assignment of interest letter

Assignment of Membership Interest: The Ultimate Guide for Your LLC

LegalGPS : July 24, 2024 at 12:10 PM

As a business owner, there may come a time when you need to transfer ownership of your company or acquire additional members. In these situations, an assignment of membership interest is a critical step in the process. This blog post aims to provide you with a comprehensive guide on everything you need to know about the assignment of membership interest and how to navigate the procedure efficiently. So, let's dive into the world of LLC membership interest transfers and learn how to secure your business!

Assignment of Membership Interest Template

Legal GPS templates are drafted by top startup attorneys and fully customizable.

Table of Contents

Necessary approvals and consent, impact on ownership, voting, and profit rights, complete assignment, partial assignment.

• Key elements to include

Step 1: Gather Relevant Information

Step 2: review the llc's operating agreement, step 3: obtain necessary approvals and consents, step 4: outline the membership interest being transferred, step 5: determine the effective date of the assignment, step 6: specify conditions and representations, step 7: address tax and liability issues, step 8: draft the entire agreement and governing law clauses, step 9: review and sign the assignment agreement.

• Advantages of using a professionally-created template
• How our contract templates stand out from the rest

Frequently Asked Questions (FAQs) about Assignment of Membership Interest

Do you need a lawyer for this, what is an assignment of membership interest.

An assignment of membership interest is a document that allows a member of an LLC to transfer their ownership share in the company to another person or entity. This can be done in the form of a sale or gift, which are two different scenarios that generally require different types of paperwork. An assignment is typically signed by the parties involved and delivered to the Secretary of State's office for filing. However, this process can vary depending on where you live and whether your LLC has members other than yourself as well as additional documents required by state law.

Before initiating the assignment process, it's essential to review the operating agreement of your LLC, as it may contain specific guidelines on how to assign membership interests.

Often, these agreements require the express consent of the other LLC members before any assignment can take place. To avoid any potential disputes down the line, always seek the required approvals before moving forward with the assignment process.

It's essential to understand that assigning membership interests can affect various aspects of the LLC, including ownership, voting rights, and profit distribution. A complete assignment transfers all ownership rights and obligations to the new member, effectively removing the original member from the LLC. For example, if a member assigns his or her interest, the new member inherits all ownership rights and obligations associated with that interest. This includes any contractual obligations that may be attached to the membership interest (e.g., a mortgage). If there is no assignment of interests clause in your operating agreement, then you will need to get approval from all other members for an assignment to take place.

On the other hand, a partial assignment permits the original member to retain some ownership rights while transferring a portion of their interest to another party. To avoid unintended consequences, it's crucial to clearly define the rights and responsibilities of each party during the assignment process.

Types of Membership Interest Transfers

Membership interest transfers can be either complete or partial, depending on the desired outcome. Understanding the differences between these two types of transfers is crucial in making informed decisions about your LLC.

A complete assignment occurs when a member transfers their entire interest in the LLC to another party, effectively relinquishing all ownership rights and obligations. This type of transfer is often used when a member exits the business or when a new individual or entity acquires the LLC.

For example, a member may sell their interest to another party that is interested in purchasing their share of the business. Complete assignment is also used when an individual or entity wants to purchase all of the interests in an LLC. In this case, the seller must receive unanimous approval from the other members before they can transfer their entire interest.

Unlike a complete assignment, a partial assignment involves transferring only a portion of a member's interest to another party. This type of assignment enables the member to retain some ownership in the business, sharing rights, and responsibilities proportionately with the new assignee. Partial assignments are often used when adding new members to an LLC or when existing members need to redistribute their interests.

A common real-world example is when a member receives an offer from another company to purchase their interest in the LLC. They might want to keep some ownership so that they can continue to receive profits from the business, but they also may want out of some of the responsibilities. By transferring only a partial interest in their membership share, both parties can benefit: The seller receives a lump sum payment for their share of the LLC and is no longer liable for certain financial obligations or other tasks.

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How to Draft an Assignment of Membership Interest Agreement

A well-drafted assignment of membership interest agreement can help ensure a smooth and legally compliant transfer process. Here is a breakdown of the key elements to include in your agreement, followed by a step-by-step guide on drafting the document.

Key elements to include:

The names of the assignor (the person transferring their interest) and assignee (the person receiving the interest)

The name of your LLC and the state where it was formed

A description of the membership interest being transferred (percentage, rights, and obligations)

Any required approvals or consents from other LLC members

Effective date of the assignment

Signatures of all parties involved, including any relevant witnesses or notary public

Before you begin drafting the agreement, gather all pertinent data about the parties involved and the membership interest being transferred. You'll need information such as:

The names and contact information of the assignor (the person transferring their interest) and assignee (the person receiving the interest)

The name and formation details of your LLC, including the state where it was registered

The percentage and value of the membership interest being transferred

Any specific rights and obligations associated with the membership interest

Examine your LLC's operating agreement to ensure you adhere to any predetermined guidelines on assigning membership interests. The operating agreement may outline specific procedures, required approvals, or additional documentation necessary to complete the assignment process.

If your LLC doesn't have an operating agreement or if it's silent on this matter, follow your state's default LLC rules and regulations.

Before drafting the assignment agreement, obtain any necessary approvals or consents from other LLC members as required by the operating agreement or state law. You may need to hold a members' meeting to discuss the proposed assignment and document members' consent in the form of a written resolution.

Detail the membership interest being transferred in the Assignment of Membership Interest Agreement. Specify whether the transfer is complete or partial, and include:

The percentage of ownership interest being assigned

Allocated profits and losses, if applicable

Voting rights associated with the transferred interest

The assignor's rights and obligations that are being transferred and retained

Any capital contribution requirements

Set an effective date for the assignment, which is when the rights and obligations associated with the membership interest will transfer from the assignor to the assignee.

This date is crucial for legal and tax purposes and helps both parties plan for the transition. If you don’t specify an effective date in the assignment agreement, your state's law may determine when the transfer takes effect.

In the agreement, outline any conditions that must be met before the assignment becomes effective. These could include obtaining certain regulatory approvals, fulfilling specific obligations, or making required capital contributions.

Additionally, you may include representations from the assignor attesting that they have the legal authority to execute the assignment. Doing this is important because it can prevent a third party from challenging the assignment on grounds of lack of authority. If the assignor is an LLC or corporation, be sure to specify that it must be in good standing with all necessary state and federal regulatory agencies.

Clearly state that the assignee will assume responsibility for any taxes, liabilities, and obligations attributable to the membership interest being transferred from the effective date of the assignment. You may also include indemnification provisions that protect each party from any potential claims arising from the other party's actions.

For example, you can include a provision that provides the assignor with protection against any claims arising from the transfer of membership interests. This is especially important if your LLC has been sued by a member, visitor, or third party while it was operating under its current management structure.

In the closing sections of the assignment agreement, include clauses stating that the agreement represents the entire understanding between the parties concerning the assignment and supersedes any previous agreements or negotiations. Specify that any modifications to the agreement must be made in writing and signed by both parties. Finally, identify the governing law that will apply to the agreement, which is generally the state law where your LLC is registered.

This would look like this:

Once you've drafted the Assignment of Membership Interest Agreement, ensure that all parties carefully review the document to verify its accuracy and completeness. Request a legal review by an attorney, if necessary. Gather the assignor, assignee, and any necessary witnesses or notary public to sign the agreement, making it legally binding.

Sometimes the assignor and assignee will sign the document at different times. If this is the case, then you should specify when each party must sign in your Assignment Agreement.

Importance of a Professionally-drafted Contract Template

To ensure a smooth and error-free assignment process, it's highly recommended to use a professionally-drafted contract template. While DIY options might seem tempting, utilizing an expertly-crafted template provides several distinct advantages.

Advantages of using a professionally-created template:

Accuracy and Compliance: Professionally-drafted templates are designed with state-specific regulations in mind, ensuring that your agreement complies with all necessary legal requirements.

Time and Cost Savings: With a pre-written template, you save valuable time and resources that can be better spent growing your business.

Reduced Legal Risk: Legal templates created by experienced professionals significantly reduce the likelihood of errors and omissions that could lead to disputes or litigations down the road.

Get Your Assignment of Membership Interest Template with a Legal GPS Subscription

How our contract templates stand out from the rest:

We understand the unique needs of entrepreneurs and business owners. Our contract templates are designed to provide a straightforward, user-friendly experience that empowers you with the knowledge and tools you need to navigate complex legal processes with ease. By choosing our Assignment of Membership Interest Agreement template, you can rest assured that your business is in safe hands. Click here to get started!

As you embark on the journey of assigning membership interest in your LLC, here are some frequently asked questions to help address any concerns you may have:

Is an assignment of membership interest the same as a sale of an LLC? No. While both processes involve transferring interests or assets, a sale of an LLC typically entails the sale of the entire business, whereas an assignment of membership interest relates to the transfer of some or all membership interests between parties.

Do I need an attorney to help draft my assignment of membership interest agreement? While not mandatory, seeking legal advice ensures that your agreement complies with all relevant regulations, minimizing potential legal risks. If you prefer a more cost-effective solution, consider using a professionally-drafted contract template like the ones we offer at [Your Company Name].

Can I assign my membership interest without the approval of other LLC members? This depends on your LLC's operating agreement and state laws. It's essential to review these regulations and obtain any necessary approvals or consents before proceeding with the assignment process.

The biggest question now is, "Do you need to hire a lawyer for help?" Sometimes, yes ( especially if you have multiple owners ). But often for single-owner businesses, you don't   need a lawyer to start your business .

Many business owners instead use tools like  Legal GPS for Business , which includes a step-by-step, interactive platform and 100+ contract templates to help you start and grow your company.

Get Legal GPS's Assignment of Membership Interest Template Now

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How To Write A Letter Of Interest (Sample Templates Included)

Mike Simpson 0 Comments

By Mike Simpson

Updated 5/9/2022

We’ve all been there… You’ve combed all of the job boards in search of the perfect job but, alas, haven’t been able to find anything that’s a great fit. Fortunately, there’s still one more lifeline you have at your disposal, and if used properly, it can end up being one of the most rewarding things you do for your career.

So what is this secret weapon I speak of? A letter of interest, of course!

With a letter of interest, you can connect with more opportunities. Here’s how.

What Is a Letter of Interest?

A letter of interest is a letter you send to your target company, letting them know that you’re interested in working with them. It’s also a way to see if there are any potential job opportunities that match up with your skillset that aren’t openly advertised, allowing you to tap into the hidden job market . Since over 80 percent of jobs go unadvertised, that’s a big deal.

Generally speaking, a letter of interest can be sent at any time regardless of whether a company is actively hiring, as it isn’t sent in response to a specific job opening. Rather, it’s a way of introducing yourself to a company you’re interested in and seeing about the possibility of employment with them.

Letters of interest are sometimes also called letters of inquiry for just this reason. You’re inquiring if they might have a position for you. This is the part of the equation that can be very rewarding. Rather than applying to jobs that aren’t a stellar match, you get to handpick the companies that you contact. Pretty awesome, right? We think so.

Letter of Interest vs. Cover Letter

In many ways, a letter of interest is like a cover letter. However, when it comes to a letter of interest vs. cover letter, there are differences, too.

Generally speaking, cover letters typically target specific, open jobs. With a letter of interest, you’re reaching out even though there isn’t an advertised vacancy.

Since that’s the case, cover letters are more targeted. They speak to a specific position, referencing details from the job ad. Letters of interest are a touch more general, highlighting your strengths in a field and how you could benefit the company in a broad sense without connecting it to a particular role.

How To Write a Letter of Interest

Much like any correspondence you send any employer, you have to make sure that a letter of interest for a job is well crafted and appropriate. You’re introducing yourself to a potential employer, so you want to put your best foot forward.

A poorly written letter of inquiry can potentially make any possibility of working at your dream job with your target company a solid “NO” in the “Do you like me?” boxes. That means you need to ensure you take the time to do it right.

If you do it correctly, a letter of interest is a great way to demonstrate your ability to market yourself and highlight your best qualifications. Plus, it can lead to real opportunities.

Tailoring Your Letter of Interest

As you’ve no doubt seen in our other blog posts, we’re very big on tailoring. Your letter of interest is another opportunity (actually, the first opportunity!) for you to find out exactly what the company is looking for and present yourself as that person.

When applying for a specific position, you have the benefit of using the job description to comb through in search of the qualities that the company puts a lot of value in. But since this is a letter of interest, you are traditionally not applying to a specific position, so you need to be a little more creative. Since that’s the case, you need to do some hardcore research, taking the time to learn about the specific type of people the company likes to hire.

Researching a Company Through Their Online Presence

There is a virtual treasure trove of information available about a company when you peruse its various web properties. Since you’re looking to learn more about the people who get hired to work there, it’s wise to spend time digging into each web property in search of clues.

Quite often, there are “day in the life” videos featuring employee interviews that are incredibly useful. You can also go to the employee list on the company’s LinkedIn page and go through the profiles to see what experience and skills they have.

Putting the “Tailoring Method” To Work

Once you have figured out the types of people that your company hires, you want to do your best to emulate them in your letter of interest. Choose a few skills and abilities that you want to highlight that align with what your research revealed about the employees. Then, start thinking up a quick supporting statement for each one that you use. After all, if you can’t back it up, there is no point in even mentioning it.

Once you have done the research and have uncovered the qualities that you want to showcase, you are ready to begin writing your letter of interest.

Best Letter of Interest Format

Half of the battle is making sure that you nail your letter of interest format. After all, you won’t exactly be making the best first impression if your letter is a convoluted mess that is hard to read and makes no sense.

Here is the basic format for you to follow, which you can see in the three examples we use below:

Your Contact Info

No surprises here. Name, address, telephone number, email, and your website. If you’re not comfortable providing your address or any other information, don’t worry about it. Just make sure they can get in touch with you!

Use a traditional format for the date, writing out the month, followed by the day, and ending with the year.

Company Contact Info

Please don’t start the letter with “to whom it may concern.” Do the research and find a specific person to address the letter to. A good place to start would be a hiring manager, another person in HR, or even better, the manager or director of the department you envision yourself working in.

Opening Paragraph

Introduce yourself and your intentions.

Qualification/Experience Paragraph

Attack this paragraph with two purposes in mind:

• Showing how you add value
• Demonstrating you have the qualities they value

This is your time to shine. Keep it brief and succinct, picking two to three qualities and supporting them with facts.

Closing Paragraph

Thank them for their time and offer your availability for an “informational interview” at their earliest convenience.

What’s an informational interview? It’s both an opportunity for you to learn more about the company and the various positions within the company AND a great way for you to meet the right people in the organization you are interested in.

More importantly, it’s an opportunity for you to let your award-winning personality shine, and if executed properly, it can help you land a job at the company of your dreams!

Stick with “regards” or just “sincerely,” add your name, and you’ll be good to go.

Common Mistakes

Many people fall into the same traps and make some of these classic letter of interest mistakes. Do your best to avoid these if you want to get your foot in the door!

1. You don’t send a letter of interest at all

Too often, people find a company they’d like to work for and just blindly send in a resume with nothing else attached. Sure, it might be a super impressive resume, but if you don’t include a letter of interest discussing why you’re sending it in and who you are, you might as well just be throwing those resumes away.

On the flip side…DO NOT FORGET TO INCLUDE YOUR RESUME!

2. Sending your letter of interest out with a generic heading

As mentioned above, you need to take the time to do a little digging and find out to who you should address your letter. Sending out a generic “Dear HR Director” or “To Whom It May Concern” isn’t going to win you any brownie points.

3. Not saying what you can do for them, but what they can do for you

Regardless of why you’re interested, remember, it’s about what you can do for them, not what they can do for you! Tell them what you can do to help them achieve their goals.

4. Not tailoring your letter

If you’re going to show initiative by writing a letter of inquiry, make sure that initiative extends to your research as well! Supercharge your letter by highlighting qualities that align with the company values, increasing your odds of success.

5. Being boring

You’re shooting for your target company and your dream job, so don’t simply make a list of all of your skills and abilities. Instead, make sure to dazzle them with what you bring to the table, adding something extra to generate interest.

6. Being too long

Your goal is to catch their attention and leave them wanting more…which means short, sweet, and to the point. Keep your letter under a page.

7. Being sloppy

There is no excuse for typos or sloppy writing. You’re trying to get an informational (or even a full-on) interview, so get these basics right. Check. Double-check, and then check again!

8. Not following up

Yes, you should treat your letter of interest exactly like and job application and follow up.

Sending a letter of interest is a proactive step, so keep being proactive! Ask for a job interview, an informational interview, or a meeting HR director to talk about potential roles you might fill. Then, follow up on that request.

A Few Great Letter of Interest Sample Templates

Now that we have that out of the way, let’s take a look at a few examples so you can get your own started! Here are three different scenarios from which you might decide to write a letter of interest to a company.

Choose the best letter of interest sample that fits with your situation, but don’t simply copy the example word-for-word. You need to input your own experiences and personality, so think of this letter of interest sample as more of a template that will guide you to success!

Letter of interest for your target company following a positive encounter:

Your Address

Your City, State, Zip Code

Your Phone Number

City, State Zip

Dear (remember, make this specific!):

I recently had the opportunity to interact with a few members of your customer support team while conducting research for a project. My time with them was brief but memorable. Your team was friendly, poised, and professional, and I was impressed with their willingness to help and their quick responses to my questions.

It is clear customer satisfaction is an integral part of your company’s core values. It is for this reason that I am writing to you. I feel my own personal values and special talents might benefit your customer service department. I believe in personal accountability and integrity and have always made sure to act in a professional and ethical manner. Attention to detail is similarly a priority, ensuring that my work is nothing short of my best at all times.

If I were to be hired by your company, I would be dedicated to delivering the same kind of high-quality customer service I myself experienced. Both a motivated self-starter and an enthusiastic team player, I feel I’d be an exceptional fit.

In the hopes of scheduling an interview with you or answering any questions you might have, I will call you [upcoming date]. Please do not hesitate to contact me with any questions at any time at [phone number] or email, [email address].

Thank you for your time in considering my qualifications.

Letter of interest following a write up of the target company:

Dear Mr./Ms. Last Name,

While reading through a trade publication last week, I came across an article outlining why your company has been recognized as one of the best places to work in the country for tech professionals. Your entire focus has been on making sure that your company is not only a leader in the industry but also an innovator, pioneering new and emerging technology. For this reason, I am sending you my resume in the hopes that I might be able to join your team.

I have worked exclusively within the technology field for the past five years. During that time, I’ve worked in a variety of positions, giving me experience in accounting, including finance and budgeting. I was also responsible for inventory control and vendor relations. I have been instrumental in my past positions in bringing new and emerging technology into our business processes, and I am actively looking for opportunities with companies that would allow me to continue that practice. I believe strongly in always being at the forefront of technological development, a perspective I feel your company has, too.

As a team leader, I am proud of the fact that not only have we never missed a deadline but that we have come in under budget while delivering superior results every time. I firmly believe in the integrity and professionalism of my work, striving to ensure that every aspect of what I do also upholds the company’s core values.

I will call you on [date] to answer any questions about this letter or my resume in the hope of scheduling an interview. If you prefer, please contact me by phone [phone number] or email, [email address].

Letter of interest for a recent graduate looking for work:

I read about [company name]’s retail management training program in [publication name], and I would like to inquire about the possibility of openings. As a recent graduate from the University of California with a degree in Business Management, I am very interested in a career in retail management, and think your program is a perfect match for both my skills and my experiences. I have over five years of retail experience, including time as a Sales Associate and a Manager.

Along with this letter, I have included my resume, which contains additional information on my experience and skills. I would appreciate the opportunity to discuss the training program with you and to provide further information on my candidacy. I can be reached anytime via my cell phone, [phone number], or by email at [email address].

Thank you for your time and consideration. I look forward to speaking with you about this exciting opportunity.

Putting It All Together

Now, you should know all you need to about the amazing letter of interest! Remember, each sample letter of interest above is meant to serve as inspiration. When you create yours, remember to keep it targeted, short, and professional. That way, you increase your odds of getting a response.

And as always,

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Co-Founder and CEO of TheInterviewGuys.com. Mike is a job interview and career expert and the head writer at TheInterviewGuys.com. His advice and insights have been shared and featured by publications such as Forbes , Entrepreneur , CNBC and more as well as educational institutions such as the University of Michigan , Penn State , Northeastern and others. Learn more about The Interview Guys on our About Us page .

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Assignment Of Membership Interest: Definition & Sample

Jump to section, what is an assignment of membership interest.

An assignment of membership interest is a legal document that allows members of a Limited Liability Company (or LLC) to reassign their interest in the company to a different party. LLC laws are different from state to state, so what's required in an assignment of membership agreement changes.

Typically seen when a member wishes to exit a business, the assignment of membership interest agreement is used when transferring membership interest to another person. It is possible to transfer membership of an LLC to something like a revocable trust but requires those terms and conditions to be set in the assignment agreement.

Assignment Of Membership Interest Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.1.1.2 3 dex10112.htm ASSIGNMENT OF MEMBERSHIP INTEREST , Viewed October 13, 2021, View Source on SEC .

Who Helps With Assignments Of Membership Interest?

Lawyers with backgrounds working on assignments of membership interest work with clients to help. Do you need help with an assignment of membership interest?

Post a project  in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate assignments of membership interest. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Meet some of our Assignment Of Membership Interest Lawyers

D. Cassie B.

Cassie has spent more than a decade handling all aspects of litigation, focusing on divorce, family law, Personal Injury Protection (PIP) claims, contracts, fraudulent insurance claims, and bodily injury claims. She has worked at small boutique law firms, in house for major insurance carriers, and most recently as a partner at a large nationwide practice. She has served as lead counsel on thousands of cases statewide. Cassie now contributes this knowledge and experience for the benefit of her clients. She is zealous about obtaining the best financial outcome for her clients and supporting them while they navigate the difficult terrain of family law, contracts, insurance claims, and personal injuries.

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Obtained J.D. in December 2021, admitted to the Indiana Bar in November 2022. Began working as a clerk for civil defense firm in March 2022 and have been the same firm to the present, currently working as an Associate Attorney.

Credible history in navigating complex legal landscapes to deliver strategic solutions that optimize employee benefits programs and healthcare compliance. Demonstrated mastery in interpreting and applying ERISA, HIPAA, and ACA regulations, safeguarding client interests, and minimizing legal risks. Remarkable background in advising diverse clientele, ranging from corporations to healthcare providers, on intricate regulatory frameworks, compliance strategies, and litigation support. Adept at crafting innovative strategies, providing expert guidance, and driving compliance with unwavering precision. Skilled in leveraging unique skill set that combines medical knowledge and technological proficiency to address multifaceted challenges at intersection of healthcare and technology. Exceptional project management skills with track record of contributing to high-impact initiatives. Accomplished in drafting and negotiating contracts, mitigating legal risks, and streamlining processes.

Attorney admitted to the New York State Bar. Hispanic. Eager to meet client's needs and provide legal assistance.

see resume.

I am a business organization, IP and data privacy attorney with over 19 years of experience, as well as a Certified Information Privacy Professional. I have successfully worked in both the public and private sectors, contribute to academia in all of my areas of expertise, and hold leadership positions with key organizations in the legal industry. Some sample agreements/documents with which I have drafting and negotiating expertise include: Business Formation Agreements Privacy Policies Information Security Policies and Documentation Master Services Agreements Joint Venture Agreements Non-Disclosure & Confidentiality Agreements Software Licensing Agreements Employment Contracts Distribution Agreements Equipment Lease Agreements All forms of Entertainment Legal Agreements M&A Due Diligence Checklists EDiscovery Protocols Legal Hold Documentation Outsourcing Agreements Real Estate Purchase & Sale Agreements Subcontracting Agreements Software Development Agreements for Mobile Apps IP Licensing and Royality Agreements Loan Agreements & Documentation Insurance Policy Reviews Employee Handbooks & Policies E-Commerce Terms & Conditions Sponsorship Agreements All forms of Digital Creator Agreements Subscription Agreements & Policies Agency Agreements Supply Chain & Logistics Agreements And more...

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Assignment of LLC Interest

An Assignment of LLC Interest is a document through which an LLC member can transfer their ownership rights.

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How it works.

If an LLC member wishes to transfer their ownership rights to a different entity for any reason, they'll need to submit an Assignment of LLC Interest. This document will be a way for the member to communicate this intention to other LLC members.

What Is an Assignment of LLC Interest?

You can use an Assignment of LLC Interest in situations where an LLC member wishes to secure a loan, settle a debt, or leave their LLC. 

In such cases, this document will serve to transfer the member's interest – which can be done wholly or partially – according to state laws and the governing documents of the LLC in question.

Other Names for Assignment of LLC Interest

Since the document's content takes precedence over the title, an Assignment of LLC Interest doesn't necessarily have to bear that name. It's also called:

• Assignment Agreement
• Transfer Agreement
• Interest Transfer Agreement

Who Needs an Assignment of LLC Interest?

LLC members may decide to assign their interest for several reasons. One of the more common reasons for assignment is providing collateral for a loan.

Another reason might be if the member needs to settle a debt, in which case the assignment remains effective while the debt is present.

Finally, a member can assign interest to their legal heirs. In this case, the assignment becomes valid upon the member's death.

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How to Create an Assignment of LLC Interest With 360 Legal Forms

An Assignment of LLC Interest should clearly outline the rights and limitations as they apply both to the assignor, i.e., the LLC member transferring interest, and the assignee, i.e., the party receiving interest. For this reason, the document should be detailed and carefully crafted. State laws can potentially restrict assignments, and documents contrary to those laws can be subject to invalidation.

Let 360 Legal Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you need to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.

What Information Will I Need to Create My Assignment of LLC Interest?

To create your document, please provide:

• Assignor Information: Details on the LLC member transferring interest 
• Assignee Information: Details on the entity receiving interest
• Assignment Type: Description of whether the assignment is partial or full 
• Type of Partial Assignment (If Applicable): Determining whether the assignor will transfer a portion of ownership or specific rights and responsibilities
• Signatures : All involved parties need to sign the document to make it legally binding 

Assignment of LLC Interest Terms

• Assignor : The LLC member assigning their rights, responsibilities, and interest
• Assignee: The individual or other entity receiving the rights, obligations, and interest from the Assignor
• Authority : A confirmation that the agreement is following regulations affecting all parties (Assignor and Assignee)
• Severability : If you can't execute any individual part of the agreement, the rest of the agreement will remain valid

Assignment of LLC Interest Signing Requirements

An Assignment of LLC Interest is a legally binding document, which means all parties should ensure they understand and agree to all terms within it before signing. 

Once the Assignor and Assignee confirm that all information in the document is correct, both parties will need to sign the document to make it valid.

What to Do With Your Assignment of LLC Interest?

An Assignment of LLC Interest defines the scope of interest an LLC member will transfer to another party for other members of the LLC. 

After signing the document, you will execute the interest transfer. Both parties should keep their copies of this document for the record.

Frequently Asked Questions

LLC members often have two roles within the LLC: as interest owners and managers. When a member decides to assign interest to another party, the transfer won't affect that member's management role. 

Should an LLC member wish to leave the LLC management, they'll need to resign from that role in an action separate from the interest transfer. At that point, they’ll determine their replacement in the management following the LLC operating agreement and the state laws.

An LLC member can transfer their interest fully or partially. Full transfer means that the Assignee receives interest identical to that previously held by the Assignor.

In the case of a partial transfer, an LLC member will assign either a portion of their interest or only certain rights to the Assignee. 

In most states, the Assignee won't have the right to participate in the operations of the LLC in question. The Assignee is also protected from the Assignor's liabilities, but this may vary according to the state. For example, the Assignee receives the liability in Florida and California.

If the Assignee is introduced into the LLC as a member following the transfer, the Assignee's limitations and rights will be the same as the Assignor's. 

Most states will not prohibit any LLC members from assigning interest. Likewise, in most states, interest transfer won't mean that the Assignor relinquishes their right to vote or continue their involvement in LLC management. 

Texas is an exception since that state's law mandates that the Assignor must forfeit their LLC membership upon transfer.

Notifying all LLC members of an assignment is mandatory, and in some states, you can only enforce the document upon approval by all LLC members. 

LLC members can decide whether the Assignee will become a member if the Assignor wishes to resign their position. The interest transfer doesn't guarantee that the Assignee will automatically become an LLC member.

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Users that make a Assignment of LLC Interest sometimes need additional documents.

• LLC Consent in Lieu of a Meeting
• LLC Membership Admission Agreement
• LLC Operating Agreement

LLC Membership Interest Assignment Free

When one party wants to transfer the ownership of an interest in an LLC, they can use this LLC Membership Interest Assignment. The document can also be used when one party wishes a membership interest in an LLC transferred to them.

Template Overview

When one member of an LLC, also known as a Limited Liability Company, wants to transfer their interests to another party, this LLC Membership Interest Assignment can be used. Such contracts are particularly prevalent when a member of an LLC leaves the company and wants to give up his interest.

Usually, LLC Membership Interest Assignments are created with an operating LLC. In most states, a limited liability company has to have Articles of Organization (also known as Certificates of Formation). 

An LLC can be created for any reason. If an LLC owner chooses to waive their interest in the LLC, this LLC Membership Interest Assignment can be used.

This document is quite straightforward that consists of information needed to transfer an interest in an LLC. Both the Assignor (a person transferring the interest) and the Assignee (a person receiving the interest) can fill out the information about themselves.

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

How to use this template

When one party wants to transfer the ownership of an interest in an LLC, they can use this document. The document can also be used when one party wishes a membership interest in an LLC transferred to them (with approval from the owner). Note that both parties should completely understand that the membership interest will be fully assigned. 

The filing party will have to specify identifying information about parties and the details of the membership interest, including percentage and whether or not it comes with voting rights. 

A completed document requires signatures from both parties.

Applicable law

Individual state laws govern LLC Membership Interest Assignments.  

Ready to build your document from this template?

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LLC Membership Interest Assignment

Choose the state where the LLC is formed (and primarily does business). This will be the state where all of the initial business documents for the LLC, like the Articles of Organization or Certificate of Formation, have been filed.

State of Alabama

I. This assignment ("Assignment") is made by and between the following parties: ________ , hereinafter known as "Assignor," having an address at the following:

and ________ , hereinafter known as "Assignee," having an address at the following:

II. Assignor, an individual, hereby assigns, transfers, and conveys all of Assignor's right, title and interest in and to all of Assignor's membership interests in ________ , a Alabama Limited Liability Company, hereinafter known as the "LLC," to Assignee, an individual. Such membership interest amounts to the following percentage ownership: ________ % (________ percent) membership interest, along with voting rights in the LLC, and this Assignment shall leave Assignor with no interest in the LLC. Assignee hereby accepts this Assignment.

III. This assignment is effective as of ________ and is made for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged.

IV. Assignor hereby represents and warrants and that Assignor has good title to the membership interest conveyed herein and that Assignor has no limitations on making such assignment, such as any security interest, lien, or encumbrance.

V. 88882225 2552525 5225282228 525 85555228 2552 82 8888 2522 522 82228 22 2252282 88882222'8 5282822 22 252 2228258582 82225282 82 252 228 58 52858525.

VI. 5588 5888222222 85588 82 85885 525 8825822 5222 588 22 88882225 525 88882222'8 8588288258, 25528225228, 52858, 525 5888228.

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be executed on the following date: ________ .

Assignor: ________

Signature: __________________________

Assignee: ________

Consent To Assignment Of Membership Interest

Each and all of the members of ________ , a Alabama Limited Liability Company, hereby consent to the assignment, transfer and conveyance of membership interest in ________ made by the attached LLC Membership Interest Assignment. Each and all of the members further agree that Assignee is now a member of ________ and Assignor retains no further interest in ________ .

Assignee shall have all the rights and powers of a member henceforth.

This consent is made on the following date: ____________________.

Name of Member: __________________________

Signature:__________________________

HOW TO CUSTOMIZE THE TEMPLATE

Answer the question, then click on "Next."

The document is written according to your responses - clauses are added or removed, paragraphs are customised, words are changed, etc.

At the end, you will immediately receive the document in Word and PDF formats. You can then open the Word document to modify it and reuse it however you wish.

Home » LLC Interest Transfer » Assignment and Transfer of Membership Interest

Assignment and Transfer of Membership Interest

Jeramie Fortenberry, J.D., LL.M.

An LLC owner (called a member ) can transfer an ownership interest (called a membership interest ) by complying with the transfer provisions within the LLC’s operating agreement and state law. An assignment is one of the key documents a member must prepare to officially transfer a membership interest to a transferee.

What is the Purpose of an LLC Interest Assignment?

An assignment—sometimes titled assignment and transfer or assignment and assumption —serves as a written record of a member’s transfer of an LLC interest to a transferee. It is comparable to a deed that transfers real estate, but an assignment instead transfers to a new owner (the assignee or transferee ) some or all of an LLC member’s ownership rights in the company. Like some deeds, an assignment may include the member’s guarantee that he or she actually owns the interest being transferred and has the right to transfer it.

An LLC interest assignment must comply with any transfer terms, conditions, or restrictions in the company’s operating agreement. For example, an operating agreement may require other members’ consent to the transfer or limit the ownership rights that members are allowed to transfer.

An LLC owner may also prepare an assignment when offering an ownership interest as security for a loan. In that situation, the lender is the assignee and usually claims the interest only if the member fails to repay the loan. Assignments of LLC interests pledged as collateral are subject to additional laws and are not the focus of this article.

What LLC Interests Do Assignments Transfer?

A member who creates an LLC assignment customizes the assignment to the precise ownership interest the member wishes to transfer. LLC ownership interests can generally be separated into two basic interests:

• Economic rights. A member’s economic rights (sometimes called transferable interest ) include the member’s allocation of the LLC’s profits and losses and the member’s right to receive distributions from the company.
• Membership rights. A member’s membership rights—which are typically defined in the operating agreement—include the member’s right to vote on important matters, participate in the LLC’s internal affairs, and join in the management of the company (if it is member-managed).

An assignment can transfer the member’s economic rights (in whole or in part)—in which case the transferee receives a right to LLC distributions but no right to vote on LLC matters. Or, an assignment can transfer the member’s entire interest in the company. A transfer of all membership rights typically requires other members’ approval, formal admittance of the transferee as a new member, and a separate joinder agreement under which the new member accepts the LLC’s operating agreement.

What Information is Included in an LLC Membership Assignment?

An assignment must identify the transferor and the transferee, the company, and the specific interest being transferred. It should state whether the transfer applies to all or part of the transferor’s interest and whether the transferee will receive all membership rights or an economic interest only.

Assignments often also include:

• A reference to the operating agreement’s authorization of the transfer;
• A statement that the transfer has been approved under the operating agreement’s approval standard; and
• The transferor’s warranty that he or she actually owns the interest and that the assignment does not breach any other agreements.

An assignment must be signed by the member who makes the transfer and—depending on its terms—may also be signed by the transferee and on behalf of the LLC.

Sale and Assignment of LLC Membership Interests

Transfers from Member to Member or to Non-Member Third Parties by David J. Willis J.D., LL.M.

Introduction

This article addresses legal points to consider when conveying a membership interest in a limited liability company from one individual to another. It does not address the initial issuance of such interests when the LLC is formed, nor sales of membership interests by an existing LLC to incoming members.

Additionally, this article addresses absolute assignments (full and final transfers) rather than collateral assignments (made only as security for a loan) which are a different topic entirely.

Assignments of this type may follow the execution of a letter of intent which provides for a due-diligence period. This article does not cover the contents of such an LOI but does address issues that should be considered by a prospective assignee in conducting due diligence. An LOI will often make reference to specific due diligence steps that a buyer will be permitted to take.

After covering definitions and applicable law, we will turn to principal points that should be considered in negotiating and drafting an assignment of LLC membership interest.

APPLICABLE LAW

Relevant statutory definitions.

Applicable law is found in the Business Organizations Code (BOC):

Bus. Orgs. Code Section 1.002. DEFINITIONS

(7) “Certificated ownership interest” means an ownership interest of a domestic entity represented by a certificate issued in bearer or registered form.

(32) “Fundamental business transaction” means a merger, interest exchange, conversion, or sale of all or substantially all of an entity’s assets.

(35)(A) “Governing authority” means a person or group of persons who are entitled to manage and direct the affairs of an entity under this code and the governing documents of the entity, except that if the governing documents of the entity or this code divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, “governing authority” means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this code.

(41) “Interest exchange” means the acquisition of an ownership or membership interest in a domestic entity as provided by Subchapter B, Chapter 10. The term does not include a merger or conversion.

(46) “Limited liability company” means an entity governed as a limited liability company under Title 3 or 7. The term includes a professional limited liability company.

(53) “Member” means: (A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code. . . .

(54) “Membership interest” means a member’s interest in an entity. With respect to a limited liability company, the term includes a member’s share of profits and losses or similar items and the right to receive distributions, but does not include a member’s right to participate in management.

(64) “Ownership interest” means an owner’s interest in an entity. The term includes the owner’s share of profits and losses or similar items and the right to receive distributions. The term does not include an owner’s right to participate in management.

(69-b) “Person” means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity.

(87) “Uncertificated ownership interest” means an ownership interest in a domestic entity that is not represented by an instrument and is transferred by: (A) amendment of the governing documents of the entity; or (B) registration on books maintained by or on behalf of the entity for the purpose of registering transfers of ownership interests.

A well-drafted assignment of LLC membership interest will be mindful of and consistent with these statutory terms.

Statute Authorizing LLC Membership Assignments

Foundational to the idea of a sale and assignment of LLC membership interest is the legal authority to enter into such a transaction in the first place:

Bus. Orgs. Code Sec. 101.108. ASSIGNMENT OF MEMBERSHIP INTEREST

(a) A membership interest in a limited liability company may be wholly or partly assigned.

(b) An assignment of a membership interest in a limited liability company: (1) is not an event requiring the winding up of the company; and (2) does not entitle the assignee to: (A) participate in the management and affairs of the company; (B) become a member of the company; or (C) exercise any rights of a member of the company.

Consent by other members is required. BOC Section 101.103(s) states that a “person who, after the formation of a limited liability company, acquires directly or is assigned a membership interest in the company or is admitted as a member of the company without acquiring a membership interest becomes a member of the company on approval or consent of all of the company’s members.” BOC Section 101.105 states that a “limited liability company, after the formation of the company, may: (1) issue membership interests in the company to any person with the approval of all of the members of the company. . . .”

An additional consent requirement is found in BOC Section 101.356(c) which provides that, for the most part, “a fundamental business transaction of a limited liability company, or an action that would make it impossible for a limited liability company to carry out the ordinary business of the company, must be approved by the affirmative vote of the majority of all of the company’s members.”

Accordingly, it is advisable to accompany an assignment of membership interest with a special meeting of members that approves and ratifies the change. One or more LLC resolutions may be produced as well. All affected parties (and their spouses, even if non-members) should sign off.

What category of property is an LLC membership interest?

Regardless of the type of property owner by a limited liability company, a membership interest in the LLC is personal property:

Bus. Orgs. Code Sec. 101.106. NATURE OF MEMBERSHIP INTEREST

(a) A membership interest in a limited liability company is personal property.

(a-1) A membership interest may be community property under applicable law.

(a-2) A member’s right to participate in the management and conduct of the business of the limited liability company is not community property.

(b) A member of a limited liability company or an assignee of a membership interest in a limited liability company does not have an interest in any specific property of the company.

The characterization of an LLC membership interest as personal property is important because it also signifies what it is not . For instance, it is not a real property interest even though the LLC may own real estate. It is not a negotiable instrument subject to the Uniform Commercial Code (found in Texas Business & Commerce Code Section 3.201 et seq.). Nor is a small-business LLC membership interest usually considered to be a security subject to state and federal securities laws: “An interest in a partnership or limited liability company is not a security unless it is dealt in or traded on securities exchanges or in securities markets, [and the company agreement] expressly provide[s] that it is a security . . . or it is an investment company security.” Tex. Bus. & Com. Code Sec. 8.103(c).

The foregoing applies regardless of whether the membership interest is considered certificated or uncertificated.

Statutory Qualifications for LLC Membership

Qualifications and requirements for membership in an LLC are found in the BOC:

Bus. Orgs. Code Sec. 101.102. QUALIFICATION FOR MEMBERSHIP

(a) A person may be a member of or acquire a membership interest in a limited liability company unless the person lacks capacity apart from this code.

(b) A person is not required, as a condition to becoming a member of or acquiring a membership interest in a limited liability company, to:

(1) make a contribution to the company; (2) otherwise pay cash or transfer property to the company; or (3) assume an obligation to make a contribution or otherwise pay cash or transfer property to the company.

(c) If one or more persons own a membership interest in a limited liability company, the company agreement may provide for a person to be admitted to the company as a member without acquiring a membership interest in the company.

Rights and Duties of an Assignee

BOC Sec. 101.109. RIGHTS AND DUTIES OF ASSIGNEE OF MEMBERSHIP INTEREST BEFORE MEMBERSHIP

(a) A person who is assigned a membership interest in a limited liability company is entitled to:

(1) receive any allocation of income, gain, loss, deduction, credit, or a similar item that the assignor is entitled to receive to the extent the allocation of the item is assigned; (2) receive any distribution the assignor is entitled to receive to the extent the distribution is assigned; (3) require, for any proper purpose, reasonable information or a reasonable account of the transactions of the company; and (4) make, for any proper purpose, reasonable inspections of the books and records of the company.

(b) An assignee of a membership interest in a limited liability company is entitled to become a member of the company on the approval of all of the company’s members.

(c) An assignee of a membership interest in a limited liability company is not liable as a member of the company until the assignee becomes a member of the company.

BOC Sec. 101.110. RIGHTS AND LIABILITIES OF ASSIGNEE OF MEMBERSHIP INTEREST AFTER BECOMING MEMBER

(a) An assignee of a membership interest in a limited liability company, after becoming a member of the company, is:

(1) entitled, to the extent assigned, to the same rights and powers granted or provided to a member of the company by the company agreement or this code; (2) subject to the same restrictions and liabilities placed or imposed on a member of the company by the company agreement or this code; and (3) except as provided by Subsection (b), liable for the assignor’s obligation to make contributions to the company.

(b) An assignee of a membership interest in a limited liability company, after becoming a member of the company, is not obligated for a liability of the assignor that:

(1) the assignee did not have knowledge of on the date the assignee became a member of the company; and (2) could not be ascertained from the company agreement.

It is important to note that these statutory rights and duties are subject to “restrictions and liabilities” that may be imposed by the company agreement.

PRELIMINARY CONSIDERATIONS

The company agreement.

When considering a transfer of LLC membership, it is important to first check the company agreement (operating agreement) to determine if there are buy-sell provisions or a right-of-first-refusal clause that must be worked through before the membership interest can be assigned. company agreements often require that before a sale and assignment of a membership interest can occur, the interest must first be offered pro rata to the other members, and/or to the company itself, before a transfer may be made to a person who is not currently a member. Unless waived, such provisions may be accompanied by an offer period of (for example) 10, 30, or 60 days.

Buy-sell and right-of-first-refusal provisions exist so that existing LLC members do not unwillingly find themselves in business with someone they do not know.

Non-Member Spouses

Are non-member spouses involved? Like real estate, personal property in Texas is presumed to be community property. A frequent error in transfers of LLC membership interest is failure to secure the signature of an assignor-seller’s non-member spouse. The result is that the entire interest may not have been conveyed, at least not in Texas. This is no different than if a grantee in a deed accepts the conveyance without requiring execution by the grantor’s spouse; since community property is presumed, the transfer may be incomplete if the spouse does not sign off, at least in a pro forma capacity.

To say that omitting the signature of a non-member spouse can drive subsequent disputes would be an understatement. Even though BOC Section 101.108 provides that a non-member spouse of an assignee may not assert control over the company, the potential for awkward and potentially disastrous disruption remains. Consider the case of a withdrawing member who is contemplating divorce but has not yet revealed this to other members who may want to buy his LLC membership interest. Will the assignment get tangled up in the parties’ divorce?

As is the case in transfers of real estate, it is common for sellers of an LLC membership interest to argue that the spouse should not be required to sign the assignment because the property transferred is a business asset rather than a part of the homestead. Real estate lawyers hear such excuses all the time. Other reasons may be given (“My wife is in China”). None of these excuses should be allowed to carry any weight unless the membership interest has been lawfully converted into separate property by a written partition agreement according to Section 4.102 et seq. of the Family Code.

What will be the accounting consequences? Is timing an issue?

There will likely be accounting consequences as a result of transferring an LLC membership interest. BOC Section 101.201 partially addresses this issue, stating “The profits and losses of a limited liability company shall be allocated to each member of the company on the basis of the agreed value of the contributions made by each member, as stated in the company’s records. . . .” This rule will apply unless the members collectively agree otherwise.

Attention should be given to the effective date of the assignment, since the transfer date may have more than one level of significance. It is advisable to select an effective date or record date for the assignment that facilitates easier calculation of profits and losses, or at least does not unduly complicate that calculation.

Will the membership interest pass a due-diligence inspection?

The issues referred to above are part of a larger group of due-diligence considerations that may concern a prospective buyer, which brings us to the due-diligence checklist in the next section.

DUE DILIGENCE BY THE ASSIGNEE-BUYER

Due diligence checklist.

The following is a partial list of items that should be of concern to a prospective assignee-buyer of an LLC Membership Interest:

(1) Valuation . Most small-business assignments of LLC membership interest occur among insiders who are already acquainted with the company’s assets, liabilities, management, and operations. For potential assignees who do not fall in this category, the question of valuation arises—not just valuation of the membership interest itself but valuation of the LLC as a whole, since the two are effectively inseparable.

Several articles could be written on how to evaluate and appraise a business; suffice it to say that there should be some rational basis for the asking price that can be independently confirmed by looking at the company’s finances and assets. Certain numbers will be hard (real property and bank accounts) and others will be soft (marketing strategy, proprietary information, and value of the brand).

If assets include real properties, an evaluation of value may include appraisals by licensed appraisers or the less-formal alternative of a broker price opinion (BPO). It is impressive if a real estate investment firm has an inventory of 30 rental properties; it is less so if half the properties are drowning in deferred maintenance. Numbers guys may be satisfied with financials and a spreadsheet; traditionalists will want to physically inspect the properties as part of the due-diligence process.

(2) Good Standing . It is important to verify that the LLC and the assignor (if a registered entity) are in good standing with the secretary of state and the comptroller. If not, they do not have the legal capacity to do business, which could potentially make execution of an LLC membership assignment invalid.

(3) Core LLC Documents . A prospective assignee-buyer will want to see core LLC documents including the certificate of formation; the certificate of filing (the secretary of state’s approval); the minutes of the first organizational meeting of members along with subsequent minutes of special meetings (if any) and annual meetings; company resolutions or grants of authority; the company agreement, as currently amended or restated; and any membership certificates that may have been issued (or at least a record of same).

Also: where are the official LLC records kept? Who is responsible for keeping them, and is access readily available? Is there a company book, i.e., a binder containing these? Failure of an LLC to keep organized and complete records is a warning sign for a potential assignee. This is true regardless of and aside from any statutory requirements for LLC record keeping.

A vital object of an assignee’s investigation should be the company agreement. The company agreement is essentially a partnership agreement among LLC members, so it will directly bind a prospective assignee . Is it valid? Is it a legal document of substance or is it a three-page printout from the internet that is not even relevant to Texas? Are provisions of the company agreement compatible with the intentions and goals of the assignee? What limitations does the company agreement impose (for example, restrictions on transfer of membership interests)? Can one easily re-sell the membership interest or are there hoops to jump through?

(4) Managers . It is operationally important to determine if the LLC is member-managed or manager-managed and, if the latter, to identity of the managers. Can the assignee work with these persons? Are they professional and competent? What is their track record?

(5) Member List . LLCs are required to keep current lists of members, their respective interests in the company, and a list of all contributions to the company. BOC Sections 101.501(a)(1)-(7). Fellow members of a smaller LLC are effectively your partners in the enterprise. It is good to know to know something about them.

(6) Contracts and Agreements with Third Parties . Any agreements with third parties that affect control, management, or operation of the LLC should be examined. Examples would be contracts with vendors or a property management agreement with a third-party management company. Is the LLC currently part of a joint venture with a different group of investors?

(7) Voting Agreements . These may or may not exist. Any one or more of the members may enter into voting agreements (including but not limited to proxies and pledges) that can affect control of the entity.

(8) Federal Tax Returns. Tax returns are important to verify how the LLC is taxed and how ownership is reported to the IRS. Tax returns and LLC records should be consistent in this respect. It is a good idea for a prospective assignee to have a CPA review the company’s tax returns.

(9) Texas Annual Filings . A prospective assignee should review the franchise tax returns and public information reports (PIRs) that must be annually filed with the comptroller’s office. Do these accurately reflect the LLC’s affairs? Are they diligently prepared and timely filed?

(10) Transactional Records . What property does the LLC own? Are warranty deeds in the name of the LLC duly recorded in the real property records? How are properties managed and who is responsible for doing so? What do the files and records look like—are they orderly or are they a mess? And what about completeness? Do files for rental properties contain all essential documents like warranty deeds, notes and loan agreements, deeds of trust, leases, appraisals, maintenance records, and so on? A specific person should be responsible for keeping such records at a designated location.

(11) Salaries, Draws, and Distributions. These should be examined to discover if there is a pattern of excessive or erratic compensation to managers or distributions to members. Is there a coherent schedule or plan? Are measures in place to insure that the LLC maintains sufficient working capital to fund existing and planned operations?

(12) Bank and Depository Accounts . Current and recent copies of account statements should be examined. Look for any unusual withdrawals or capital flows. Is the LLC adequately capitalized? Does it have an adequate capital reserve? Inadequate capitalization is the number one cause of small business failure.

(13) Records of Pending, Prospective, and Resolved Legal Actions . Is the LLC being sued? Has it been sued in the past? Do the managers have a history of shoddy or deceptive dealings? Is the LLC continually receiving DTPA notice letters from attorneys? Default letters from HOAs or appraisal districts? Does the company charter get periodically revoked (and then have to be reinstated) because the LLC fails to timely file its franchise tax return or PIR? Consider meeting with the LLC’s attorney and CPA. Require that confidentiality be waived in order to get a frank assessment of the situation.

(14) Best Practices Generally . It is important to ascertain whether or not the LLC is run with diligence, integrity, and in compliance with applicable law. What is the company culture with regard to best practices? Does the LLC have a regular business attorney and CPA to advise the managers? Or do the managers wing it on a DIY basis most of the time, counting on a surging market to cover their mistakes?

(15) Reputational Evidence . A prospective assignee may want to do some digging in order to evaluate the business and personal reputations of the managers and members. What is their professional history? The personal lives of the existing members may also be relevant: are any of them getting a divorce from a spouse who might turn into a hostile party? Was one of them just expelled from the country club for non-payment of dues? An internet search is, of course, the bare minimum but it may also be prudent to consider a private investigator (These are not just for the movies).

(16) Company Performance . How have the LLC’s investments fared, particularly over the last three years? What do the company accounts show and are these numbers verifiable? Does the spreadsheet match up with the checkbook?

Trends are an important part of value analysis. Try to reduce the LLC’s quarterly and annual results to line graphs for income and costs. Which way are these factors trending?

(17) Business Plan . Do the managers and members have specific goals or is their strategy more built around finding targets of investment opportunity? Is their plan realistic or pie-in-the-sky? What will the company likely look like in three years? Five years? Is a change in direction required?

The importance of thorough due diligence conducted during an adequate inspection period cannot be understated. Knowledge, as they say, is power. If one must sign a confidentiality or non-disclosure agreement in order to get relevant information on the LLC and its members, then that is what should be done.

CLAUSES AND PROVISIONS OF THE ASSIGNMENT

Assignments of interest generally.

All assignments of interest (regardless of the interest assigned) include—or should include—certain common clauses and provisions. After identifying the parties and the exact interest to be assigned, the document should state the consideration being paid; whether the consideration is nominal, cash, or a financed amount (secured or unsecured); recite both transfer and acceptance language; state whether the assignment is made entirely “as is” or instead with representations and warranties; state whether the assignee will have any recourse in the event certain post-assignment conditions are not met and identify the recourse mechanism; recite covenants and agreements of both parties that will result in the implementation of the transfer along with remedies for default if these measures are not carried out; a mutual indemnity clause; any special provisions agreed to by the parties; an alternative dispute resolution (mandatory mediation) clause; and conclude with various miscellaneous provisions that identify applicable law and venue, advise all parties to consult an attorney, set an effective date, and so forth.

A “Consent of Non-Member Spouses” should be appended if applicable. Exhibits to the assignment (pertaining to company assets and liabilities, for instance) may also be needed.

Representations and Warranties

An assignment may include a full set of representations and warranties (“reps and warranties”), limited reps and warranties, or no reps and warranties at all—in which case the assignment is made entirely as is and (in such cases) is almost always without recourse, meaning there is no defined remedy against the assignor-seller if the LLC membership goes sour for some reason. Representations and warranties may be made by assignor, assignee, both, or neither.

Core reps and warranties are basic assurances to which no reasonable party should object. Reps and warranties can get much more detailed and extensive from there. If attorneys are involved, the reps and warranties section of a contract may be heavily negotiated.

The assignor-seller’s goal is to minimize post-closing liability by transferring the membership interest “as is” to the maximum extent by including only a minimum number of reps and warranties. It should be noted that inclusion of the above-mentioned core items does not impair the ability of an assignor to assign an interest “as is.” For this reason, it is always somewhat suspicious when an assignor refuses to give any reps or warranties at all.

The assignee-buyer instead prefers a longer and more specific list of reps and warranties on the part of the assignor-seller. One of the goals of the assignee in the due diligence process is to ascertain, to the greatest extent practicable, the accuracy of reps and warranties that have been or will be made by the seller.

Examples of Reps and Warranties

Examples of basic reps and warranties would include assurances that each party, if a registered entity, is in good standing; the party has power and authority to enter into the transaction without joinder of others; and there exists no condition or circumstance that would render the transaction illegal or invalid or place the party in breach of an existing contract. Additional near-core items would include assurances that each party has performed adequate due diligence and has consulted an attorney before signing.

Both assignor and assignee should also want to include a statement that neither party is making or relying upon any reps or warranties that are not expressly set forth in the assignment. The goal is to prevent anyone from assuming anything or alleging that certain assurances were oral or implied.

Reps and Warranties: Duration and Default

Once reps and warranties are negotiated, it must be determined how long they will survive closing—if at all. 30 days? 90 days? Indefinitely?

A final issue in this area has to do with remedies for default in the event of breach. Attorneys frequently include a clause requiring that such default be a material (rather than a trivial) breach in order to be legally actionable. The issue is then raised, how does one define material ? One method is to impose a monetary floor, e.g., by confining assignor liability to issues that result in a loss or cost of (say) $10,000 or more.

Assignments Made “As Is”

As noted, an assignor-seller can include basic (limited) representations and warranties and still convey an LLC membership interest “as is.” Many business persons, including lawyers, do not adequately understand this. For example, stating that one has sufficient power and authority to enter into a transaction does not suggest any representation or warranty as to the item being conveyed. It is a core representation that should probably be included in every assignment.

The key to protecting the assignor is a thorough “as is” clause. Just as is true with real estate conveyances, the more thorough and extensive the “as is” clause, the better. One-liners will generally not do. This is particularly true if there have been oral or email negotiations over a period of weeks or months. The goal should be not only to convey the interest “as is” but also to entirely exclude any statement that cannot be expressly found in writing within the four corners of the assignment instrument.

Covenants and Agreements of the Parties

Covenants and agreements address the legal obligations of the parties going forward—specifically what actions they are required to take in order to implement the assignment. Covenants and agreements of the assignor-seller would include, for example, an obligation to promptly endorse and deliver to the assignee-buyer any certificates evidencing the membership interest in question.

The assignee-buyer should also covenant and agree to abide by the company agreement and other governing documents. Since Texas is a community property state, the spouse of a new assignee should also be asked to sign off on this commitment. The best practice is to secure the signatures of both the new assignee and any non-member spouse not only on the assignment but on the company agreement itself.

Additional covenants and agreements of the parties may be (and usually are) included. This is another area that is subject to extensive negotiation and customization to the circumstances.

Recourse by Assignee upon Occurrence of Specified Conditions

The option for some form of limited or conditional recourse may be included in any assignment of interest. In the case of an LLC membership interest, the assignment could provide that, upon occurrence of certain conditions, the assignee would have the right to re-convey the membership interest and receive return of all or part of the consideration. Examples of such conditions would be any adverse event—a negative outcome in a pending lawsuit or zoning proceeding; condemnation of certain LLC property; failure of a pending joint venture; or the discovery that any representations or warranties of assignor were materially false or deceptive when made. The availability of a recourse mechanism is generally time-limited, say for 90 days after closing. Some assignments might also refer to this recourse mechanism as a right to rescind.

In any assignment instrument, the alternative to full or limited recourse is no recourse at all by the assignee-buyer. For example, real estate notes are often sold without (either full or limited) recourse against the assignor-seller in the event that the borrower on the note defaults. In such a case, absent any provision for recourse, the assignee-buyer of the note would then be in possession of a non-performing asset. The remedy is not against the assignor, but to pursue the debtor directly.

Mutual Indemnity

Ideally, and unless there are special circumstances, the assignor and assignee should release and indemnify one another for LLC-related actions, claims, liabilities, and obligations occurring before and after (respectively) the effective date of the assignment. Indemnity provisions are useful and worthwhile, but one needs to clearly understand their limitations. They are not a covenant not to sue.

Non-Compete and Non-Disclosure Provisions

Sale by a departing LLC member to another member may raise concerns that the departing member will utilize proprietary and confidential information in order to compete with the company in the same line of business within the same geographical area. Agreements regarding intellectual property and non-competition are typically stand-alone full-length contracts; nevertheless, it is possible to include compact and enforceable IP and non-compete provisions that fit smoothly and purposefully into a sale and assignment of LLC membership interest. Failing to do this can be an error with serious consequences.

Corporate Transparency Act and FinCEN Reporting

The Financial Crimes Enforcement Network (FinCEN), an arm of the Treasury Department, is charged with rulemaking to enforce the Corporate Transparency Act which was passed in 2021. The CTA contains sweeping requirements regarding the reporting of beneficial interests in LLCs and corporations.

To the extent that a sale and assignment of LLC membership interest constitutes a change in beneficial ownership, then a report to FinCEN will likely be required. The assignment instrument should expressly address the applicability of the CTA and designate which party (usually the assignee) will be responsible for filing a supplemental FinCEN report.

If the burden of FinCEN reporting falls on the assignee, then the assignor may want to include an indemnity clause for added protection. The assignor may also want to limit liability for past FinCEN reporting.

Alternative Dispute Resolution: Mandatory Mediation

Since we live in a litigation nation, it is highly advisable to include a provision that requires mediation prior to commencing legal action. Approximately 80% of mediations result in a settlement. In other words, mediation works, at least most of the time.

A mediation clause should require the conflicting parties to first confer in good faith and attempt to resolve the dispute in a way that accommodates the legitimate interests of both sides. If agreement is reached, it should be reduced to a signed writing and implemented. If not, the parties should then agree to formally mediate the dispute before a certified mediator prior to resorting to litigation or filing any complaint with a governmental or administrative agency.

A mandatory mediation provision should also state where the mediation will be held (which city or county) and for how long (mediations are usually either a half-day or a full day). Each party should commit to bearing its own fees and costs until the mediation is concluded.

Special Provisions and Stipulations

It is useful to include a catch-all special provisions section that allows room for terms that may be specific to the subject transaction and its unique circumstances. These special agreements and provisions frequently arise and this is the place to insert them.

Stipulations are a slightly different concept. For example, an assignment of LLC membership interest may involve a new list of members. It may also require a re-allocation of percentage interests among the remaining members. So it may be beneficial to include a stipulation that after conclusion of the assignment, the new membership list (with accompanying revised percentage interests) will be as described in Exhibit A. This usefully erases any doubt as to the overall final outcome of the transaction.

As previously noted, a special meeting of members is an important companion document to the assignment of LLC membership interest. The meeting, signed by all affected parties, can not only approve the assignment but mention issues such as record date, a general ratification of the assignment and the new member list, and also authorize issuance of new membership certificates.

No Reliance and No Representation Clauses

The assignor-seller (in particular) may want to make it clear that the assignment is made and accepted by the assignee-buyer only after a proper due-diligence investigation and without reliance on any statements or assurances (especially oral ones) made by the assignor-seller or its agents.

Wrap-Up Provision Relating to Execution and Delivery of Documents and Records

It would be an oversight if an assignment of LLC membership interest failed to mention possession and delivery of company books and records, an omission that has resulted in more than a few lawsuits. An agreement to execute and deliver such additional and further documents as may be reasonably necessary to effectuate the purposes of the assignment should cover and include any affected LLC records, including the company book and accounting records. These may need to be transferred to a new assignee-owner or returned to the assignor-seller after due-diligence inspection.

Clients often do not understand why a sale and assignment of LLC membership interest cannot be a simple, one-page document. It is hoped that this article will clarify the answer to that question.

Information in this article is provided for general informational and educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. No attorney-client relationship is created by the offering of this article. This firm does not represent you unless and until it is expressly retained in writing to do so. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well.

Copyright © 2024 by David J. Willis. All rights reserved. Mr. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, www.LoneStarLandLaw.com .

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LLC Membership Interest Transfer Agreement: Everything You Need to Know

An LLC membership interest transfer agreement must be filled out correctly and completely to protect members' interest. 3 min read

An LLC membership interest transfer agreement must be filled out correctly and completely to protect members' interest.

LLC Membership Interest Assignment

An LLC membership interest assignment document is used when a member of a limited liability company wants to transfer all of his or her interest in the business to another party. This document is used when an LLC member is leaving or wants to give up his interest in the company altogether. The law will allow the ownership interest to be transferred in some cases. 

However, this transaction means the new owner won't have a right to run the LLC. He or she will only have a share of the profits and losses. Most states require Articles of Organization to be filed when forming a limited liability company. This is in compliance with the state's laws. A limited liability company can be created and operated for any reason the business chooses, as long as they are within the law.

For example, if an individual runs a small dog-walking business, this person might want to form an LLC with a co-owner so they're both protected. If one owner no longer has an interest in the LLC, he can use the LLC Membership Interest Assignment so that interest can be assigned to someone else.

These documents are short and easy to fill out. All the information that's necessary to transfer an LLC is included. There is a spot for both the person who receives the interests (the assignee) and the person who transfers the interest (the assignor) to complete the document .

The LLC Membership Interest Assignments are governed by the laws in each state; federal law isn't involved with these. To change the LLC Membership Interest Assignments form, another form is filled out online. Once complete, it can be sent in PDF and Word formats for no charge. It can be modified and used again in the future.

LLC Membership Interest Assignment: How To Use

An owner involved in an LLC is called a member. The member's interest in the limited liability company is called the ownership stake. If any member of the LLC needs or wants to transfer ownership rights , this is done with an assignment of interest.

The LLC Membership Interest Assignment is used when a member wants to transfer his ownership in an LLC. It also can be used if a person wants that interest transferred to them, assuming the current member agrees to this. Both parties should understand that the membership interest will be reassigned. Both parties should keep a copy of the agreement on file.

The LLC Membership Interest Assignment requires this information:

• The identities of both the parties as well as additional details of the membership interest.
• Whether this interest comes with the right to vote.
• What the percentage of the membership interest is.

There is an addendum at the end of the LLC Membership Interest Assignment that is optional. This is used in case the rest of the LLC members need to give full consent to the transfer.

This form needs signatures from the party receiving the document and the party who is assigning the interest. If there are only two total members, meaning just one will be left after the transfer, the process of transfer is easy. There are several forms to fill out, but the member essentially gives all his rights in the LLC to the member who remains. This transfer process differs depending on which state the transfer takes place in.

The majority of LLC statutes distinguish between member rights and member interests. The essential difference is the transferable interest of the member often only includes the right to participate in financial interests and other distributions as well as a share of profits or losses. They do not have a right to participate in control and management.

Usually, the member's financial interest can be assigned freely, given there aren't restrictions stated in the operating agreement. For example, in Washington state, an individual or entity that's assigned the member's interest can't participate in managing the LLC. The exception to this is if the assignee is admitted as a member through agreement by all the other members or through a process listed in the operating agreement.

If you need help with an LLC membership interest transfer agreement, 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.

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Ever Heard of a Letter of Interest? It Could Score You a Job at Your Dream Company

You’re dying to work for Company X. I mean, it’s basically your life’s mission: Work for Company X.

You love their products, their brand, and just about everything you hear about them. And while you visit their careers page nearly every day, you’ve yet to find an open role that’s just right for your skills, experience, and career goals.

What should you do? Should you keep waiting and waiting for something to pop up, or is there a more proactive way to go about getting on their radar?

You can write a little thing called a letter of interest.

Unlike a cover letter, which you use to introduce yourself and make clear your fit for a specific position, a letter of interest (also sometimes referred to as a letter of intent ) is more like a pitch letter. You’re going to introduce yourself, of course. But instead of targeting a certain role, this is your opportunity to spell out what you love about the organization , and sell them on why you’d be an asset to it.

It’s the perfect option if you feel down to your bones that you have something of great value to offer to a particular organization, but you haven’t seen a posting for a job that’s quite right for you.

How, specifically, can you write a letter of interest? Here are a few quick tips (plus, some samples of what it should look like):

1. Begin With Why You Love the Company

People love from-the-heart flattery, whether it’s about themselves or the companies they represent. And hiring managers want to hire people who don’t just want a job but believe in and are excited about what their organization is doing and stands for.

That being the case, you’ve got a great opportunity to draw the reader in by kicking your letter of interest off with a quick statement that spells out what you love most about the organization.

Maybe you purchase and use their product regularly, maybe you read their newsletter daily, maybe you admire their leadership team (and religiously follow them on social media)—whatever it is, start off with the good stuff that shows you know what they’re all about. Just avoid beginning with something super generic or vague like, “I love your organization and what you do” or “I admire your company’s mission” or “I’m a big fan of [Company]”—you know, anything that can be said about any company. Get specific right away and toss these throw-away lines aside.

What That Looks Like

Dear [Hiring Manager’s Name],

As a product development leader, I know innovation when I see it. And when I see it, I pay attention. You’re fearlessly pushing into new terrain with artificial intelligence and virtual reality, and I’d love to be a part of it.

2. Tell Them Who You Are (and What You Specialize In)

Next, shift into the “here’s who I am and how I fit into your equation” portion of the letter. This is your shot to introduce yourself as an incredibly interesting human being, and someone who might be well suited for this organization. Keep this part short and sweet, but make sure they know right out of the gate how you align with their business.

I’m Jill Smith, a curious and resourceful product innovator and program manager. I’ve built a career around delivering game-changing products, systems, and solutions on behalf of some of the biggest brands in the world, with specific expertise in SaaS and AR/VR.

3. Share a Few Thoughts on How You Might Help Them

Then, dive into the specifics. Do you have some ideas for how you could help this organization? Do you have specific skills that make you uniquely qualified to grow their business? Share them in this section.

Because you’re not applying to a specific role, this is where you showcase what value you’d bring. Even though the company may not be hiring for your dream job at the moment, if nothing else, you immediately put yourself on their radar as someone they could hire down the road should they ever decide to expand their team. Best case scenario, you open the door for them to create a role just for you.

I can help you take a design from a napkin drawing through every step of the development process. Or I can support the specific areas where you need a bit of counsel, problem solving, or leadership.

I’m particularly interested in supporting you with your next-generation content creation products, but I’m quite open to discussing any product development or program management assignment that may benefit from a change agent, a workhorse, or just an extra pair of hands.

4. End With an Invitation to Chat

And last but certainly not least, close out your letter of interest with a specific ask. What do you want the outcome to be? What, exactly, are you asking for? Maybe you do have a specific job in mind (either one they’re hiring for or one you’d like to create), or maybe you’re just looking to chat with their team to see where you’d fit in. Either way, spell this out at the end of your letter.

I’d love an opportunity to learn more about your biggest design and development goals and challenges and share specific thoughts on how I can help you continue your impressive journey to becoming one of the industry’s most notable innovators.

Thank you for your time, and please let me know if there’s any additional information I can provide for you.

Best, [Your Name] [your email/phone number/LinkedIn profile URL]

Once you have your letter of interest written (and edited by a friend), do a bit of sleuthing to determine the likely hiring manager for your department of interest. Address your letter to that person (do not use “To Whom it May Concern” ), and let ’er rip. Pop your letter in the body of an email or add it as an attachment —but don’t do both.

You may also want to point the recipient to your LinkedIn profile (which should be updated and robust), so they can take a quick peek at your background without feeling like you’re shoving your resume at them too early in the courtship.

And then be sure and follow up within about a week if you haven’t heard anything from them.

It may feel scary when you first try to send out a letter of interest, but you’d be amazed by how effective it is. Fortune does, indeed, often favor the bold. So why not be bold?

LLC Membership Interest Assignment

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An LLC Membership Interest Assignment is a document used when one member of an LLC, also known as a limited liability company, wishes to transfer their interest to another party entirely. LLC Membership Interest Assignments are often used where a member in an LLC is leaving or otherwise wants to relinquish the entirety of their interest in the company.

An LLC Membership Interest Assignment normally happens well after the LLC has already been operating . To form a limited liability company in most states, any party must begin with Articles of Organization (sometimes called Certificates of Formation or other varying names). These documents will get the LLC formed and in compliance with state laws.

A limited liability company can operate and be formed for any reason (except illegal ones). For example, even if it is a small business, like dog-walking, the owners might want to have an LLC to protect themselves. If so, and if any owner decided to one day relinquish their interest in the LLC , that owner could use this LLC Membership Interest Assignment to assign it to another person.

LLC Membership Interest Assignments are short, relatively easy documents which contain all the information needed to transfer an interest in an LLC.They contain a place for both the person transferring the interest (called the Assignor) and the person receiving the interest (called the Assignee) to execute the document.

How to use this document

This document can be used when any party would like to transfer the ownership of an interest in an LLC or when any party would like a membership interest in an LLC transferred to them, as long as the current owner of the membership interest agrees. It should be used it when both parties understand that the membership interest will be completely assigned and wish to create a record of their agreement, as well as a document that the LLC will likely keep on file.

This document will allow the form-filler to input details of the identities of both parties, as well as the details of the membership interest, such as percentage and whether or not it comes with voting rights . It also has an optional addendum at the end, in case full consent is needed from all the rest of the members of the LLC .

Please keep in mind that this form requires both signatures , from the party assigning the interest and the party receiving it.

Applicable law

LLC Membership Interest Assignments are subject to the laws of individual states . There is no one federal law covering these documents, because each individual state governs the businesses formed within that state.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

Guides to help you

• How to Sell your Percentage in an LLC
• How to Sell your Business
• How to Transfer Business Ownership

Other names for the document: Assignment of Interest for LLC Member, Interest Assignment for LLC Membership, LLC Interest Assignment Agreement, Member Interest Transfer for LLC, Membership Assignment for LLC

Country: United States

Business Structure - Other downloadable templates of legal documents

• Articles Of Organization
• Shareholder Agreement
• Articles Of Incorporation
• Partnership Agreement
• Business Sale Agreement
• Corporate Bylaws
• Stock Sale and Purchase Agreement
• LLC Membership Purchase Agreement
• Founders' Agreement
• Business Merger Agreement
• Limited Partnership Agreement

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Letter of Interest for a Job: How To Write [+ Samples]

Learn how to write a letter of interest for a job. Find letter of interest samples, tips, and a customizable template to show that you are the perfect candidate.

That awful feeling after going through countless job postings with no luck. Nothing fits. Nothing is available.

Sound familiar?

A lot of people have been there.

The job search can be stressful and exhausting and can feel fruitless. No matter how hard you try, there seems to be a closed-door in the way.

A letter of interest may prove to be the key that unlocks this door.

By the end of the article, you will have all the information that you need to write a great letter of interest on your own.

What is a Letter of Interest?

People may often mistake a letter of interest for a cover letter, but we will explain the distinctions.

A letter of interest (also known as a “letter of inquiry” or “prospecting letter”) can be sent to a company that may be hiring but just doesn’t have a specific job listing relevant to you yet.

It is an unsolicited attempt to get your foot in the door at an organization.

Sending a letter of interest is a fantastic way to at least get you on the radar of your potential employer, and can even lead to employment.

Applying for jobs that are not posted yet will involve a lot less competition.

If you write an effective letter of interest, you might be rewarded with a job that others didn’t even know existed.

Most employers are interested in locating strong candidates.

Even if there isn’t a job open at the time, you can get your foot in the door.

A letter of interest is one of the best ways for you to accomplish this when a job opening is not formally posted.

The worst that could happen is that the letter will get discarded.

However, if it lands you a job, that was definitely time well spent.

Letter of Interest vs. Cover Letter

A cover letter is a document that you send with your resume when applying to specific jobs.

Those specific jobs will have openings and an advertisement.

You explain why you are a good candidate for that specific job.

A letter of interest can be submitted at any time to any company. The organization does not need to have jobs open, or even to be hiring at the time.

You can see it as a means by which you can introduce yourself to a company.

As opposed to applying for a specific job, a letter of interest seeks to demonstrate that you would be an asset to the company in general.

(If you need information on how to write a cover letter, check out  How to Write An Amazing Cover Letter .)

How to Write a Letter of Interest

A poorly written letter of interest is not going to harm your future prospects, but it will be time wasted.

Invest your time wisely, make a good impression with your letter of interest, because a first impression is crucial in this case.

What You Need Before Writing

Obviously, you need to have the specific contact information of your recipient. An example of who to contact may be an executive in the department that you are interested in.

You can find this information through LinkedIn, the company website, their social media presence, or through networking.

Additionally, if you have a contact within the company, it will be very helpful for them to give you a recommendation on who to contact. Being informed about the company, its competitors, targets, ethos and similar will only prove to be useful.

Do your research!

How to Start a Letter of Interest

The best way to begin a letter of interest? With a hook.

Just getting in touch is not enough.

You have to show that you are worth the time.

If you submit a letter with a bland opening, it will be put to the side.

Remember that the recipient is not expecting to hear from you.

Catch the attention of your reader right away.

A short and powerful statement is more than enough.

As an accountant, the following sentence makes perfect sense:

I have worked as an accountant for 12 years. I am driven, a good team-player, detail-oriented, focused and hard-working.

But this is a lot more eye-catching:

I spearheaded a 60% raise in efficiency in my department.

As a teacher, it might be easy to say this:

Over the years, I have gained a better understanding of what works and what doesn’t work.

But it is a lot more appealing to just put a number out there, like this:

I improved the average exam grade of my students by 35%.

The rest of the letter doesn’t matter if it is not read.

Save fine details for when you have more words.

So it is crucial to make it obviously worth reading from the start.

Are you having a hard time thinking about a good hook? Look at your resume and see examples of your key achievements.

What to Include in Your Letter of Interest

The quality of your letter of interest will be the crucial difference between getting your foot in the door and remaining behind it.

Because of this, here is a list of things to remember when writing your letter of interest:

• Know the needs of where you are applying . By knowing the needs, you can show that you are the ideal fit to meet all of these needs. It does not help you to just give bland allusions to your skills. Show exactly how you are a great fit. Back up what your skills with specific proof.
• Always tailor your letter to the recipient. It may not be on the same level as a cover letter applying for a specific job. However, you have a recipient, so write with them in mind.
• Concentrate on value. Show that you add value, and show why they value the skills that you have. Show that you check the boxes.
• Ensure that the letter has a clear intro, body, and conclusion. If everything that you write is not arranged in a correct and tidy format, you make your letter less appealing and attractive.
• Quality over quantity. When choosing what to say, it is better to give highlights than an extensive list. Key accomplishments are preferred to a lot of smaller details.

These details are not complicated.

They make a huge difference, though.

Remember these, and you will certainly be in a great position to write a letter of interest that actually works.

What Not to Include in Your Letter of Interest

There are many ways in which you can make your letter of interest a bland read.

With a limited word count, every word has to matter.

You should avoid the following at all costs when creating your letter of interest:

• Too much text. For a note that is not expected, the recipient is incredibly unlikely to read what you write if you are very long-winded. Keep things clean and concise.
• Being vague about details. You are trying to convince the reader that you are the ideal fit for a position that may come up. Therefore it does you no favors to be vague. Say exactly how you are an ideal fit, say how you are exactly what they need.
• Irrelevant details. Your two years working as a barista when you were in your early twenties is great. But when you are in your late thirties, writing to the VP of Finance, you have no need to go into these details.
• Being vague about the recipient. Do not address the letter “to whom this may concern”. You are not getting any bonus points that way. Also do not address it to “Dear Mr/.Ms. Manager”.
• Being boring or lazy. Mistakes or bland content are not going to help your results at all.
• Not tailoring your letter of interest. It is a short letter. If it appears to the recipient that it is the same document that you sent to multiple companies, it will harm how it is received. Show that it is a letter written specifically to the one recipient.

Keep your letter of interest concise and to-the-point.

How Long Should a Letter of Interest Be?

You do not need to ramble for a long time. In fact, doing so would be detrimental. Find a balance between conveying the essential information, and keeping it brief.

However,  you still want to show that you would be a great addition.

It is not useful to sell yourself short, but a letter that is too long will put its reader off.

Consequently, it is advised to keep your word count to about 200 words.

How to Prepare If This Leads to an Interview

You should look to close your letter of interest with an invitation to talk.

If you are taken up on that, be prepared.

On the occasion that the company wants to know more about you, be ready to substantiate any claims that you have made.

Also, be ready to provide a more extensive background on yourself.

In addition to this, you definitely want to prove that you have done your research on the company.

It is a lot easier to look like you have done your homework in a 200-word document than in a conversation.

It may not be the same kind of interview as one for a specific job, but you can still expect your individual credentials to be explored.

(For more assistance on preparing for an interview, read our article Common Interview Questions: 50+ Questions and Answers .)

Letter of Interest Samples

Before we provide a number of letters of interest templates, we have a few last things for you to bear in mind.

Throughout your letter, consider if it would catch your interest.

If you don’t personally think it is engaging when proofreading it, you cannot expect the recipient to feel differently.

Ask friends and family for their opinions as well.

These letters of interest examples will help you prepare a document that is eye-catching.

Additionally, remember that this does not mean that you should end your hunt for a job.

Sending a couple of letters is not an acceptable reason to stop looking through postings.

In the section below, you will see an effective and an inadequate method of writing a letter of interest.

General Letter of Interest Sample

Here is a sample of an effective letter of interest:

In the above letter, all of the guidelines are followed.

The letter of interest immediately hooks the reader with a key achievement.

It backs up the achievement and shows an understanding of the employer’s needs.

It shows that the applicant can fulfill this need.

Towards the end, the applicant seeks to arrange for the conversation to continue.

There are clear guidelines to follow within your letter to boost your letter’s effectiveness. Check out this template:

Dear [Name of recipient],

[Insert your hook to catch attention.]

[Back up your hook and show an understanding of the needs of the employer.]

[Show that you can meet that need.]

• [Use bullet points to highlight accomplishments.]

I have worked for [current company] for [time] and have been pivotal in bringing the company forward in this time. I think that I would be an excellent fit to do the same with [Company]. Attached is my resume to give you a more complete idea of my aptitude.

I would love to have the opportunity to communicate with you further about myself and [Company]. If we could schedule a call or meeting to discuss [Company]’s goals going forward, I would be delighted to do so.

Many thanks for your time. I hope to hear back from you.

[Sincerely/Kind Regards],

[Your Name]

For comparison, here is an ineffective and inadequate letter of interest sample:

It just doesn’t work.

There is no hook. There is no proof.

When the claims are substantiated in this letter, it is with feeling rather than fact.

The company’s needs are not shown to be understood.

At the end of the document, saying “let me know” puts the power entirely in their hands.

Imagine the next step like a carrot on a stick. Show that you can meet their needs, and then say that you would love to have the opportunity to talk more.

Even though the inadequate example is shorter than the effective example, the effective example is more enticing to read by far.

White space, bullets, and an eye-catching hook make the effective example a far more attractive read.

Keep reading to see good letter of interest examples for some other positions or in some other contexts.

Teaching Letter of Interest Sample

Here is a sample letter of interest that a teacher can use:

As with the good example above, all the bases are covered.

For a school that wants to improve achievement, a teacher coming out and plainly saying that they have already accomplished that is a lot better than taking a chance on someone else.

Letter of Interest for a Promotion Sample

Now we get to letter of interest examples that are a bit different.

You are either already working in the company you are writing to, or have little to no previous work experience.

Do not fret. There are examples just for you as well.

Below is an example of what a letter of interest for a promotion might look like:

See how this is different?

More emphasis is placed on how you have already added value to the company.

Not just that, but the achievements listed are geared towards what they are applying for. In this case, these achievements are leadership-oriented.

You are not someone off the radar trying to catch this employer’s attention.

You aren’t just on the radar, you are already employed.

That is why it was said earlier that your letter of interest must be tailored to who will be reading it.

Letter of Interest for an Internship Sample

As a student, your work experience is likely quite limited.

However, you can still have key achievements.

From volunteering to university societies, remember to talk yourself up!

Below is an example of how you may do this:

Like the other samples, this example is flexible.

Are there potentially administrative apprenticeships at a certain company?

Then base your letter of interest on this example, and tailor it to your recipient.

Key Takeaways

To briefly sum up the key information that we have covered:

• Tailor your letter of interest specifically to who will be reading it.
• Include a hook to make your letter eye-catching.
• Substantiate every claim you make.
• Show a clear understanding of the company’s needs, and how you can fulfill it.
• Invite them to continue the conversation.

And that is it!

You are now informed as to how to submit a quality letter of interest that can lead to a potential employer wanting to see your resume.

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