Guam Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance

State:
Multi-State
Control #:
US-03467BG
Format:
Word; 
Rich Text
Instant download

Description

In the absence of a valid restriction, a member in an LLC may transfer his/her interest in the LLC (usually expressed in membership units) to anyone. Restrictions on the transfer of membership units are valid if they are not unreasonable. This form provides that the LLC has the right to purchase a members membership units upon his death. The LLC can fund this transaction through a life insurance policy on the members life with the proceeds going to the LLC. The proceeds will then be used to buy the deceased members membership units.


A restriction on the right to transfer membership units is not effective against a purchaser of the unit unless the purchaser knows of the restriction. Such a restriction can be conspicuously noted on the membership certificates.


This form is set up as a Buy Sell Agreement between the LLC and a key member. It applies in the case of the death, disability, retirement or offer of member to sell his membership units during his lifetime.


This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance
  • Preview Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance

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FAQ

One common question we receive when discussing key person benefits is ?What is a buy/sell agreement?? A buy/sell agreement, also known as a buyout agreement, is a contract funded by a life insurance policy that can help minimize the turmoil caused by the sudden departure, disability or death of a business owner or ...

One common question we receive when discussing key person benefits is ?What is a buy/sell agreement?? A buy/sell agreement, also known as a buyout agreement, is a contract funded by a life insurance policy that can help minimize the turmoil caused by the sudden departure, disability or death of a business owner or ...

Advantages of using life insurance Life insurance creates a lump sum of cash to fund the buy-sell agreement at death. Life insurance proceeds are usually paid quickly after death, ensuring that the buy-sell transaction can be settled quickly. Life insurance proceeds are generally income-tax free.

Life insurance proceeds provide liquidity for ordinary living expenses and estate tax liability. Buy-sell agreements can be structured under various forms, including 1) entity redemption, 2) cross purchase, 3) cross endorsement, 4) wait-and-see and 5) a one-way agreement.

If you bought a life insurance for yourself ? meaning it pays out upon your death ? you can't deduct life insurance premiums.. The IRS considers life insurance a personal expense and ineligible for tax deductions. Employers paying employees' life insurance premiums can deduct those payments, with some restrictions.

sell agreement provides a plan for the orderly transfer of any owner's business interest. Consider a buysell agreement for your business if: You have two or more owners. You want to provide protection in the event of any owner's termination of employment, retirement, divorce, disability, or death.

Life insurance creates a lump sum of cash to fund the buy-sell agreement at death. Life insurance proceeds are usually paid quickly after death, ensuring that the buy-sell transaction can be settled quickly. Life insurance proceeds are generally income-tax free.

Are buy-sell agreement life insurance premiums deductible? Buy-sell agreement life insurance premiums are generally not tax-deductible unless paid by the business as employee compensation.

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Guam Buy Sell or Stock Purchase Agreement between Individual Members Covering Membership Units in a Limited Liability Company - LLC - with an Option to Fund the Purchase through Life Insurance