Below is my list of possible events called triggering events that you can include or exclude from your Buy Sell Agreement when you hire me to prepare the agreement. When a triggering event occurs it starts an optional or mandatory buy out of the member who suffers a triggering event.
|1. Any event the members desire||A Buy Sell Agreement can include any triggering events that are important to the members. For example, the members could agree that if the New York Yankees win the World Series, member 1 must sell to member 2 for $100.|
|2. Operating Agreement default||If a member defaults under the Operating Agreement signed by all of the members the LLC has an option to buy out the defaulting member.|
|3. Member fails to contribute money or property||This provision encourages a member to satisfy the member's obligation in a written document to pay money or assign property to the company because if the member fails to satisfy that obligation the LLC will have an option to buy out the defaulting member.|
|4. Death of a member||The LLC or surviving members have an option to purchase the interest of a deceased member. The Buy Sell Agreement can also require the LLC to buy-out a deceased member. These types of buy outs can be funded with life insure on the lives of members.|
|5. Member is convicted of a felony||Many LLC members do not want to have another member who has been convicted of a felony.|
|6. Divorce of a member||Prevents the wrong spouse from acquiring an interest in the LLC if two members own their interest as community property and they get divorced and the wrong spouse becomes the sole owner of all or a portion of the membership interest.|
|7. Member files for bankruptcy||If a member loses the member's interest in the LLC because of filing for bankruptcy, the company and other members should be able to buy the interest from the creditor who acquires it out of the bankruptcy.|
|8. Member transfers all or part of the member's membership interest without the approval of the other members||The Buy Sell Agreement provides that a member may not transfer or encumber all or any interest in the member's interest in the company without the approval of the members and compliance with the terms and conditions of the Operating Agreement and/or the Buy Sell Agreement. If a member violates the no transfer/encumbrance provisions, the LLC should have an option to acquire the interest of the defaulting member, perhaps at an amount less than the fair market value of the interest.|
|9. Termination of employment of a member||Applies only to a member who is employed full time by the LLC. Especially important when the employee is a minority member and should only own an interest while employed.|
|10. Member loses his or her professional license||Commonly used for LLC's that are owned by members who must be licensed in a particular area. For example, the Buy Sell Agreement of an LLC owned by physicians might give the LLC and other members an option to acquire the interest of a physician/member who loses his or her license to practice medicine.|
|11. Majority member sells membership interest||"Drag Along" provision: Majority member has the option to require minority members to sell their interests in the LLC if the majority member sells. The sale of the minority members' interests are on the same terms and conditions as the sale of the majority member's interest.|
|12. Majority member sells membership interest||"Tag Along" provision: Minority members have the option to require the majority member to include the sale of the minority members' interests in the LLC if the majority member intends to sell. The sale of the minority members' interests must be on the same terms and conditions as the sale of the majority member's interest.|
|13. Member is disabled||Used to acquire the interest of a member who become permanently disabled and unable to provide needed services for the LLC.|
|14. Member retires||Members sometimes want to retire, but without a Buy Sell Agreement that provides for a retirement purchase, it probably will not happen.|
|15. Member is incompetent||Applies if a member loses his or her mental capacity and a court appoints a conservator to manage the members financial affair.|
|16. Member files a false document with the ACC||If a member causes a false document to be filed with the Arizona Corporation Commission it is a triggering event that can cause a buy out,|
|17. Member causes somebody to be added or removed from the LLC's bank account||If a member causes a signer to be added or removed on the company's bank account without the approval of the members per the operating agreement it is a triggering event that can cause a buy out.|
Hire the Keyts to Prepare a Buy Sell Agreement
We prepare Buy Sell Agreements custom drafted specifically to meet the desires of the members of Arizona LLCs. Our Buy Sell Agreement is the end result of Richard Keyt preparing this type of business agreement many times since practicing law in Arizona since 1980.We have three prices for our custom drafted Buy Sell Agreement. The prices are:
- $897 if we formed the LLC within the last 90 days
- $1,497 if we formed the LLC more than 90 days ago or if we did not form the LLC
- $1,394 if you purchase a Buy Sell Agreement for $897 and a new or amended Operating Agreement for $497.
Here’s the sequence of events when somebody hires us to prepare a Buy Sell Agreement for their Arizona LLC:
1. The purchaser completes and submits our online Buy Sell Agreement Questionnaire.
2. The purchaser pays for the Buy Sell Agreement with a credit card in our secure online store at one of the following links:
a. $897 Buy Sell Agreement Order Form if we formed the LLC within the last 90 days.
b. $1,497 Buy Sell Agreement Order Form if we formed the LLC more than 90 days ago or if we did not form the LLC.
c. $1,394 Buy Sell Agreement & Operating Agreement Order Form if we did not form the LLC and you are purchasing a Buy Sell Agreement and an Operating Agreement.
You can also pay by calling my legal assistant Rachel LeBeau - 480-664-7846 and giving your credit card information over the phone or by sending a check payable to KEYTLaw, LLC, 7373 E. Doubletree Ranch Road, Suite 165, Scottsdale, Arizona 85258.
3. After paying and completing our Questionnaire Richard Keyt will prepare the Buy Sell Agreement within 3 – 5 business days and email it to the LLC’s contact person along with a letter of explanation. These documents are in digital (pdf) format for distribution to all members for their review and input.
4. Members review the Buy Sell Agreement, mark text to be changed and make a list of questions about provisions and additional issues to ask KEYTLaw business and contracts attorney and former CPA Richard C Keyt. The members can email their changes to Richard or call Richard at 480-664-7472 and schedule a phone conference or a conference at our office for Ricky to answer questions about the BSA and determine what changes, if any, the members want to make to the BSA. The BSA comes with one hour of attorney time to discuss the agreement with the members and modify it per the members’ instructions at the meeting. Attorney time incurred beyond one hour will be charged at $295/hour.
5. Richard C. Keyt will revise the Buy Sell Agreement and send it to the contact person as an Adobe pdf file for the signatures of the members. Ricky will also send a pdf version of the agreement that shows the changes we made to the first draft of the BSA.
6. Members can sign the agreement the old fashioned way or we can arrange for digital signatures for no additional cost.
We constantly tell members of multi-member LLCs that the most important company document is the company’s Buy Sell Agreement because it is the only way to plan for the orderly future “divorce” of a member. Without a Buy Sell Agreement, the members are stuck with each other forever unless they are fortunate to agree on who will go, who will stay and how much, if any, the remaining members will pay the selling member.
Our Fee Includes Attorney Consultation & Revision Time
Our fee includes one hour of attorney time conferring with members, modifying the agreement and drafting custom provisions. Few of our LLCs exceed the allotted attorney time to finalize their Buy Sell Agreement. We want the final agreement to contain all of the provisions desired by the members of each LLC. Some LLCs need more custom drafting of provisions for the Operating Agreement or need more conference time with members to discuss the agreement and make changes. We bill the LLC for any excess attorney time at $295 per hour.
How to Hire the Keyts to Form Your New LLC
To hire us to form your Arizona LLC compare the contents of our three LLC packages ($397 Bronze, $597 Silver & $997 Gold [the confidential LLC]) and complete our LLC Formation Questionnaire.