Virginia Sale and Assignment of a Percentage Ownership Interest in a Limited Liability Company

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A limited liability company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.


A membership interest may be used to refer to the ownership interest of a member in the LLC. The word unit is often used to reflect the membership interests of a member in the LLC. Some LLC's issue membership interest certificates. To become a new member of the LLC the consent of majority of the members is necessary. A transfer of units of an existing member does not automatically include membership into the LLC.

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FAQ

Risks of an LLC Loss of Limited Liability. Although an LLC enjoys limited liability, poor practices could result in an LLC losing its liability shield. ... Difficulty Obtaining Investors. ... Pass-Through Taxation.

Disadvantages of an LLC Liability limited by business assets. The ability of the business to remain in existence if a shareholder departments. The creation of a centralized management structure. Flexible asset transfer.

7 Steps for Transferring LLC Ownership Decide Whether It's a Partial and Full Transfer of LLC Ownership. ... Review Your Operating Agreement and Articles of Organization. ... Negotiate With Your Buyer. ... Draft a Buy-Sell Agreement with the New Buyer. ... Record the Ownership Change. ... Update the Necessary Documents. ... Notify Relevant Parties.

An LLC's simple and adaptable business structure is perfect for many small businesses. While both corporations and LLCs offer their owners limited personal liability, owners of an LLC can also take advantage of LLC tax benefits, management flexibility, and minimal recordkeeping and reporting requirements.

Disadvantages of creating an LLC Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee. ... Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

A. Unless otherwise provided in the articles of organization or an operating agreement, a membership interest in a limited liability company is assignable in whole or in part.

A membership interest in a limited liability company is personal property. The only transferable interest of a member in the limited liability company is the member's share of the profits and losses of the limited liability company and the member's right to receive distributions.

Pros and Cons of LLC (Limited Liability Corporations) You have the flexibility of being taxed as a sole proprietor, partnership, S corporation or C corporation. As an LLC member, you cannot pay yourself wages. High renewal fees or publication requirements can be pricey, depending on your state.

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Virginia Sale and Assignment of a Percentage Ownership Interest in a Limited Liability Company