rights unless admitted as a partner by the required consent.Use a buy‑sell clause or admission process in the agreement to set approval thresholds, valuation, and payment terms for incoming or departing owners. Action steps • Check the partnership agreement for transfer restrictions, consent requirements, right of first refusal, and valuation method. • Document an assignment of economic interest or an admission as a partner per the agreement’s voting rules. • If you operate as an LLP, keep Secretary of State filings current when partner roles affecting authority change. Corporation Ownership is transferred by selling or assigning shares; a change in shareholders does not dissolve the corporation. Shares are freely transferable in principle, but small corporations often restrict transfers by bylaws, shareholder agreements, or legends (for example, right of first refusal or board consent).In an S corporation, an ineligible transferee (for example, a non‑qualifying entity or foreign shareholder) can terminate S status—use transfer restrictions and eligibility representations to prevent an inadvertent termination.] Action steps: • Review bylaws and any shareholder/buy‑sell agreement for transfer limits, consent, and pricing. • Endorse and deliver share certificates (or update the book‑entry ledger) and record the transfer on the corporate stock ledger. • For S corporations, confirm the buyer’s eligibility and obtain required certifications before closing. Limited Liability Company (LLC) LLC ownership separates financial rights (the “transferable interest” in profits/distributions) from governance rights (voting, management, information). Unless your operating agreement provides otherwise, a member may transfer only the transferable interest; the transferee does not obtain membership or governance rights without the required member consent to admission. Your operating agreement may allow less‑than‑unanimous consent for admission and can set buy‑sell terms, transfer limits, and eligibility requirements. Action steps: • Check the operating agreement for transfer restrictions, consent thresholds, valuation method, and any rights of first refusal or buy‑out triggers. • Use a written assignment for the transferable interest, and, if admitting the transferee as a member, document member consent per the agreement. • Update internal records (capital accounts, member ledger) and any banking or contract signatories after changes in membership status.
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