding with the transfer. Some agreements require a majority or unanimous vote for approval. Communicate with all relevant parties and ensure compliance with the agreement’s provisions before proceeding with the transfer.
- Determine the value of one’s ownership interest – To facilitate the transfer, you’ll need to determine the value of the ownership interest being transferred. As noted above, this process may be noted in your operating agreement. It’s advisable to consider hiring a professional appraiser or financial expert to assess the fair market value of the ownership interest.
- Draft agreements and file forms – Lastly, 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.
Transferring ownership interest in a Florida business entity involves legal, financial and tax considerations. Be sure to work with experienced professionals before taking steps to transfer interest in a Florida business. Our team at the Law Offices of Alex D. Sirulnik, P.A. will guide you through the process and ensure a smooth transfer of interest and assets. Contact us today with your questions.