How to Purchase an LLC

You can purchase a Limited Liability Corporation, or LLC, in one of two ways. If you want to continue the LLC structure, you can set up a new LLC that purchases the assets of the existing LLC. Alternatively, you can buy the existing LLC outright, sometimes called a bulk purchase.

Buying the Assets of an Existing LLC

To maintain the LLC structure, without assuming responsibility for the existing LLCs liabilities, you can set up a new LLC and have it purchase the existing LLC's assets.

Even though you're not assuming ownership of the LLC itself, you'll need to see its operating agreement. Unless the operating agreement clearly allows its management to sell the assets without the written concurrence of its members, you'll need that assurance from every member in writing. Alternatively, ask the LLC management to have the members of the LLC revise the operating agreement so that it gives LLC's management the authority to sell its assets

Your buyout agreement with the LLC should state clearly that whatever assets you're purchasing are free from any encumbrances. You may want to consult your attorney about the inclusion of related clauses that hold the former LLC members responsible for any subsequent claims against the assets. You'll also need to check with your county's records office to see if any liens have been filed against the LLC . A Nolo article on what to investigate when buying a business notes that if creditors have filed UCC-1 forms -- state forms that give notice of a creditor's property interest in the LLC's assets -- they can seize those assets even after you've purchased them from the LLC.

Once you've come to an informal agreement for the sale of assets and have determined there are no legal impediments, have your attorney draw up an appropriate purchase document.

Buying the LLC Outright

If you're interested in acquiring an ongoing business organized as an LLC, you may need to buy the LLC itself rather than its assets. In addition to determining the legal and financial status of the business, you'll also need the written agreement of every LLC member. You'll usually have your attorney provide amendments to the LLC's existing operating agreement clarifying the conditions of sale. Optionally, you may also require the existing LLC's members to assume written financial responsibility for any LLC liabilities that are not listed in the purchase agreement.

If the LLC has creditors, it's prudent to get their written agreement to the sale, which acknowledges their willingness to continue the debtor/creditor relationship on its present terms; without it, they may call in lines of credit or cancel ongoing purchase agreements.

Filing Responsibilities

Transfers of real assets in either of these purchase methods require appropriate filings of ownership changes with the county assessor's office. If you're buying the LLC outright, in some states you'll need to notify your Secretary of State of the change in ownership, usually by filing the amended operating agreement that includes the names of new officers and managers, as well as the name and contact information of the registered agent for service. Your business attorney can help you with these filing requirements, which differ from state to state.