My parents own a small company that’s an LLC. I studied and took an exam for licensing for their company but for that to legally work I need to be a member of the LLC.
The company hasn’t been valued yet but is in the ballpark of between $1.5MM to $2MM. I’m interested in a 5% ownership interest if I can figure out how to come up with the cash, which would be $100k at $2MM company valuation.
What is the best method to come up with the required money for this?
Thanks in advance!
Best method to fund membership interest in parent’s company
Best method to fund membership interest in parent’s company
Last edited by bsnr on Wed Jul 06, 2022 6:44 am, edited 1 time in total.
Re: Best method to fund membership interest in parent’s company
Banks make loans to purchase company shares. However, you will probably have a difficult time getting a loan. As a minority shareholder you probably have very little rights. The majority owners will pretty much control the company. I would advise not to be a minority shareholder and not to get in business with family. If you want to work and be an employee that's ok but I wouldn't take it any further than that.
Re: Best method to fund membership interest in parent’s company
Can the LLC loan the funds to you (at market interest rates)?
You might prefer to have 5% eventually, but maybe you don't have to boil the ocean to get started.
How much ownership in the LLC do you need for it to "legally work"? Is 1% sufficient? Is 0.01% sufficient?
You might prefer to have 5% eventually, but maybe you don't have to boil the ocean to get started.
The closest helping hand is at the end of your own arm.