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How to sell an LLC, or part of one.

Selling an LLC can mean selling the whole company, selling its assets, or bringing in a new owner for part of it. Each path has different paperwork and tax results.

7 minute read Reviewed

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The short version

  • Check your operating agreement for transfer rules first.
  • An interest sale transfers the LLC; an asset sale transfers what it owns.
  • Clean books and records make the business easier to value and sell.
  • Taxes differ by structure, so plan them before you sign.

Two ways to sell

In a membership interest sale, the buyer purchases your ownership in the LLC. The LLC keeps its contracts, accounts, and history, including any liabilities. In an asset sale, the LLC sells specific things it owns, like equipment, inventory, customer lists, or the brand, and the buyer usually leaves the liabilities behind.

Selling part of your interest to bring in a partner is a smaller version of the interest sale.

Start with your operating agreement

Before talking to buyers, read what your agreement says about:

  • Whether other members must approve a sale.
  • A right of first refusal that lets existing members buy first.
  • Buy-sell terms and how a price is set.
  • Whether a buyer becomes a full member or only receives profits.

Get ready to sell

  • Bring the books up to date with clear profit and loss statements.
  • Confirm the LLC is in good standing and its filings are current.
  • Gather contracts, leases, licenses, and intellectual property records, and check which can transfer.
  • Get a valuation, from an appraiser or a business broker, based on assets, earnings, or comparable sales.

The sale, step by step

  1. 1

    Letter of intent

    A short outline of price, structure, and timing.

  2. 2

    Due diligence

    The buyer reviews finances, contracts, and liabilities.

  3. 3

    Purchase agreement

    The binding contract, usually drafted by attorneys.

  4. 4

    Closing

    Payment, signed transfer documents, and the handover.

Paperwork after closing

  • Update the operating agreement, or the buyer adopts a new one.
  • File state updates if your state lists members or managers, or if the agent or address changes.
  • Report a new responsible party to the IRS on Form 8822-B within 60 days.
  • Change bank signers, licenses, and permits as needed.

Taxes on the sale

An interest sale and an asset sale are taxed differently for both sides, and how the price is allocated among assets matters. A change from one owner to several, or the reverse, can also change how the LLC is taxed. Plan the structure with a tax professional before you sign.

This guide is general information, not legal or tax advice. Rules differ by state and change over time, so check your state's official website or a licensed professional before you act. YaH Brands is not a law firm or an accounting firm.

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Common questions

  • It depends on your operating agreement and state law. Many agreements require consent or give other members the first chance to buy.

  • In an interest sale, the LLC and its EIN continue, though a change in members can affect tax classification. In an asset sale, the buyer uses their own business and EIN.

  • Not always. Brokers help find buyers and set price. Many small sales happen between people who already know each other.