Transferring Membership Interests in a New York LLC: What You Should Know

If you’ve ever tried to transfer a membership interest in a New York LLC—or even thought about it—you may have discovered pretty quickly that it’s not as simple as handing over stock certificates or signing a quick assignment. New York treats LLC membership differently, and if you don’t follow the rules, you can end up with disputes, delays, or even a transfer that doesn’t legally stick.

Let’s walk through the basics together, using guidance straight from New York’s Limited Liability Company Law and a real-world case, Gartner v. Cardio Ventures, LLC, to show how these issues play out.

1. So… can you just transfer your membership to someone else? Usually not without approval.

New York’s LLC Law has a pretty clear rule: if you want someone to become a member (meaning they get voting power and management rights), you need approval from the majority of the other members—and that consent has to be in writing.

There’s an exception if your operating agreement says otherwise. Think of the operating agreement as the LLC’s “house rules”—it often controls the process.

But the default rule is simple:

You can transfer (assign) the economic benefits (like sharing in profits) relatively easily. But transferring membership rights? That typically requires majority consent.

2. What does an assignee actually get? More than nothing, but less than a full member.

Even if someone doesn’t become a member right away, they still get certain rights as an assignee. Under LLCL § 604(b), once someone is approved and becomes a member, they step into the shoes of the original owner—but they’re not automatically on the hook for any surprise liabilities that weren’t visible from the operating agreement or disclosed.

In plain English:If you're buying into an LLC, you won’t accidentally take on a bunch of hidden obligations unless you specifically agree to them.

That said, the operating agreement can change how smooth—or how messy—this process is. So always review it.

3. A real-life example: Gartner v. Cardio Ventures, LLC

Here’s where theory meets reality.

In Gartner v. Cardio Ventures, LLC, a member sued, claiming a transfer of membership interests was invalid. The case made it all the way to New York’s Appellate Division.

What did the court say?

a. If the operating agreement says a majority can approve, that’s enough.

The transfer was upheld because a majority of members had approved it in writing. That matched what the operating agreement required.

b. Even if the operating agreement were invalid, the transfer still works.

The court took it a step further: even assuming the operating agreement wasn’t enforceable, the majority’s written consent would still validate the transfer under LLCL §§ 603 and 604.

So majority consent really is the golden rule.

c. The subscription agreement didn’t block the transfer.

It didn’t list transfer restrictions besides requiring compliance with the law—so the consent-based transfer was fine.

d. The plaintiff still had the right to inspect records.

Interestingly, the plaintiff got something out of the lawsuit: the right to inspect the LLC’s books and records under LLCL § 1102. Membership has its perks, even when a transfer doesn’t go your way.

4. What this all means if you're involved in an LLC

If you're an existing member:

• Make sure your operating agreement actually says what you want it to say.

• Put membership-transfer approvals in writing. It matters.

If you're buying into an LLC:

• Don’t assume you become a “member” the moment you pay.

• Ask for the operating agreement. Review it carefully.

• Confirm you’re getting membership rights—not just the right to receive distributions.

If your LLC doesn’t have an operating agreement:

New York’s default rules kick in whether you like it or not, and they’re not always intuitive. Written consent from a majority of members will still rule the day.

5. Final Thoughts

Transferring LLC interests in New York isn’t rocket science, but it also isn’t a casual handshake deal. With the right approvals—and the right documents—it can be smooth and predictable. Without them, you could end up in court, like the parties in Gartner.