Legal Question in Business Law in Connecticut

In Connecticut what is the best way to transfer ownership on a Restaurant LLC type business between family members?

Asked on 5/28/17, 5:39 am

1 Answer from Attorneys

Roman Fichman Esq. Law Practice of Roman Fichman Esq.

Unless you are transferring an LLC membership between two spouses, all other "transfers" are not really transfers, rather they are sales. And as a sale they are subject to taxes, so careful planning is very important.

When selling a membership interest in an LLC there are three main areas to consider: taxes, liability, control (TLC):

When it comes to taxes there are different techniques that can be used. If it is between a parent and a child then estate planning can be used to facilitate such sale. If both parties are willing to have the transition take several years, then incentive equity can be used to mitigate the taxable impact.

As far as liability, the buyer needs to be aware of any existing liabilities (known and unknown) that the business may have. Finally, if it is not a clean cut break where the seller severs off all relations to the business then appropriate safeguards need to be put in place for both the seller and buyer especially if the seller is extending credit to the buyer.

Best to contact me ASAP so we can chat directly.

Roman R. Fichman, Esq.

admitted in Connecticut │ @TheLegalist

email: Info (@) TheLegalists (dot) com

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Answered on 5/28/17, 9:43 pm

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