Legal Question in Business Law in Nevada
Protecting Member Units in an LLC from member legal action
Joe and Sam partner 50/50 in an LLC.
Each partner is given 50% of the member units.
Each member invest $5,000 cash in exchange for member units.
5 years later the LLC is profitable.
Sam's wife divorces Sam.
How can the LLC be protected from Sam's wife from acquiring 50% of Sam's 50% Memeber Units or 25% of the total member units? Can a predefined dollar figure be assigned to the unit? Can an agreement be made in advance to instruct the potentially sued party to sell off the units back to the LLC? At what value? The current estimated value or the value of the initial investment?
Does the answer you supply apply to any legal action against a member that has units?
Thank You
1 Answer from Attorneys
Re: Protecting Member Units in an LLC from member legal action
The first part of you question is really more of a divorce issue. As to the rest, a good operating agreement and buy-sell agreement should address these concerns.
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