Selling An Interest In A Missouri LLC

Question: Can I sell my interest in a Missouri LLC that does not have a signed written operating agreement? I am an equal 1/3 member in the LLC. Do I need approval from the other members? Dan.

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Below are relevant provisions from the Missouri LLC Act.

Mo. Stat. §347.115. Interest in company is personal property, assignability. 1. The interest of a member in a limited liability company is personal property and, except as provided in the operating agreement, may be assigned in whole or in part. An assignment of an interest does not entitle the assignee to participate in the management of the business and affairs of the limited liability company or to become or to exercise the rights of a member, except as provided in section 347.113. An assignee that has not become a member shall only be entitled to receive, to the extent assigned, the share of distributions and profits, including distributions representing the return of contributions, to which the assignor would otherwise be entitled with respect to the assigned interest. * * *

Mo. Stat. §347.113. Members--additional members. 1. A person is a member at the time the limited liability company is formed if such person is identified as a member in and signs, in person or by an attorney in fact, or otherwise becomes a party to the operating agreement.

2. A person may be admitted as an additional member by signing, in person or by an attorney in fact, or otherwise becoming a party to the operating agreement and by complying with the applicable terms and conditions of the operating agreement or, if the operating agreement does not so provide, upon the written consent of all members; or in the case of an assignee of the interest of a member who has the power, as provided in the operating agreement, to grant the assignee the right to become a member, upon the exercise of that power in compliance with any conditions limiting the exercise thereof.

Sorry Dan but it does not look good. Can you sell your LLC interest? This appears to be the case under Mo. Stat. §347.115. Note: a sale is within the meaning of the term assignment. The more important question is whether the buyer of your LLC interest can become a member of the LLC. As I read Section 347.113, unless the operating agreement states otherwise (and your LLC does not have an operating agreement), all members must agree to the admission of a new member.

Bottom line: you can sell your LLC interest to another party who gets all your rights to distributions from the LLC; however, the buyer cannot participate in the management of the LLC by becoming a member.