How does an LLC go about acquiring another LLC.

UPDATED: Oct 1, 2022

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How does an LLC go about acquiring another LLC.

Hello, how are you? Hope all is well with you
and yours. Thank you for taking the time to
answer my question. Heres the situation. I am
a new business owner of an LLC. I would like
to acquire another LLC and make that LLC a
subsidiary of my own. My LLC is a holding
company that is now acting as merchandising
business. We would like to eventually
incorporate. And the LLC we want to acquire is
sole proprietorship owned by a licensed LVN
who does in home health care. How do I go
about acquiring this company legally and
turning it into a subsidiary of my own.

Asked on May 24, 2018 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You need to double check your facts: if the "LLC we want to acquire is sole proprietorship," then it is not an LLC: an LLC or limited liability company, even a single member (owner) LLC, is completely different and sepaarte from a sole proprietorship. An LLC is its own business entity--it's own legal "person," if you would--while a sole proprietorship has no independent existence and is the owner.
If this is an LLC, the owners (called members) can simpy sell it to you for an agreed-upon price: all you need is a contract that for $X they are selling you Whatever-the-Name LLC. It's that simple; and when you buy the LLC, you will own everything it owns. (It's a good idea to include an inventory of what it owns--and therefore what you are getting--as part of the contract to avoid a later disagreement.) Your LLC can be the buyer. Your LLC can then either run the acquired LLC or take what it wants from it and shut down the LLC itself. 
If it is a sole proprietorship, you need the sole proprietor to enter into a contract to sell you all of his or her business assets (e.g. all of the equipment, money in the bank, supplies, accounts receivable, business name, etc.) and to transfer to you ("assign") any of the contracts or leases you want to take over. Since there is no overall business structure to buy, you will need to list each thing you are buying or which is being transferred to you (or your LLC; whomever is purchasing) separately, to make sure it is acquired.
In either event, a contract is what you need, but the big distinction is that in one case (LLC) you get a business structure or entity and everything it owns; in the other, you are buying each thing you want separately.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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