Which form transfers LLC ownership between members?
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In the context of an LLC—particularly one jointly owned by a divorcing couple without a formal operating agreement restricting transfers—the most appropriate legal instrument for transferring membership interest or rights tied to equity (such as stock options) would typically be a Membership Interest Assignment Agreement or Assignment of LLC Interest.
Although LLCs do not technically issue "stock" like corporations, members can assign their economic interest or transfer units of ownership, which may include future profit rights or voting rights depending on how the interest is structured. In an amicable divorce, such a transfer may also be documented as part of a broader marital settlement agreement, particularly if the LLC interest is part of the community property division.
The assignment form should clearly identify the transferor and transferee, specify the percentage or units being transferred, include a reference to the LLC’s name and jurisdiction, and state whether the transfer includes management rights or is limited to financial interest.
Once signed, the LLC should update its internal records and, if applicable, file an amendment with the state business registry (such as the Secretary of State) if the public ownership structure has changed.
Additionally, if the LLC has elected corporate tax treatment or maintains an equity incentive plan, IRS filings or updates to any Section 83(b) elections or capital account records may be necessary.
It is strongly advisable that both parties execute a written waiver or acknowledgment that the transfer complies with any applicable state divorce property laws and that the transferor relinquishes all claim to future appreciation or voting power associated with the interest.
To avoid disputes down the line, the document should also include a representation that the LLC’s remaining members, if any, consent to the transfer, especially if required by default rules under the LLC Act of the state of formation.
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What form is recommended for an LLC member to sign over his stock options to another member?
I understand you're looking to transfer stock options in an LLC. Could you please confirm if both members have agreed on the terms of this transfer?
They have.
Are there any specific restrictions or provisions regarding stock option transfers outlined in the LLC's operating agreement?
No.
Is there anything else the Corporate Lawyer should know before I connect you?
it was a form done online by a husband and wife, both 50% owners. They are amicably divorcing
Good afternoon and welcome to AskaLawyer. Please give me a moment to review your question.
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In the context of an LLC—particularly one jointly owned by a divorcing couple without a formal operating agreement restricting transfers—the most appropriate legal instrument for transferring membership interest or rights tied to equity (such as stock options) would typically be a Membership Interest Assignment Agreement or Assignment of LLC Interest.
Although LLCs do not technically issue "stock" like corporations, members can assign their economic interest or transfer units of ownership, which may include future profit rights or voting rights depending on how the interest is structured. In an amicable divorce, such a transfer may also be documented as part of a broader marital settlement agreement, particularly if the LLC interest is part of the community property division.
The assignment form should clearly identify the transferor and transferee, specify the percentage or units being transferred, include a reference to the LLC’s name and jurisdiction, and state whether the transfer includes management rights or is limited to financial interest.
Once signed, the LLC should update its internal records and, if applicable, file an amendment with the state business registry (such as the Secretary of State) if the public ownership structure has changed.
Additionally, if the LLC has elected corporate tax treatment or maintains an equity incentive plan, IRS filings or updates to any Section 83(b) elections or capital account records may be necessary.
It is strongly advisable that both parties execute a written waiver or acknowledgment that the transfer complies with any applicable state divorce property laws and that the transferor relinquishes all claim to future appreciation or voting power associated with the interest.
To avoid disputes down the line, the document should also include a representation that the LLC’s remaining members, if any, consent to the transfer, especially if required by default rules under the LLC Act of the state of formation.
Does that make sense?
Yes, their accountant told them that the husband needed to sign over his interest in the company to her being a sole owner. What form is needed to accomplish this?
There is no standard "form" my friend - this is a governance document which is typically prepared by one's counsel; If you're looking for help preparing something just let me know and I can provide a proposal for this Legal work. Happy to help.
That would be amazing, thank you.
