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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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I want to sell a portion of my business to an investor to raise

Resolved Question:

I want to sell a portion of my business to an investor to raise some needed capital. What legal documents do I need to do that and can I use something like LawDepot.com to execute them? Basically I am selling 10% of the company, an LLC.

Anything I should keep in mind while doing this?
Submitted: 3 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 3 years ago.

Thank you for your question. Please permit me to assist you with your concerns.

To be frank, this is not quite as complicated as it may appear. You generally need least two documents. First, you would at some point to file with the state a document called 'articles of amendment' which would update the ownership split with the state and add the investor on to the business.

Internally you could simply have a basic agreement denoting terms of the capital infusion, percentage of ownership sold, and terms of partnership (whether he would be a full shareholder or limited, meaning if he would have a voice in running the entity or he would just be an investor). Those forms are for internal use only, not for state use, and you should be able to find templates online for at least the basic outline. Then, once you agree, both sign, date, and notarize, the transfer is complete. Please keep in mind that if you do this, consider creating a means by which either party can elect to sell their interest back, what the terms may be for buy-out or dissolution, and essentially try to think of as many conditions if there is a need to evaluate the company, have parties enter or leave, and what responsibilities of each party would be.

Good luck.

Dimitry K., Esq. and 4 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.
Thanks. That helps a lot!

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