What an LLC membership interest purchase means
When you buy a trucking company through MCDOT Sales, the agreement is usually a membership interest purchase. Here’s what that means in plain English, and why it matters for keeping the authority.
Membership interest = ownership of the LLC
An LLC is owned by its members. Their ownership is called membership interest. When you buy 100% of it, you become the owner of the same LLC, with the same name, EIN, USDOT number, MC authority and history. Nothing is “transferred” at FMCSA. You update the records to show who the new owners and officers are.
For a corporation, the equivalent is buying its stock.
Asset purchase: the alternative
In an asset purchase, your own company buys selected assets, such as trucks, trailers and customer contracts. The seller’s LLC stays with the seller. Operating authority doesn’t move automatically in an asset deal, so your company generally needs its own USDOT number and authority.
Side by side
- Keeps the USDOT number and authority age: yes with a membership interest purchase, generally no with an asset purchase.
- What you get: the whole company in a membership deal, only the listed assets in an asset deal.
- Past liabilities: in a membership deal they stay inside the company, so the agreement must make the seller responsible for them. In an asset deal they mostly stay with the seller.
- Taxes: buyers often prefer asset deals and sellers often prefer equity deals. See tax basics and talk to a CPA.
How we protect buyers
- A 14-day due diligence period to check for liens, claims and debts. See the due diligence checklist.
- Purchase agreement terms that keep pre-closing liabilities with the seller.
- Deposit and closing funds held by Escrow.com.
Have your own attorney review the final agreement, especially the representations, warranties and indemnification sections.
Frequently asked questions
Does buying an LLC keep its MC authority?
Yes. When you buy the LLC’s membership interest, the same company keeps its USDOT number and MC authority. You then update FMCSA records with the new officers.
Am I responsible for the old owner’s debts?
The debts stay with the company, so the purchase agreement must make the seller responsible for anything from before closing. Due diligence is how you find them.
Next step
See companies available as membership interest sales.
This guide is general information, not legal or tax advice. Have your own attorney review any purchase agreement.