I recently reviewed a Member Control Agreement between several LLC members. I did not draft the agreement, and stray references to “shares” leads me to believe that it was cobbled together from a Buy-Sell Agreement found online. The MCA had many of the common features of an MCA, including a right of first refusal of the members to buy out another member in connection with a voluntary transfer, and mandatory company redemption of a member’s interest upon the member’s death. However, the MCA was missing one small, but key, item: the signature of an officer of the LLC.
Lawyers (myself included) often refer to MCAs, Buy-Sell Agreements, and Shareholder Agreements as agreements between the owners of a company. Quite often, however, these agreements include rights and obligations of the company itself, such as mandatory redemption rights, indemnification obligations, and rights of first of refusal. I’ve seen many agreement templates and completed agreements that omit the signature of a company officer signing in his or her capacity as an officer. Of course, the same individual may be signing twice, once in his or her capacity as a member/shareholder and again as a corporate officer “for” the company. Omitting the company signature can lead to trouble down the road if future company leadership sees an opportunity to take advantage of this mistake.
If you discover that your MCA, Buy-Sell, or Shareholder Agreement is missing the company signature, it may be relatively simple to correct the mistake, but you should consult with your corporate attorney as soon as possible to determine what actions need to be taken.
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