Equity Interest Transfer Agreement Template

Equity Interest Transfer Agreement Template

This Equity Interest Transfer Agreement (“Agreement”) is made as of [Date of Agreement].

1. Parties

Transferor (Current Interest Holder)
Full Legal Name: [Transferor Full Legal Name]
Address: [Transferor Address]
Email: [Transferor Email Address]
Phone: [Transferor Phone Number]

Transferee (New Interest Holder)
Full Legal Name: [Transferee Full Legal Name]
Address: [Transferee Address]
Email: [Transferee Email Address]
Phone: [Transferee Phone Number]

2. Company and Equity Interest

Company Name: [Company Legal Name]
Entity Type: [LLC / Partnership / LP / LLP / Other]
Jurisdiction of Organization: [State/Province, Country]
Principal Office Address: [Company Address]

Transferor currently owns an equity interest in the Company described as follows (the “Equity Interest”):

Type of Interest: [Membership Interest / Partnership Interest / Units / Percentage Interest]
Percentage or Units: [Exact Percentage or Number of Units]
Class or Series (if applicable): [Class / Series]

3. Transfer of Equity Interest

3.1 Transfer

Subject to the terms of this Agreement and any required consents, Transferor hereby sells, assigns, and transfers to Transferee, and Transferee hereby acquires from Transferor, all of Transferor’s right, title, and interest in and to the Equity Interest described in Section 2, together with any associated rights (including rights to distributions and allocations from and after the Effective Date, as defined below).

3.2 Effective Date of Transfer

The transfer of the Equity Interest will be effective as of:

Effective Date: [Effective Date of Transfer]

4. Purchase Price and Payment

4.1 Purchase Price

The total purchase price for the Equity Interest (the “Purchase Price”) is:

Purchase Price: [Amount and Currency]

4.2 Payment Terms

The Purchase Price will be paid by Transferee to Transferor as follows:

Amount Due at Signing (if any): [Amount and Currency]
Amount Due at Closing: [Amount and Currency]
Additional or Deferred Payments (if any): [Description of any installment payments or earn-out terms]

Payment Method: [Wire Transfer / Bank Transfer / Cashier’s Check / Other]
Payee and Account Details: [Payee Name and Account / Payment Details]

5. Closing

5.1 Closing Date

The closing of the transfer (the “Closing”) will take place on:

Closing Date: [Closing Date]

or on another date agreed in writing by Transferor and Transferee.

5.2 Actions at Closing

At Closing:

• Transferee will pay any unpaid portion of the Purchase Price due at Closing.

• Transferor will deliver any documents reasonably necessary to evidence the transfer of the Equity Interest, such as updated unit or interest ledgers or assignments.

• The Company will update its records to reflect the transfer, to the extent required by its governing documents and law.

6. Transferor’s Representations and Warranties

Transferor represents and warrants to Transferee that, as of the date of this Agreement and as of the Closing Date:

a) Authority
Transferor has full right, power, and authority to enter into this Agreement and to transfer the Equity Interest to Transferee.

b) Ownership
Transferor is the lawful owner of the Equity Interest, free and clear of any liens, pledges, security interests, options, or other encumbrances, except as disclosed below:

Disclosed Encumbrances (if any): [Description or “None”]

c) Compliance with Governing Documents
To Transferor’s knowledge, the execution and performance of this Agreement and the transfer of the Equity Interest do not violate the Company’s operating agreement, partnership agreement, or other governing documents, except as disclosed below:

Governing Document Restrictions (if any): [Description or “None”]

d) No Other Agreements
Transferor has not entered into any agreement to sell, assign, or otherwise transfer the Equity Interest to any other person, and the Equity Interest is not subject to any outstanding rights of first refusal, options, or similar rights, except as disclosed above.

7. Transferee’s Representations and Warranties

Transferee represents and warrants to Transferor that:

a) Authority
Transferee has full right, power, and authority to enter into this Agreement and to acquire the Equity Interest.

b) Financial Ability
Transferee has, or will have at Closing, sufficient funds to pay the Purchase Price when due.

c) Independent Review
Transferee has had the opportunity to review the Company’s governing documents and any information about the Company made available by Transferor or the Company, and is acquiring the Equity Interest based on Transferee’s own judgment and, where used, professional advice.

8. Company and Co-Owner Consents

8.1 Required Consents

If required by the Company’s governing documents or applicable law, this transfer is subject to:

• The consent or approval of the Company; and/or

• The consent or approval of other members, partners, or owners.

Required Consents: [Description of required consents or “None”]

8.2 Effectiveness

If any required consents are not obtained, the parties will cooperate in good faith to structure the transaction in a lawful manner that is as close as reasonably possible to the intended transfer of the Equity Interest, unless either party exercises any termination right stated in this Agreement or allowed by law.

9. Distributions and Capital Accounts (If Applicable)

9.1 Distributions

Unless otherwise agreed in writing:

• Distributions declared with a record date before the Effective Date belong to Transferor.

• Distributions declared with a record date on or after the Effective Date belong to Transferee.

9.2 Capital Account (If Company Uses Capital Accounts)

If the Company maintains capital accounts in accordance with its governing documents, the parties expect that the Company’s books and records will be updated so that the capital account associated with the Equity Interest is allocated to Transferee from and after the Effective Date, as provided in the Company’s governing documents.

10. Taxes and Costs

10.1 Taxes

Each party is responsible for its own income, capital gains, or similar taxes arising from this transfer of the Equity Interest.

Any transfer, stamp, or similar taxes specifically imposed on the transfer of the Equity Interest will be paid by: [Transferor / Transferee / Shared – specify details].

10.2 Costs and Expenses

Each party will bear its own legal, accounting, and advisory costs in connection with this Agreement and the transfer of the Equity Interest, unless they agree otherwise in writing.

11. Further Assurances

Each party will, at the reasonable request of the other party and at the requesting party’s expense, sign and deliver any further documents and take any further actions reasonably necessary to give full effect to this Agreement and to properly register the transfer of the Equity Interest on the Company’s records.

12. Governing Law and Disputes

Governing Law: [State/Province, Country]

Any dispute arising out of or relating to this Agreement will be resolved under the laws of the jurisdiction stated above.

Dispute Resolution Method: [Court jurisdiction / Arbitration / Mediation followed by court or arbitration]

13. Notices

Any notice or other communication under this Agreement must be in writing and sent to the parties at their addresses or email addresses listed in Section 1 (or any updated address notified in writing).

Permitted delivery methods:

• Personal delivery or courier;

• Registered or certified mail;

• Email with reasonable evidence of sending.

14. Entire Agreement and Amendments

This Agreement contains the entire understanding between Transferor and Transferee regarding the transfer of the Equity Interest and supersedes any prior written or oral agreements on this subject between them.

Any amendment or modification to this Agreement must be in writing and signed by both Transferor and Transferee.

15. Severability

If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will continue in full force and effect as far as permitted by law.

16. Counterparts and Electronic Signatures

This Agreement may be signed in counterparts, each of which is considered an original, and all of which together form one agreement. Signatures delivered electronically will have the same effect as original signatures, to the extent permitted by law.

Signatures

Transferor (Current Interest Holder):
Signature: _______________________________
Printed Name: [Transferor Full Legal Name]
Title (if signing on behalf of an entity): [Title]
Date: [Date Signed by Transferor]

Transferee (New Interest Holder):
Signature: _______________________________
Printed Name: [Transferee Full Legal Name]
Title (if signing on behalf of an entity): [Title]
Date: [Date Signed by Transferee]

Company Consent (If Required)

Company: [Company Legal Name]

The Company hereby acknowledges and consents to the transfer of the Equity Interest from Transferor to Transferee on the terms set out in this Agreement, to the extent such consent is required by the Company’s governing documents or applicable law.

Authorized Signatory for Company:
Signature: _______________________________
Printed Name: [Authorized Signatory Name]
Title: [Title]
Date: [Date Signed on Behalf of Company]

Witnesses (If Used)

Witness 1:
Signature: _______________________________
Printed Name: [Witness 1 Full Legal Name]
Address: [Witness 1 Address]
Date: [Date Signed by Witness 1]

Witness 2 (if required):
Signature: _______________________________
Printed Name: [Witness 2 Full Legal Name]
Address: [Witness 2 Address]
Date: [Date Signed by Witness 2]

Notary Acknowledgment (If Required)

State/Province of [State/Province]
County of [County]

On [Notarization Date], before me, [Notary Full Name], a Notary Public, personally appeared [Transferor Full Legal Name], [Transferee Full Legal Name], and [Authorized Signatory Name, if Company also signs], who proved their identities on the basis of satisfactory evidence and acknowledged that they executed this Equity Interest Transfer Agreement for the purposes stated in it.

Notary Public Signature: _______________________________
Notary Public Printed Name: [Notary Full Name]
My Commission Expires: [Commission Expiration Date]
Notary Seal: ☐