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A Texas individual purchased all the memberhip interest of an LLC formed in Texas. The LLC being purchased was acquired on 4/1/16. Upon the purchase of the name and membership interest it was found that the LLC had forfeited its right to do business for failure to file taxes. The forfeit was on 2/21/14 but was unknown to the buyers until after the transaction. Is the sell valid? is it null and void? the total is $650,000
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Without looking at the contract, I would say it depends.
It depends if the LLC was an integral part of the contract, and that the purchasers intent to continue operating was part of the contract. The seller typically warrants that the entity is current with tax filings, licenses, etc. Failure of those terms is a breach, and the contract could be unwound, or be voidable, or honored with damages.
As an example, perhaps the purchaser just wanted assets. The LLC tax status might not matter at all, and the contract honored.
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