Key Takeaways

  • Yes, you can sell your LLC, either fully or partially.
  • You must find a buyer and agree on a valuation; this often requires professional assistance.
  • An operating agreement or buy-sell agreement is crucial to guide the process and prevent disputes.
  • Ownership transfers may trigger legal or tax implications—consulting a lawyer is strongly advised.
  • Proper planning, documentation, and due diligence can streamline the sale and avoid involuntary dissolution.

If wondering, “can you sell an LLC,” the answer is yes. However, remember that in order to sell your LLC, you need an actual buyer – and you need to agree on the sale price. Therefore, you might need a professional who can help value your business. Keep in mind that a buyer might not want to purchase the entire LLC, and might only want to purchase a part of it, i.e., the LLC assets. There are some implications when it comes to selling your LLC, including financial, legal, and tax issues, therefore, it is best to hire a lawyer who can assist you in the process.

It is best to plan ahead to ensure that you stay ahead of any issues that could arise during the process of the sale. It is also important to include buy-sell provisions in your operating agreement, as those provisions are legally binding and can assist in the event that a legal dispute arises between you and the seller.

Transferring Ownership of Your LLC

Several LLCs transfer ownership at some point during their lifetime.

The transfer of ownership can happen for many reasons, including the following:

  • A member wants to leave the company
  • A member dies or becomes disabled
  • A member divorces, i.e., if a wife was a member, and the husband wins membership rights in the divorce decree
  • The member(s) choose to sell the entire business

The procedure for selling your LLC will depend on whether you are planning to transfer the entire LLC over to another, or if you are transferring partial rights to another, i.e., new member joining the LLC or a member purchasing the membership rights from only one member of an LLC.

The members of an LLC are also referred to as the owners. Each member owns a piece of the LLC, and the percentage in which each member owns depends on a couple of things: the capital contribution provided by the member, or the percentage agreed upon in the LLC Operating Agreement.

This agreement will help you through the process of an LLC interest transfer. Since the operating agreement is a legally binding agreement, it can be used to identify the procedures for transferring ownership in your business (buy-sell provision).

Preparing Your LLC for Sale

Before initiating the sale, it’s vital to prepare your LLC properly. This includes:

  • Ensuring Accurate Financials: Organize your financial records including profit and loss statements, balance sheets, and tax returns for at least the past 3 years.
  • Reviewing Legal Documents: Make sure your LLC is in good standing with the state. Update operating agreements, licensing, and permits.
  • Valuing Your Business: Hire a valuation expert to determine a realistic market value. Buyers will often scrutinize this number.
  • Minimizing Debts: Clear up or reduce existing liabilities. Buyers are more attracted to businesses with clean financials.
  • Structuring for Transfer: Confirm that your LLC’s operating agreement allows for transfer, and update it if needed.

This preparation demonstrates professionalism and can speed up the due diligence process when you find a buyer.

How to Find a Buyer and Market Your LLC

Once your LLC is ready for sale, the next step is finding the right buyer. You can:

  • Work with Business Brokers: They help list, market, and negotiate deals on your behalf.
  • Use Online Marketplaces: Sites like BizBuySell and others allow you to advertise your LLC to interested buyers.
  • Leverage Your Network: Inform industry contacts, vendors, or competitors who might have interest in your business.
  • Maintain Confidentiality: When listing your business, ensure buyer inquiries are vetted and NDAs are in place to protect sensitive information.

Providing clear, appealing marketing materials—like an executive summary or prospectus—can help attract serious buyers.

Due Diligence and Buyer Evaluation

Once a potential buyer expresses interest, due diligence begins. Be prepared to provide:

  • Business contracts (leases, client agreements, etc.)
  • Employee details and payroll info
  • Intellectual property records
  • Business tax filings

At the same time, you should evaluate the buyer’s financial qualifications and intent. Make sure they can follow through with the purchase and will maintain your business’s integrity if that’s important to you.

Legal and Tax Implications of Selling Your LLC

When asking “can I sell my LLC,” it’s essential to consider the legal and tax consequences:

  • Asset vs. Membership Interest Sale: An asset sale involves selling individual components (inventory, IP, equipment), while a membership interest sale transfers ownership of the entire LLC entity.
  • Tax Consequences: Selling assets might trigger capital gains taxes; selling membership interests may impact self-employment taxes. A CPA can guide the most tax-efficient route.
  • Successor Liability: If the buyer takes over liabilities, it should be clarified in the purchase agreement.
  • Consent Requirements: Check if other members need to approve the sale; some states or agreements mandate unanimous consent.

Consulting a tax advisor and business attorney can help structure the deal to minimize risks and liabilities.

Buy-Sell Agreement

However, your LLC might also have a separate buy-sell agreement.

This agreement will contain only those buy-sell provisions that must be looked to when transferring membership rights in the LLC. Therefore, whereas the operating agreement lays out several different decision-making processes, the buy-sell agreement will only specify the guidelines regarding the sale of your LLC or the partial sale in membership rights.

Such buy-sell provisions will assist in placing a certain value on the business, which will help identify the amount of money to be paid when purchasing a piece of the LLC. The provisions might also identify restrictions on who can become a member, and if the existing member must sell his or her interest rights to another existing member.

If you don’t have an operating agreement or a buy-sell agreement, then the state statute applies. You will want to ensure that you are satisfied with the state laws, as such laws might not provide the best outcome for your LLC.

With that said, the buyer and seller could also enter into an agreement at the time of sale, one in which adopts its own rules and regulations that are distinct from state statutes.

Some states require that the LLC be dissolved if a member chooses to sell his or her rights in the company. If this is the case, it is best to speak to an attorney who can assist in the transfer process to prevent an involuntary dissolution of your business.

It is also a good idea to draft an operating agreement as soon as possible to prevent issues like this, particularly when it comes to the transfer or sale of your LLC.

Steps to Finalize the LLC Sale

Once the due diligence is complete and both parties agree to move forward, follow these steps:

  1. Draft a Purchase Agreement: This outlines the terms of the sale, including price, payment structure, and what’s being sold.
  2. Update State Filings: Some states require filing amendments or new documentation to reflect the ownership change.
  3. Notify Stakeholders: Inform clients, suppliers, and regulatory agencies as needed.
  4. Transfer Licenses and Permits: Certain permits may need to be reassigned or reissued in the new owner’s name.
  5. Close the Deal: This may include payment transfers, signing final documents, and officially handing over the business.

A lawyer should review the sale documents to ensure they protect your interests and comply with state laws.

When State Law Takes Precedence

If you don’t have an operating agreement or buy-sell provisions in place, state statutes govern how ownership can be transferred. This might include:

  • Requiring unanimous member consent
  • Mandating the LLC be dissolved and re-formed
  • Setting default valuation or transfer procedures

Because these laws can be rigid or unfavorable, it's best to avoid defaulting to them. Drafting proper agreements early in your business lifecycle is key to flexibility during a sale or transfer.

Common Reasons for Selling an LLC

Business owners might ask "can I sell my LLC" for a variety of personal or strategic reasons, including:

  • Retirement or career change
  • Business underperformance
  • Relocation
  • Partner disputes
  • Desire to cash out after growing the business

Whatever the reason, preparing in advance ensures a smoother and more profitable transition.

Can I Sell a Single-Member LLC?

Yes, even single-member LLCs can be sold. The process is typically simpler since there are no co-owners, but you still must:

  • Determine whether you're selling the business entity or just its assets
  • Create a purchase agreement and transfer necessary business licenses
  • Inform the IRS and state tax authorities of the ownership change
  • File the appropriate paperwork to update LLC ownership with the state

Professional legal assistance is still recommended, especially when dealing with large assets, liabilities, or intellectual property.

Frequently Asked Questions

Can I sell my LLC if I have business debt?Yes, but buyers may be hesitant. You can either settle the debt beforehand or negotiate responsibility during the sale.

Do I need my co-owners’ approval to sell my part of the LLC?In multi-member LLCs, your operating agreement usually outlines transfer rules. Often, member approval is required.

How long does it take to sell an LLC?The process can take a few weeks to several months depending on business complexity, valuation, buyer readiness, and due diligence.

Can I sell an LLC without an operating agreement?Yes, but it’s riskier. State default laws apply, which might not align with your goals. It’s highly recommended to create one.

Where can I find help to sell my LLC?You can connect with experienced business attorneys on UpCounsel to guide you through the legal, tax, and procedural aspects of selling your LLC.

If you need help selling your LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.