Legal Question in Business Law in Illinois

If an LLC has 100 units where everyone put in $ 1 each to start and they want to raise an additional $1,000 now from outside investors do they have the following options:
1. 1 member can sell his units to the investor for $ 1,000 but then keep the $ 1,000 for himself and the investor now owns his units with his rights.
2. All members can agree to sell a specific # of each of their units for the $ 1,000 and divide the money according to their # of units.
3. Majority of the unit owners can agree to issue new units which will dilute the old units but will keep the $ 1,000 in the company rather than go to individual members. ie instead of 100 units agree to issue 10 new units for $ 1,000 so there are now 110 units and if you owned 10 of 100 before you had 10% now you have 10 of 110 and have 9.1% and the $ 1,000 stays in the company and the new valuation of the company would be 110 units at $100 unit (the most recent purchase price or $11,000).
4. Can they do a combination of 1, 2 and 3 above ie. can they agree to sell 5 of their units and issue 5 new units and keep half the money for themselves and keep half the money in the company?

Asked on 2/06/11, 8:56 pm

Stephen Messutta

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0 attorneys agreed

Can't say. I'd have to read the operating agreement. If there is no operating agreement, that's a different story.

Answered on 2/07/11, 1:07 pm

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