Membership Interest Purchase Agreement
(MA LLC)

Summary

This membership interest purchase agreement template is for use in a transaction where a member of a Massachusetts limited liability company is selling its membership interest to an arm's length buyer, who becomes a member of the company by assignment. This template contains practical guidance, drafting notes, and alternate clauses. This template is generally applicable without regard to industry; however, the specific nature of the assets of the company in which the membership interests are being acquired should be considered when preparing this template, and additional industry specific representations added as needed. Membership interest purchase agreements are generally prepared by the buyer's counsel, as such, this template is generally pro-buyer, but also includes drafting guidance for the seller. This template contemplates one member selling 100% of its interests in the company while there is still an additional member of the company. If the sale of the membership interests in the company is resulting in the sale of the company and being used as a structure to acquire an operating business or an asset sale, see Membership Interest Purchase Agreement (Long Form) (Pro-Buyer) (DE) which may be adapted for the sale of a Massachusetts limited liability company. The Massachusetts Limited Liability Company Act (MA LLCA) provides the default terms of formation, operation, dissolution, and other governance matters for limited liability companies. The MA LLCA allows many of these terms to be altered by a written operating agreement or other written documentation. Mass. Ann. Laws ch. 156C, § 21. Pursuant to Mass. Ann. Laws ch. 156C, § 39, a membership interest in a Massachusetts limited liability company interest is assignable in whole or in part except as otherwise provided in the operating agreement. The assignee of a member's limited liability company interest has no right to participate in the management of the business and affairs of a limited liability company except in accordance with the terms of the operating agreement or upon the approval of all of the members except the transferring member. Unless otherwise provided in the operating agreement and except to the extent assumed by agreement, until an assignee of a limited liability company interest becomes a member, the assignee has no liability as a member solely as the result of the assignment. See Mass. Ann. Laws ch. 156C, § 39. An assignee who has become a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the operating agreement and the MA LLCA. See Mass. Ann. Laws ch. 156C, § 41. It is important for counsel to review the terms of the operating agreement and other governing documents of the company to confirm the necessary internal approvals for this sale of the membership interests contemplated by this agreement have been obtained. For a consent template for a Massachusetts limited liability company that may be adapted for use in connection with a membership interest sale, see Written Consent of Members in Lieu of Organizational Meeting (Member-Managed) (MA LLC). For more information on membership interests in a Massachusetts LLC, see Ownership Interests (MA LLC).