Is it possible to set up an operation agreement to accommodate all members needs regarding the restriction of the transfer of shares of an LLC?
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Is it possible to set up an operation agreement to accommodate all members needs regarding the restriction of the transfer of shares of an LLC?
We have an LLC with 5 members each having a 20% interest. Now, 4 members want to add a section to the operating agreement that restricts transfer or inheritance of their shares to a designated set of family members. The other member does not want any restrictions on his share.
Asked on June 30, 2014 under Business Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Yes, it is possible to have an operating agreement that is not fully "symmetical"--that is, that treats certain of the owners differently, such as in regards to the transference of their ownership interests. LLC operating agreements are capable of a great deal of flexibility and can be written to allow for restrictions on transferance, to separate economic interest from managerial control, or otherwise to reflect the unique needs or intentions of the members. It is advised that you have an attorney help draft the agreement, to make sure it accomplishes what everyone wants.
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