buying out withdrawing member

Susan Benishek on

What is the best way to buy out the shares of a withdrawing
member. We would rather do this than sell any of our stock.
Any advice would be great!
Thanks

Gene Rooks on

Susan, you don't buy out their shares. You handle it by letting your
members who want to contribute more right now to provide cash for the payout
do so, and credit it to them as you would any other payment, it buys them
new units at that month's price. Then withdraw your member as of the
appropriate valuation date called for in your PA. Simple, uncomplicated.
You could also transfer shares of appreciated stock to her for part of the
payout, that defers capital gain on that holding til later, as each member
withdraws.

Gene Rooks, Orlando

Susan Benishek on

this sounds like the way to go! Thanks for the input...

Gene Rooks <generooks@cfl.rr.com> wrote:

Susan, you don't buy out their shares. You handle it by letting your
members who want to contribute more right now to provide cash for the payout
do so, and credit it to them as you would any other payment, it buys them
new units at that month's price. Then withdraw your member as of the
appropriate valuation date called for in your PA. Simple, uncomplicated.
You could also transfer shares of appreciated stock to her for part of the
payout, that defers capital gain on that holding til later, as each member
withdraws.

Gene Rooks, Orlando

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