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WiseOwl58
WiseOwl58, Attorney
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Currently, I am a 100% owner of a NYS LLC, and I am in process

Customer Question

Currently, I am a 100% owner of a NYS LLC, and I am in process of selling it (100% ownership) to a friend of mine. I'd like to know how to handle paperworks in handling this. In particular, how do we get "Articles of Organization" that shows the buyer's name as new owner (main member)? The bank that my company uses requires it as does the credit card processing company. I thank you in advance for your help.
Submitted: 1 year ago.
Category: Business Law
Expert:  WiseOwl58 replied 1 year ago.

. iIT WOULD NOT APPEAR I. THE ARTICLES.

 

nstead it would show up in a statement of instead it would show up in a statement of information where where you list the members of the LLC along with the members and dand officers

Expert:  WiseOwl58 replied 1 year ago.
Hey, Myung:

Sorry my last answer got messed up on this system.

The Articles of Organization don't name the members who are the owners of the LLC. What you would show the bank is the membership interest purchase agreement, whereby your friend acquired the membership interest from you and owns 100%.

You should also file an amendment to your biennial statement that gives additional information about the LLC. You can do it online during business hours.

Here is the information:

http://www.dos.ny.gov/corps/llcfaq.asp

Please rate the answer 3, 4 or 5 and close out the question. Thanks a lot.
Expert:  WiseOwl58 replied 1 year ago.
Myung:

Please review the answer I have provided and rate it 3, 4 or 5.

Please let me know if you have any other questions. Just put my name---Wise Owl 58--- in the first line and I will get it and respond.

All the best.
Customer: replied 1 year ago.

Wise Owl 58


 


Where can I download the form for membership interest purchase agreement?


 


Thank you.


 


myung park

Expert:  WiseOwl58 replied 1 year ago.
Please rate the answer 3, 4 or 5 since I have now answered two separate questions for you. Need to complete the question and close it out.

Here is what the membership interest purchase agreement would look like:

40.10.39: Membership Interest Grant Agreement

DRAFT

MEMBERSHIP INTEREST GRANT AGREEMENT

[COMPANY], LLC

This MEMBERSHIP INTEREST GRANT AGREEMENT is dated as of mm/dd/yy (the "Effective Date"), between [COMPANY], LLC (the "Company") and [GRANTEE] (the "Grantee").Â

Certain capitalized terms used in this Agreement are defined in the [COMPANY] Limited Liability Company Agreement and Annex I hereto.

Section 1. Issuance of Membership Interest.

(a)Â Subject to the limitations contained herein, (i) [COMPANY] is issuing to the Grantee on the Effective Date hereof a 15% membership interest in [COMPANY].Â

(b) Membership. [COMPANY] and the Grantee intend that the membership interest be treated as a "profits interest" as defined in Revenue Procedure 2001-43 and Revenue Procedure 93-27 for United States federal income tax purposes. In accordance with the treatment of the membership interest as "profits interests," [COMPANY] and the Grantee acknowledge and agree that the Grantee shall have no right or claim to the existing capital of [COMPANY] and shall not be required or permitted to contribute capital to [COMPANY]. [COMPANY] and the Grantee further agree that the fair market value of the assets of [COMPANY] as of the Effective Date is zero.

Section 2. Representations, Warranties and Acknowledgments.

The Grantee acknowledges and agrees that the Grantee has consulted with his professional, tax and legal advisors with respect to the federal, state, local and foreign income tax consequences of the Grantee's status as a partner of [COMPANY] for tax purposes.Â

Section 3. Special Tax Elections

(a) Section 83(b) Elections. The Grantee shall make an election under Section 83(b) of the Code with respect to the Membership Interest. Such election must be filed with the Internal Revenue Service within thirty (30) days after the Effective Date. THE FORM FOR MAKING THIS ELECTION ARE ATTACHED AS EXHIBIT A HERETO. THE GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THESE FILINGS WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD MAY RESULT IN ADVERSE FEDERAL INCOME TAX CONSEQUENCES TO THE GRANTEE.

(b) FILING RESPONSIBILITY. THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE'S SOLE RESPONSIBILITY, AND NOT THE RESPONSIBILITY OF [COMPANY] TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF THE GRANTEE REQUESTS [COMPANY] OR THEIR REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.

Section 4. General Provisions.

(a) Notices. Any notice required to be given under this Agreement shall be in writing and shall be deemed effective if delivered in accordance with the Partnership Agreements.

(b) Amendment; Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective unless such modification, amendment or waiver is approved in writing by each of the parties hereto. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

(c) Conflicting Agreements. The Grantee shall not enter into any partnership agreements or arrangements of any kind with any person, other than [COMPANY] and/or their designees, with respect to the Membership Interest, on terms inconsistent with the provisions of this Agreement or the Partnership Agreements (whether or not such agreements or arrangements are with other partners in [COMPANY] or with persons that are not parties to this Agreement or the Partnership Agreements), including agreements or arrangements with respect to the acquisition or disposition of either of the Membership Interest in a manner which is inconsistent with this Agreement or either of the Partnership Agreements.Â

(d) The Grantee acknowledges and agrees that he shall not disclose any information contained herein, including, without limitation, the existence of this Agreement and the terms contained herein, and that such information shall remain confidential to all parties hereto and shall not be disclosed to any third party with the exception of the parties' financial and legal advisors.Â

(e)Â The parties agree and acknowledge that the existence of this Agreement and the terms contained herein are made in reliance upon the covenants contained in this Section 4.

Section 5. Miscellaneous Provisions.

(a) Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.Â

(b) Entire Agreement. This Agreement and the other agreements referred to herein or therein contain the entire agreement among the parties hereto with respect to the subject matter hereof and supersede and preempt any and all prior arrangements, agreements and understandings with respect thereto.

(c) Counterparts; Facsimiles. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement. Facsimile counterpart signatures to this Agreement shall be acceptable and binding.

(d) Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon [COMPANY] and their successors and assigns and upon the Grantee, and the legal representatives, heirs and legatees of the Grantee's estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms hereof. No person not a party hereto shall be a third party beneficiary hereof.

(e) Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

(f) GOVERNING LAW. THE PROVISIONS OF THIS GRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(g) Consent to Jurisdiction. Any action or proceeding against the parties relating in any way to this Agreement may be brought and enforced in the Supreme Court of the State of New York for New York County and/or the United States District Court for the Southern District of New York, to the extent subject matter jurisdiction exists therefor, and the parties irrevocably submit to the jurisdiction of both such courts in respect of any such action or proceeding. The parties irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in the courts of the State of New York and any claim that any such action or proceeding brought in any such court has been brought in any inconvenient forum. Any judgment may be entered in any court having jurisdiction thereof.

(h) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS, HIS OR HER RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GRANT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF.Â

(i) Consenting Parties. This Agreement shall not be effective or binding upon either of [COMPANY] unless and until consented to in writing by all of the partners of both Partnerships.

[the remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties have executed this Membership interest Grant Agreement on the day and year first indicated above.

By: _______
[GRANTEE]

By: _______
[WITNESS]

Exhibit A

SECTION 83(b) TAX ELECTION

The undersigned hereby elects pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder.

(1) The name, address and taxpayer identification number of the taxpayer who performed the services is:

Name: [GRANTEE]
Address: ________________

Social Security No.:Â ________________

(2) The property with respect to which the election is being made is a one fifteen-percent (115%) profits interest in [COMPANY], LLC (the "[COMPANY] Company").

(3) The property was transferred on [DATE].

(4) The taxable year to which the election relates is the calendar year [YEAR].

(5) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of the property with respect to which this election is being made is $0.

(6) The amount paid for such property is $0.

(7) A copy of this statement was furnished to [COMPANY] the Company.

(9) This statement is executed on [DATE].

Name:Â

This election must be filed with the Internal Revenue Service Center with which the taxpayer files his or her Federal income tax returns and must be made within thirty (30) days after the execution date of the Membership interest Grant Agreement. This filing should be made by registered or certified mail, return receipt requested. The Grantee must retain two (2) copies of the completed form for filing with his or her Federal and state tax returns for the current tax year and an additional copy for his or her records.

ANNEX I

DEFINED TERMS

The following definitions shall be in effect under the Agreement:

"Cause" shall mean (i) a commission by the Grantee of any act with respect to [COMPANY] that constitutes fraud, embezzlement, misappropriation, theft, or material dishonesty; or (ii) conviction of any felony.

"Code" shall mean the Internal Revenue Code of 1986, as amended.Â

"Limited Liability Agreement" shall mean (i) the Limited Liability Company Agreement of [COMPANY], L.P. dated as of [DATE], as it may be amended, supplemented and/or restated from time to time;.

"Membership Interest" shall mean the membership interest in [COMPANY] issued to the Grantee pursuant to Section 1(a) hereof.

"Qualifying Transaction" shall mean any sale of all or substantially all of the Membership Interest in [COMPANY].

"Termination" shall mean a termination of the Grantee's employment relationship with [COMPANY] for any reason, whether by [COMPANY] or the Grantee, and whether with or without Cause.

Expert:  WiseOwl58 replied 1 year ago.

Attention Myung Park:

Please help me understand why you have given me a poor service rating ans what I can do to correct it. I gave you the agreement that you.wanted.

Expert:  WiseOwl58 replied 1 year ago.
You should.really correct.this rating to a.3, 4 or 5, Myung Park.
Expert:  WiseOwl58 replied 1 year ago.

Attention Myung Park:

 

 

Please help me understand why you have given me a poor service rating and what I can do to correct it. I gave you the agreement that you.wanted.

 

I request that you revise the rating to a 3, 4 or 5. Otherwise I get no credit for the work I have done and the answers I have provided you.

 

Hopefully you will acknowledge the answers I gave you and the useful agreement that you can use.

 

Thank you.

Expert:  WiseOwl58 replied 1 year ago.
Myung:

Please review the answer I have provided and rate it 3, 4 or 5.

Please let me know if you have any other questions. Just put my name---Wise Owl 58--- in the first line and I will get it and respond.

All the best.
Expert:  WiseOwl58 replied 1 year ago.
Attention Myung Park:

Please help me understand why you have given me a poor service rating and what I can do to correct it. I gave you the agreement that you.wanted.

I request that you revise the rating to a 3, 4 or 5. Otherwise I get no credit for the work I have done and the answers I have provided you.

Hopefully you will acknowledge the answers I gave you and the useful agreement that you can use.

Thank you.
Expert:  WiseOwl58 replied 1 year ago.
Please correct the rating this is a pay for you cite you got the service and I would see if you don't want to pay for it I think you should give a 34 or 5
Expert:  WiseOwl58 replied 1 year ago.
Attention Myung Park:

Please help me understand why you have given me a poor service rating and what I can do to correct it. I gave you the agreement that you.wanted.

I request that you revise the rating to a 3, 4 or 5. Otherwise I get no credit for the work I have done and the answers I have provided you.

Hopefully you will acknowledge the answers I gave you and the useful agreement that you can use.

Thank you.

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