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Ask a Lawyer -- LLCs
LLC Question 124
Question:
Is it possible, if all the members of an llc desire to dissolve the llc, to dissolve but still retain all the stock and mutual fund investments? That is, accomplish the asset distribution that must happen upon dissolution by recogizing each member's percentage ownership of the set of stocks rather than selling these investments.
Response: If the LLC is "dissolved" then all the assets of the LLC are to be liquidated (either sold or distributed to the LLC members as part of the plan of liquidation). This is part of the process of dissolving an LLC or corporation. I assume your LLC has substantially appreciated investments for which you would take a tax hit if they were sold. Thus, your problem is really more a tax issue. One option may be to discontinue business operations yet keep the LLC legally active until it suits the members to sell the investments. I'd check with a tax accountant or attorney for advice on the best way to proceed for tax purposes. There may be hidden tax consequences to proceeding as suggest above.
Submitted: 08/18/2007; Gavin, MA
Response: 08/19/2007; JJR
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