Legal Question in Business Law in Minnesota

Regarding change in ownership in LLC.

Hello,

I have basically two related questions. One is: Once an LLC is established and there is only one owner and one officer. Is it possible to (as long as owner is willing) for the owner to walk away from 100% liability and the company and let the remaining officer become owner? And if not, can the officer just become co-owner with the existing owner? What steps are taken in this situation? and lastly, if the LLC has open credit with a bank, will that bank still honor the extended credit if ownership changes (either by totally new owner or by co-owner scenario) Please advise. Thank you.


Asked on 12/16/07, 12:51 am

2 Answers from Attorneys
David Anderson Anderson Business Law LLC

Re: Regarding change in ownership in LLC.

I would need to read your member operating agreement for the LLC to advise. ALso, if there is a Buy-Sell Agreement in place I would need to review that. FInaally, any loan documents ( incl Personal Guaranty) would be controlling of relationship with bank.

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Answered on 12/16/07, 6:57 am
Chad Johnson Hellmuth & Johnson, PLLC

Re: Regarding change in ownership in LLC.

The answer to both of your questions is "Yes, both are possible." However, with that said, there is no way to know whether you can actually pursue both until your LLC governing documents and the bank credit papers are reviewed by an attorney.

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Answered on 12/16/07, 10:19 am


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