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Printable LLC Share Purchase Agreement Document

The LLC Share Purchase Agreement is a legal document that outlines the terms and conditions under which shares of a Limited Liability Company (LLC) are bought and sold. This agreement serves to protect the interests of both the buyer and the seller, ensuring a smooth transfer of ownership. Understanding its components is essential for anyone involved in the purchase or sale of LLC shares.

Form Sample

LLC Share Purchase Agreement Template

This LLC Share Purchase Agreement (“Agreement”) is made and entered into as of the ___ day of __________, 20__, by and between:

  • Seller: ______________________________________
  • Address: ____________________________________
  • Phone Number: ____________________________
  • Email: ____________________________________

and

  • Buyer: ______________________________________
  • Address: ____________________________________
  • Phone Number: ____________________________
  • Email: ____________________________________

This Agreement shall be governed by the laws of the State of __________.

1. Purchase and Sale of Shares

The Seller agrees to sell, and the Buyer agrees to purchase, ___ (___) shares of membership interest in the LLC known as _____________________, with the following details:

  • Purchase Price: $____________
  • Date of Closing: __________, 20__

2. Representations and Warranties of the Seller

The Seller hereby represents and warrants that:

  • The Seller is the lawful owner of the shares being sold.
  • The Seller has the full power and authority to enter into this Agreement.
  • The shares are free from any liens or encumbrances.

3. Representations and Warranties of the Buyer

The Buyer hereby represents and warrants that:

  • The Buyer has the legal capacity to execute this Agreement.
  • The Buyer has sufficient funds to complete the purchase.

4. Conditions Precedent

The completion of the purchase is subject to the following conditions:

  1. Approval of the purchase by the existing members of the LLC.
  2. Completion of all required documentation.

5. Indemnification

The Seller agrees to indemnify and hold harmless the Buyer from any claims arising from the Seller's breach of this Agreement.

6. Miscellaneous

This Agreement constitutes the entire understanding between the parties. It may only be amended in writing, signed by both parties.

IN WITNESS WHEREOF, the parties hereto have executed this LLC Share Purchase Agreement as of the date first written above.

Seller Signature: ___________________________

Date: _____________________________

Buyer Signature: ___________________________

Date: _____________________________

Misconceptions

Misconceptions about the LLC Share Purchase Agreement can lead to misunderstandings about its purpose and function. Here are seven common misconceptions explained:

  1. All LLCs require a Share Purchase Agreement. Many people believe that every LLC must have this type of agreement. In reality, it is only necessary when shares are being sold or transferred.
  2. Share Purchase Agreements are only for large transactions. Some think these agreements are only relevant for substantial sales. However, they can be beneficial for transactions of any size, providing clarity and protection for both parties.
  3. Once signed, the agreement cannot be changed. There is a belief that a Share Purchase Agreement is set in stone after signing. In fact, parties can amend the agreement if both agree to the changes.
  4. Share Purchase Agreements are the same as operating agreements. Many confuse these two documents. While both are important for LLCs, the Share Purchase Agreement specifically addresses the sale of shares, whereas the operating agreement outlines the management and operational structure of the LLC.
  5. Legal representation is unnecessary. Some individuals think they can draft and sign the agreement without legal help. However, consulting with a legal expert can help ensure that the agreement complies with state laws and protects the interests of all parties involved.
  6. Only the seller needs to sign the agreement. It is a common misconception that only the seller’s signature is required. Both the buyer and seller must sign the agreement for it to be valid.
  7. Share Purchase Agreements are only about price. While price is a significant factor, these agreements often include other important terms, such as payment methods, representations, and warranties, which are crucial for a successful transaction.

Key takeaways

When filling out and using the LLC Share Purchase Agreement form, it is essential to keep several key points in mind. Here are ten takeaways to consider:

  1. Understand the Purpose: This agreement outlines the terms of the sale of shares in an LLC. It protects both the buyer and seller.
  2. Identify the Parties: Clearly state the names and addresses of both the seller and the buyer. This helps avoid confusion.
  3. Define the Shares: Specify the number of shares being sold and any relevant details about the shares themselves.
  4. Purchase Price: Clearly state the total purchase price and how it will be paid. This prevents disputes later on.
  5. Representations and Warranties: Both parties should provide assurances regarding their authority to enter into the agreement. This adds a layer of security.
  6. Conditions Precedent: Outline any conditions that must be met before the sale can proceed. This ensures all parties are on the same page.
  7. Closing Process: Describe how and when the closing will occur. This includes the transfer of shares and payment.
  8. Confidentiality: Consider including a confidentiality clause to protect sensitive information shared during the process.
  9. Governing Law: Specify which state’s laws will govern the agreement. This is important for resolving any disputes.
  10. Seek Legal Advice: It’s wise to consult with a legal professional before finalizing the agreement. They can provide valuable insights.

By keeping these points in mind, you can navigate the process of filling out and using the LLC Share Purchase Agreement with greater confidence and clarity.

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