If you have an LLC in Oklahoma and you wish to discontinue it, you don’t always have to dissolve it. You can transfer the ownership, and it will keep running the way it was. Transferring ownership of a Limited Liability Company (LLC) in Oklahoma is a relatively simple and straightforward process involving minimal paperwork. It can be partially or fully transferred to another owner.
LLCBuddy editors shared a step-by-step guide on how to transfer ownership of an LLC in Oklahoma. The steps might seem easy and doable. However, these are general steps and might need special attention for specific cities or regions in Oklahoma. Hence, it is recommended to consult an attorney or legal expert before taking the steps.
How an LLC Ownership Structure Works in Oklahoma
By now, you must know that a limited liability company is one of the simplest forms of business structure. The ownership and transferring it to others is even simpler. For an LLC in Oklahoma or any other state in the United States, the company is considered an independent entity that is separated from its owners, which means the owners are not personally liable for the company’s debts or legal obligations.
The ownership structure of an LLC in Oklahoma is determined by the percentage of ownership interests held by each member. These ownership interests can be distributed however the members see fit and are typically outlined in the Operating Agreement drafted in Oklahoma.
There is no maximum limit on the number of members an LLC in Oklahoma can have, and the members can be individuals, other LLCs, corporations, or even foreign entities. This flexibility allows for a wide range of business structures, from single-member LLCs in Oklahoma to large, multi-member LLCs with complex ownership arrangements.
What is Oklahoma LLC Buy-Sell Agreement in Ownership Transfer?
In Oklahoma, the buy-sell agreement is a part of your operating agreement. It explains the instructions for buying and selling the LLC ownership. For example, who can be the member of Oklahoma LLC, how will buy out and sell of the LLC be determined, whether the members of the LLC in Oklahoma will buy the shares of the leaving owner, and how – these are the points you have in the buy-sell agreement.
Buy Out Oklahoma LLC or Partial Transfer: In this case, the members of the LLC generally buy the shares of the owner who is leaving. As the LLC buys the owner’s interests, the shares get divided equally among the remaining Oklahoma LLC members. LLC members must approve the transfer, and then the Operating Agreement (OA) will be updated to exclude the departed owner.
If your LLC operating agreement does not specify these terms beforehand, you must follow Oklahoma state LLC law. In some states, ownership transfer does not simply take place. Instead, they have to dissolve the LLC to continue with the process. So, while you’re forming an Oklahoma LLC, make sure to create a buy-sell agreement beforehand.
Sell a Oklahoma LLC Or Fully Transfer: Selling an LLC or Fully Transferring the ownership is a bit more complicated than the buy-out process. In this condition, owners have the independent legal right to sell the interest to any third party. They do not need other members’ approval for this. The negotiation between the buyer and the seller involves complexities if there is no operating agreement in the first place. As an owner, you must find a buyer, write the change of ownership letter, set out other formalities, and voila! Your ownership transfer is done. The parties will settle the sale contract, including the LLC price, following Oklahoma state laws.
How to Transfer Oklahoma LLC Ownership
When an LLC member decides to step down from the owner’s position, they must transfer the ownership to someone else. It can be other existing members of the LLC or a third party. Transferring LLC ownership in Oklahoma is a common yet complex deed. LLC owners who want to transfer their ownership must follow some steps to do the task. Here are the following steps-
Step 1: Review Your Oklahoma LLC Operating Agreement
An operating agreement is a kind of non-mandatory document in many states. In Oklahoma, it is not mandatory to draft one. If you have one at the time of LLC formation in Oklahoma, then it would be easier for the owners to transfer the name. If not, then it should be filed at the time of transferring ownership. The operating agreement for the LLC in Oklahoma must be reviewed for the ownership transfer conditions and other legal requirements regarding the buy-out and sale of the LLC.
Step 2: Amend the Oklahoma Articles of Organization
Changing/transferring ownership might lead to structural change at the managerial level. In that case, the LLCs must comply with the Oklahoma Secretary of State. To do so, one must file the Oklahoma Articles of Organization amendment. Specifically in Texas, LLCs must submit a Public Information Report annually to the Texas Comptroller of Public Accounts. The managerial changes will be explained there.
As soon as the ownership transfer negotiation is done and the agreement is made with the updated change of ownership, file it with the Secretary of State. For that, you must amend the Articles of Organization and get the Amended Articles of Organization. Make the changes to the existing Articles of Organization, get the amendment form, and submit it to the Oklahoma SOS along with other documents and the filing fee. Read how to amend Oklahoma Articles of Organization in a simple way.
Step 3: Spread the News
Once the legal formalities are done, and the ownership of your LLC is transferred officially in Oklahoma, you must spread the word to the clients, partners, and other concerned people. Also, banks and other financial institutions should be notified about the ownership change. Business entities, vendors, and other officials you work with should also be notified.
Step 4: Obtain a New EIN (optional)
You might need to apply for a new EIN based on the LLC ownership transfer. After officially transferring ownership, you must check with the IRS whether you need a new EIN. There is a formal form to notify the IRS about the LLC ownership transfer. Get the form from their website, enter the details, and submit it. You will get notified whether you need to apply for a new EIN.
Why Transfer LLC Ownership in Oklahoma
There can be several reasons why the transfer of LLC ownership in Oklahoma takes place in any organization. Some of the most common reasons include the following-
- Death of the LLC owner
- Separation or Divorce of the LLC Owners
- LLC owners do not wish to continue their association with the organization
- LLC owners want to appoint a new member (owner)
- LLC owners want to sell the business off to someone else
These are some of the common reasons why an LLC ownership gets transferred in Oklahoma. Transferring LLC ownership requires a comprehensive LLC operating agreement in Oklahoma. This is an internal document every LLC should have at the time of formation.
The Role of Oklahoma Operating Agreement in LLC Ownership Transfer
Creating an Operating Agreement in Oklahoma is one of the major steps in forming a limited liability company (LLC). However, many states do not require an Operating Agreement. California, New York, Delaware, Maine, Nebraska, and Missouri are the states where an LLC operating agreement is mandatory.
Even when your state does not necessarily need you to file the operating agreement, it is recommended that you should have it to avoid any internal disagreements or issues in the future.
LLCBuddy Editorial Team
An operating agreement is an internal document explaining all the procedures, including ownership transfer, dissolution, LLC operation, members, and other LLC-related processes. Operations, such as dissolution and ownership transfer, occur based on those written regulations.
If there is no Oklahoma Operating Agreement or it does not have clear ownership transfer or buy-sell agreement provisions, the transfer takes place based on Oklahoma state law.
What to Include in Oklahoma Operating Agreement
This official document outlines the company’s structure, the members’ details, the dissolution process, and a lot more. Hence, it is always wise to have one to avoid any confusion in the future, whether your state needs it or not. The LLC operating agreement should have the following points-
- Whether LLC members are related to each other and what type of relationships they share
- Managers’ rights and responsibilities
- Operating Agreement Amendment conditions
- Members’ profit and loss shares
- Oklahoma LLC Tax structures
- Transfer of ownership rules and procedure
- Dissolution of Oklahoma LLC
If your operating agreement explains all the above points, you must follow it for the ownership transfer.
Reasons to Transfer Oklahoma LLC Ownership
There can be many issues that lead to ownership transfer. One of the most common issues is the death of the owner. There can be other issues where transfer of ownership occurs. Here are some issues to consider,
Divorce Or End of Marriage: In some cases, according to the divorce decree, the ownership transfers to the spouse. If the LLC in Oklahoma has an operating agreement and the ownership transfer condition is specified, then the LLC must follow the Oklahoma operating agreement to proceed.
Death of a Member: This is the most common issue in LLCs. In Oklahoma, if a member dies, the ownership, by default, transfers to the legal heirs of the deceased person. However, in this case, the legal heirs (wife/husband/kids) do not get any managerial power or authority. They continue enjoying the benefits, such as a share of the profit and others. But they won’t get any other power in the company. In such situations, other members of the Oklahoma LLC often buy out the deceased’s interests.
Dissolution of Oklahoma LLC: If any member/owner plans to leave the company, the LLC gets dissolved and reformed with the new policy and operating agreement. The members and managers make this sort of decision at the time of the creation of the operating agreement.
FAQs
Also Read
- Transfer LLC Ownership in Alabama
- Transfer LLC Ownership in Alaska
- Transfer LLC Ownership in Arizona
- Transfer LLC Ownership in Arkansas
- Transfer LLC Ownership in California
- Transfer LLC Ownership in Colorado
- Transfer LLC Ownership in Connecticut
- Transfer LLC Ownership in Delaware
- Transfer LLC Ownership in DC
- Transfer LLC Ownership in Florida
- Transfer LLC Ownership in Georgia
- Transfer LLC Ownership in Hawaii
- Transfer LLC Ownership in Idaho
- Transfer LLC Ownership in Illinois
- Transfer LLC Ownership in Indiana
- Transfer LLC Ownership in Iowa
- Transfer LLC Ownership in Kansas
- Transfer LLC Ownership in Kentucky
- Transfer LLC Ownership in Louisiana
- Transfer LLC Ownership in Maine
- Transfer LLC Ownership in Maryland
- Transfer LLC Ownership in Massachusetts
- Transfer LLC Ownership in Michigan
- Transfer LLC Ownership in Minnesota
- Transfer LLC Ownership in Mississippi
- Transfer LLC Ownership in Missouri
- Transfer LLC Ownership in Montana
- Transfer LLC Ownership in Nebraska
- Transfer LLC Ownership in Nevada
- Transfer LLC Ownership in New Hampshire
- Transfer LLC Ownership in New Jersey
- Transfer LLC Ownership in New Mexico
- Transfer LLC Ownership in New York
- Transfer LLC Ownership in North Carolina
- Transfer LLC Ownership in North Dakota
- Transfer LLC Ownership in Ohio
- Transfer LLC Ownership in Oklahoma
- Transfer LLC Ownership in Oregon
- Transfer LLC Ownership in Pennsylvania
- Transfer LLC Ownership in Rhode Island
- Transfer LLC Ownership in South Carolina
- Transfer LLC Ownership in South Dakota
- Transfer LLC Ownership in Tennessee
- Transfer LLC Ownership in Texas
- Transfer LLC Ownership in Utah
- Transfer LLC Ownership in Vermont
- Transfer LLC Ownership in Virginia
- Transfer LLC Ownership in Washington
- Transfer LLC Ownership in West Virginia
- Transfer LLC Ownership in Wisconsin
- Transfer LLC Ownership in Wyoming
In Conclusion
As you all know, forming a limited liability company is much easier than forming a corporation, a partnership, or any other type of business. The ease of transferring ownership from one to another is one of the many reasons for entrepreneurs to start an LLC. In Oklahoma, transferring LLC ownership does not need a lot of paperwork or steps. You must update the formation papers with the new ownership information, file the amendment to the formation document, tell people about it, and comply with the state.
Though it seems easy to file documents while transferring ownership, it could be more complex than just these steps. Based on the local regulations, nature of business, or some other administrative rules, transferring ownership in Oklahoma might take more than what it looks like. It is recommended to consult a professional or attorney before you take such an important business decision.