Under most state laws, an LLC will have a winding-up period after dissolution or termination during which it will be allowed to continue to deed real property and convey personal property out of its company name. The winding-up period may not be set in stone, often referred to as a “reasonable” period of time. The LLC should make every effort, however, to distribute property out of the company name in a timely manner following a voluntary dissolution.
Deed real property out of the LLC to third-party buyers in the same manner as if the LLC were still in existence. Many attorneys will prepare the deed to state that the property is being conveyed to wind up the business of the LLC, since the conveyance is taking place after the date of the dissolution. Upon the conveyance to the third-party purchaser, distribute the proceeds from the sale to the members according to their percentage ownership in the LLC at the time of its dissolution. A prior written operating agreement or verbal arrangement should determine this percentage.
Deed real property from the LLC directly to the individual members according to their percentage ownership interest in the LLC. This process allows the LLC to convey the property out of the company name even without a third party seeking to buy the property at the time of dissolution. In the unfortunate event one of the members were to die prior to the sale, his percentage may have to be either deeded to his rightful heirs or devisees, or the remaining members will have to buy the deceased member’s interest from his heirs or devisees. This situation may have been addressed in the company operating agreement.
Convey personal property or titled property, such as a vehicle, by bill of sale and/or by signing over any existing title to the new owner. Have the authorized signatory, which may be all the members or a company-appointed manager, sign all necessary documents. Proceeds from the sale should be disbursed according to the company operating agreement or an oral agreement, as applicable.