[WSBARP] LLC termination of joint ownership form
Josh Grant
jgrant at accima.com
Tue Mar 18 13:09:46 PDT 2014
thanks Paul. yes that is helpfull.
Josh
----- Original Message -----
From: Paul <mailto:pneumiller at hotmail.com> Neumiller
To: wsbarp at lists.wsbarppt.com
Sent: Tuesday, March 18, 2014 11:44 AM
Subject: RE: [WSBARP] LLC termination of joint ownership form
If you have an LLC Operating Agreement, then are you looking for something
like the attachment?
-----Original Message-----
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Tuesday, March 18, 2014 11:05 AM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] LLC termination of joint ownership form
Thankyou Spencer... and others, to my hastily written question. There is
a well drafted LLC in place with the prerequisites fulfilled.. This is
farm land with family issues that are motivating the change.. and yes an
operating agreement will be drafted.
Joshua F. Grant
Attorney at Law
P.O. Box 619
Wilbur, WA 99185
t 509 647 5578
f 509 647 2734
----- Original Message -----
From: Spencer Stromberg <mailto:spencers at sullivanstromberg.com>
To: wsbarp at lists.wsbarppt.com
Sent: Tuesday, March 18, 2014 10:29 AM
Subject: Re: [WSBARP] LLC termination of joint ownership form
I agree with Rick about a good LLC operating agreement being a
prerequisite for managing the property in LLC ownership with multiple
members. However, I think the question was how to get 3 of the 4 members
out of the LLC and into tenancy-in-common ownership with the LLC as the
4th TIC. I'm not sure why they would rather be TICs instead of LLC
members, since the LLC provides the framework for centralized management
that is needed with 4 owners, but I'll just get back to the question
asked.
If my understanding of the question is correct, it seems like the LLC
simply needs to distribute in-kind to each of the 3 exiting members. I
think all you need is a resolution of the members to the effect that: a)
Members A, B, and C want out of the LLC; b) Member D is willing to agree
to their withdrawal; c) the LLC will distribute an undivided 1/4 interest
in the property to each of the 3 exiting members in return for their
conveyance of their interests in the LLC; and, d) Member D elects to
continue the LLC (since the withdrawal of the other 3 would normally be an
event of dissolution). The only other documentation required would be 3
bills of sale and 3 deeds with excise tax affidavits.
The transaction should qualify for exemption from excise tax under WAC
458.61A.211(2)(b) as a mere change in identity or form (with no change in
beneficial ownership). This assumes there is no other consideration
passing among the members and/or LLC.
My big concern about the transaction whether the 4 members (now
tenants-in-common) will have any kind of tenancy in common agreement in
place upon distribution? The management of the property will become
unwieldy without one. Given the added liability protection and potential
for restrictions on transfer, control of the use of the property, etc.,
these people are probably far better off with the property staying in the
LLC and having a good operating agreement put in place, per Rick's advice.
Spencer A. W. Stromberg
Sullivan Stromberg, PLLC
827 W. 1st Avenue, Suite 425
Spokane, WA 99201-3914
509.413.1004
509.413.1078 Fax
www.sullivanstromberg.com
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On Mon, Mar 17, 2014 at 4:26 PM, Josh Grant <jgrant at accima.com> wrote:
Hi group.
I have a client who is holding land in a LLC., 4 co-owners (family
members). They want to terminate the joint ownership, leave 1/4th with
one (and he will continue to hold in an LLC) ; the rest will get their
shares as undivided owners. I think a simple agreement will work, but I
thought maybe someone will have a form they used to save some time. THey
will give their ownerhsip interest in the LLC to the one and he, as
managing member will distribute their shares out.
Anyone have something similar?
thanks
Joshua F. Grant
Attorney at Law
P.O. Box 619
Wilbur, WA 99185
t 509 647 5578 <tel:509%20647%205578>
f 509 647 2734
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