Division of Capital Contributions in an LLC in a Divorce Case
Division of Capital Contributions in an LLC in a Divorce Case
If community property is capital contribution in a limited liability company registered in the name of either spouse, and the other spouse is not a shareholder of such company, the community property should be divided as follows.
Majority shareholders’ agreement to transfer and waiver of right of first refusal
Both spouses may agree that all or part of the capital contribution be transferred to the spouse who is not a shareholder of the limited liability company. If a majority of the other shareholders agree to such transfer, and all the other shareholders clearly express their waiver of the right of first refusal, the spouse who is not a shareholder of the limited liability company may be registered as a shareholder of the company.
Majority shareholders’ disagreement to transfer but willingness to purchase
If both spouses reach an agreement on the number of shares to be transferred, transfer price, and other terms and conditions of transfer, a majority of the other shareholders clearly express their disagreement to the transfer but any of them intend to purchase the capital contribution under the same terms, the proceeds from the transfer to other shareholders may be divided as community property of the spouses.
Majority shareholders’ disagreement to transfer and unwillingness to purchase
If both spouses reach an agreement on the number of shares to be transferred, transfer price, and other terms and conditions of transfer, a majority of the other shareholders do not agree to the transfer and are unwilling to purchase the capital contribution under the same terms, it shall be deemed the other shareholders’ agreement to the transfer. In such a case, the spouse who is not a shareholder may be registered as a shareholder of the company.
Evidence to prove shareholders’ agreement
In order to prove that the other shareholders agree to the transfer, it is sufficient for the spouses to produce documents of the shareholders' meetings of the company stating such agreement or other written statements of shareholders obtained by the spouses through other legal means.
Robert Zhang 
Steve Li 