Are you thinking of selling a percentage of your business? Whether you are looking to raise capital or to give up some ownership to a strategic partner, it is important to understand the different steps and considerations involved in such a transaction. In this article, we will guide you through the process of selling a percentage of your business and provide you with resources and tips to make the process smoother.

How to Sell a Percentage of Your Business?

The first step in selling an ownership percentage in an LLC is to obtain the consent of all existing members to the sale. Every member of the LLC must agree to the sale before it can take place. To facilitate this agreement, it is important to understand the value of the LLC and the percentage of ownership being sold.

Once you have the agreement of all existing members, you can begin the process of finding someone who is willing to purchase your interest. This process may involve speaking to other members of the LLC, potential buyers, and lawyers to help with the legal aspects of the sale.

When selling a percentage of your company, there are a few different options available. The most common options include:

  • Sell a Percentage of Your Stock: This option involves selling a certain percentage of your entire company, usually structured as a percentage of your stock. The purchaser will then become a shareholder in your LLC.
  • Sell 100% but Include an Earnout Option: An earnout is a contractual agreement, agreed upon at the time of the sale, that allows the seller to receive additional payments based on the performance of the company after the sale.
  • Sell a Percentage of Your Assets: This option involves selling a certain percentage of your assets, such as equipment, inventory, or intellectual property.

Before beginning the process of selling a percentage of your business, it is important to determine the value of your business so that you can price it appropriately. You may want to consider hiring a business appraiser to help you with this. You should also make a decision as to whether you’d rather sell a percentage of your stock, assets, or both.

Requirements for Selling a Percentage of an LLC

If you are selling a percentage of an LLC, there are certain requirements that must be met. Everyone who has a 20 percent or larger percentage share in your LLC will be required to personally guarantee any business loan your LLC applies for. This means that they will be liable for any debt incurred by the LLC.

It is also important to note that any sale of a percentage of an LLC must be approved by the state. The state may require that certain documents be filed, such as an Operating Agreement, before approval is granted.

Conclusion

Selling a percentage of your business can be a complex process, but it can also be a great way to raise capital or to bring on a strategic partner. Before beginning the process, it is important to understand all of the steps and requirements involved, and to make sure that you are pricing your company appropriately. For more information about selling a business, please visit Atlantabusinesses.com, a great resource for answers to all your questions about selling a business and about business brokers.

Would it be possible for you to part with a portion of your business?

This option involves selling off a portion of the business, typically expressed as a share of the company’s stock. This type of transaction is often referred to as a recapitalization and is commonly used by entrepreneurs who wish to retire gradually.

What is the process for granting someone a portion of your business?

The way to dilute a company’s shares is to issue more of them. If, for example, you have 100 shares and you want to give someone 10%, you would need to release an additional 11 shares, making the total 111 (11/111 x 100 = 10%, approximately).

What is the process for determining the ownership percentage of an LLC?

The total amount of units held by a member in an LLC is referred to as their percentage interest. For example, if an LLC has a total of 100 units and one member is allocated 60 units, then that member owns 60% of the LLC.

Is it possible to transfer ownership of a portion of an LLC?

The simplest way for a current member of an LLC to get rid of their shares is to find a new member who is willing to purchase them, as all the shares of the LLC must be divided amongst all the members.