Disposition of Membership Interest Clause Samples

The Disposition of Membership Interest clause governs how a member of a company can transfer, sell, or otherwise dispose of their ownership interest in the business. Typically, this clause outlines the procedures for obtaining approval from other members, any rights of first refusal, and the conditions under which transfers are permitted or restricted. Its core function is to control changes in ownership, ensuring stability and protecting the interests of existing members by preventing unwanted or unauthorized transfers.
Disposition of Membership Interest. Section 10.1 The Member’s Membership Interest is transferable either voluntarily or by operation of law. The Member may dispose of all or a portion of the Member’s Membership Interest: (a) Upon the Transfer of the Member’s entire Membership Interest, other than a Transfer as a pledge or security interest, the Member shall cease to be a Member and shall have no further rights or obligations under this Agreement, except that the Member shall have the right to such information as may be necessary for the computation of the Member’s tax liability, if any. Notwithstanding any provision of the Act to the contrary, upon Transfer of the Member’s entire Membership Interest, other than a Transfer as pledge or security interest, the transferee in such shall, without further action, other than completion of Transfer documents, become a Substitute Member and obtain all rights appurtenant to a Membership Interest. The admission of an assignee member as a Member shall be conditioned upon the assignee’s written acceptance and adoption of all of the terms and provisions of this Agreement. (b) Upon the Transfer of a portion, but not all, of the Member’s Membership Interest, other than a Transfer as a pledge or security interest, the transferee shall become an additional member. In such case, this Agreement and all other relevant documents, including the Articles of Organization, shall be amended to reflect the change in the number of members. (c) Upon the Transfer of all or any portion of the Member’s Membership Interest (referred to in this Section 10.1(c) as “Collateral”) as a pledge or security interest, (i) the purchaser(s) of all or any portion of such Collateral at foreclosure of such pledge or security interest, and/or (ii) the transferee(s) or assignee(s) of all or any portion of such Collateral in lieu of foreclosure of such pledge or security interest, shall become member(s) of the Company without any requirement of the consent of the Member to such purchaser(s), transferee(s) or assignee(s) becoming member(s) of the Company and without any other or further action (other than the completion of any applicable Transfer documents), and the Member shall cease to be a Member and shall have no further rights or obligations under this Agreement, except that the Member hall have the right to such information as shall be necessary for the computation of the Member’s tax liability, if any. If, as a result of such foreclosure or such transfer in lieu of foreclosure, there is...
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Disposition of Membership Interest. The Member’s Interest is transferable either voluntarily by the Member or by operation of law. The Member may dispose of all or a portion of the Member’s Interest. Upon the transfer of the Member’s Interest, the transferee shall be admitted as a Member at the time the transfer is completed, subject to Section 11.03.
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Disposition of Membership Interest. In the event a Member should desire to dispose of his or her Membership Interest in the Company, the following provisions will apply:
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Disposition of Membership Interest 
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Related to Disposition of Membership Interest

  • Transfer of Membership Interest The Sole Member may Transfer any part or all of its rights and interest (including, but not limited to, its Capital Account) in the Company (each a “Membership Interest”) now owned or hereafter acquired to any Person, and the transferee of such Membership Interest shall become a Member of the Company.

  • Transfer of Membership Interests (a) The Member may transfer its Membership Interest, in whole but not in part, but the transferee shall not be admitted as a Member except in accordance with Section 6.07. Until the transferee is admitted as a Member, the Member shall continue to be the sole member of the Company (subject to Section 1.02) and to be entitled to exercise any rights or powers of a Member of the Company with respect to the Membership Interest transferred. (b) To the fullest extent permitted by law, any purported transfer of any Membership Interest in violation of the provisions of this LLC Agreement shall be wholly void and shall not effectuate the transfer contemplated thereby. Notwithstanding anything contained herein to the contrary and to the fullest extent permitted by law, the Member may not transfer any Membership Interest in violation of any provision of this LLC Agreement or in violation of any applicable federal or state securities laws.

  • Membership Interest The Member shall own one hundred percent (100%) of the membership interests in the LLC, and all profits and losses shall be allocated to the Member.

  • Assignment of Membership Interest A Member may not assign the Member’s interest in the Company except with the written consent of all the other Members of record. Any such consent to assignment automatically entitles the assignee to become a Member. A Member’s membership interest may be evidenced by a certificate of membership interest issued by the Company.

  • Transfers of Membership Interests 8.1. A Member may withdraw from the Company at any time by giving Notice of withdrawal to the Manager at least 180 calendar days before the effective date of withdrawal. Withdrawal will not release a Member from any obligations and liabilities under this Agreement accrued or incurred before the effective date of withdrawal. A withdrawing Member will divest the Member’s entire Membership Interest before the effective date of withdrawal in accordance with and subject to the provisions of this Article VIII. 8.2. Except as expressly provided in this Agreement, a Member will not Transfer any part of the Member’s Membership Interest in the Company, whether now owned or later acquired, unless: (a) the other Members unanimously approve the transferee’s admission to the Company as a Member on that Transfer; and (b) the Membership Interest to be Transferred, when added to the total of all other Membership Interests Transferred in the preceding 12 months, will not cause the termination of the Company under the Code. No Member may Encumber or permit or suffer any Encumbrance of all or any part of the Member’s Membership Interest in the Company unless the Encumbrance has been approved in writing by the Manager. Approval may be granted or withheld in the Manager’s sole discretion. Any Transfer or Encumbrance of a Membership Interest without that approval will be void. Notwithstanding any other provision of this Agreement to the contrary, a Member who is a natural person may Transfer all or any portion of his or her Membership Interest to any revocable trust created for the benefit of the Member, or any combination between or among the Member, the Member’s spouse, and the Member’s issue, provided that the Member retains a beneficial interest in the trust and all of the Voting Interest included in the Membership Interest. A Transfer of a Member’s beneficial interest in the trust, or failure to retain the Voting Interest, will be deemed a Transfer of a Membership Interest. 8.3. If a Member wishes to Transfer any or all of the Member’s Membership Interest in the Company under a Bona Fide Offer (as defined below), the Member will give Notice to the Manager at least 30 days in advance of the proposed sale or Transfer, indicating the terms of the Bona Fide Offer and the identity of the offeror. The Company and the other Members will have the option to purchase the Membership Interest proposed to be transferred at the price and on the terms provided in this Agreement. If the price for the Membership Interest is other than cash, the fair value in dollars of the price will be as established in good faith by the Company. For purposes of this Agreement, “Bona Fide Offer” means an offer in writing setting forth all relevant terms and conditions of purchase from an offeror who is ready, willing, and able to consummate the purchase and who is not an Affiliate of the selling Member. For 30 days after the Notice is given, the Company will have the right to purchase the Membership Interest offered, on the terms stated in the Notice, for the lesser of: (a) the price stated in the Notice (or the price plus the dollar value of noncash consideration, as the case may be); and (b) the price determined under the appraisal procedures set forth in Section 8.8. If the Company does not exercise the right to purchase all of the Membership Interest, then, with respect to the portion of the Membership Interest that the Company does not elect to purchase, that right will be given to the other Members for an additional 30-day period, beginning on the day that the Company’s right to purchase expires. Each of the other Members will have the right to purchase, on the same terms, a part of the interest of the offering Member in the proportion that the Member’s Percentage Interest bears to the total Percentage Interests of all of the Members who choose to participate in the purchase; provided, however, that the Company and the participating Members may not, in the aggregate, purchase less than the entire interest to be sold by the offering Member. If the Company and the other Members do not exercise their rights to purchase all of the Membership Interest, the offering Member may, within 90 days from the date the Notice is given and on the terms and conditions stated in the Notice, sell or exchange that Membership Interest to the offeror named in the Notice. Unless the requirements of Section 8.2 are met, the offeror under this Section 8.3 will become an Assignee, and will be entitled to receive only the share of Profits or other compensation and the return of Capital Contribution to which the assigning Member would have been entitled.