Price of LLC membership interest

[davidcreswell]

Hello everyone:

I have a client that wants to admit a new member to his LLC, but can't figure out the fair market value of the LLC. Is there any guidance, best practices, etc, out there that would help in valuing the business?

Thanks,
David

 

[heyadrian]

A new member? Do you mean "issue a new shareholder to the company shares of the current setup"?

 

[davidcreswell]

Thanks for your reply. Here's the deal:

My client is one of the members of a two member LLC. The LLC is being taxed as a partnership. The members want to admit a c-corp as a new member (or partner for taxation purposes). I was just looking to find some guidance that would fairly value the price of the LLC for the incoming member/partner.

As a side note, the two members also own the c-corp they will be admitting as the new member, so I don't want to undervalue or overvalue the LLC's purchase price because of it being a related-party transaction.

Thanks,
David