Transferring business ownership interests is a significant decision that requires careful planning and adherence to legal agreements and state regulations. Whether you’re selling your shares, bringing in a new partner or passing the business down through succession planning, the process must be executed correctly to avoid legal and financial complications. Here’s what to know as you prepare to make changes to your ownership structure.

Understanding the Basics of Ownership Transfer

Ownership interest in a Florida business can be transferred in several ways, including through a sale, gift or inheritance. However, the process varies depending on the business structure (i.e., whether it’s a sole proprietorship, partnership, corporation or limited liability company (LLC)). 

In Florida, LLC ownership transfers are subject to specific rules outlined in the business’s operating agreement and governed by Fla. Stat. § 608.432.

What to Expect When Transferring Ownership Interest in Florida

If you’re planning to shift ownership shares, it’s prudent to understand these steps:

  1. Review the operating agreement or bylaws – The first step in any ownership transfer is to review the business’s governing documents. An LLC’s operating agreement or a corporation’s bylaws should outline the procedures, restrictions and approval requirements for transferring ownership interest. If no provisions exist, Florida law requires that a majority of the non-assigning owners agree to the transfer.
  • Obtain consent from existing owners – Most business agreements require consent from other shareholders before proceeding with the transfer. The required level of consent should be clearly stated in the operating agreement. 
  • Determine the value of ownership interest – Before transferring ownership, it’s essential to establish the fair market value of the interest being transferred. Some operating agreements include predetermined valuation methods, but it’s often advisable to consult a professional appraiser or financial expert to ensure an accurate assessment. 
  • Draft legal agreements and file necessary forms – Ownership transfers require formal documentation. A business law attorney can help draft the appropriate legal documents to ensure that all terms are properly addressed and legally binding. 

In addition to these steps, it’s also imperative to keep in mind that transferring ownership can have significant legal, financial and tax implications. Surround yourself with experienced professionals to proactively address potential issues and pave the way for a seamless transition. 

Contact Us at Sirulnik Law and ADS Title Services, Inc. 

If you’re considering transferring ownership in a Florida business, call our team at the Law Offices of Alex D. Sirulnik, P.A. today. We will guide you through the process and ensure a smooth transfer of interest and assets. Contact us today with your questions.