There are times when a membership interest in a Limited Liability Company (LLC) needs to be valued. These include: 1) a member wanting to sell interest or transfer interest, 2) death of a member, 3) bankruptcy, among others.
How is the member’s interest valued?
First step is to look at how the LLC’s operating agreement declares the interest be valued. Usually there are provisions for a CPA to give the value, with a party-member having the right to get a second opinion, followed by a 3rd party selection by the two CPA’s making a final determination using the two opinions.