How does a buy/sell agreement work for an LLC?

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How does a buy/sell agreement work for an LLC?

LLC has 3 members with 32.33% each and all the voting shares and 3 members with 1% each and no voting shares. Can the 3 majority owners force the other 3 to sell out if they are trying to sell the entire company?

Asked on March 28, 2012 under Business Law, North Carolina

Answers:

Steven Fromm / Steven J Fromm & Associates, P.C.

Answered 9 years ago | Contributor

Without a review of the operating agreement this is all idle speculation.  If there is something called a "tag along" provision then the minority shareholders cannot be left out of 3rd party sale.  Take the agreement to a corporate/tax attorney to have it reviewed to get a conclusive answer.

Andrew Howard / Manning & Marder

Answered 9 years ago | Contributor

I agree 100% with the previous answer.  There will likely be a provision in the LLC's Operating Agreement that governs this decision.  It will probably be in a stand-alone section regarding disposition or winding down.  Otherwise, the answer may be contained in the sections regarding managerial decisions.  If the 3 majority owners have 100% of the voting control, and there are no provisions to the contrary, they may be able to vote for a sale of the company to a new owner.

Bradley Miller / Miller Law LLC

Answered 9 years ago | Contributor

From the title of the question, I am assuming there is a buy-sell agreement in place? Or at least part of the operating agreement? If so, then the terms of the buy-sell would apply. Unfortunately, I can't really speak to the specifics of the agreement without actually reading through it.


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