Who Can Own an LLC?

By Brian Richards

Limited liability companies are among the most flexible business entities an owner can choose. LLC owners are called members, and one may be owned by an individual, a group or another business entity. Though LLCs are governed by state rather than federal law, there is a great amount of consistency among the ownership laws of each state.

Limited liability companies are among the most flexible business entities an owner can choose. LLC owners are called members, and one may be owned by an individual, a group or another business entity. Though LLCs are governed by state rather than federal law, there is a great amount of consistency among the ownership laws of each state.

Individual

An individual may, by himself, own an LLC. Single-member LLCs are common and offer liability protection that sole proprietorships do not. The sole owner does not have to be a resident of the state in which the LLC was formed -- but he must select an individual who lives in the state to serve as the LLC’s registered agent -- nor does he even need to be a resident of the United States. The owner may be any age, though LLCs owned by a single member under 18 may have problems conducting business, as minors are not able to form legal contracts.

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Group

A group of two or more people may co-own an LLC together. Unlike with corporations, the ownership interest of any individual member does not have to match her financial contribution to the company; ownership may be divided any way that the members decide. New individuals may be given ownership interest and old members may leave without disrupting the status of the LLC.

Entity

LLCs may also be owned by one or more business entities, such as corporations, trusts or even other LLCs. A business owned in this way is typically governed by the members of the parent entity for the purpose of divvying assets or liabilities among one or more subsidiary businesses.

Restrictions

Though there are very few restrictions placed on ownership of a general LLC, some states may have specialized requirements for certain types of LLCs. For example, a professional LLC, which is an option only in a few states, requires that all members hold professional licenses in the field in which the LLC conducts business. A company may also impose membership restrictions on itself in its operating agreement, but these requirements may be amended whenever the LLC chooses.

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Can More Than One Business Be Conducted Under One LLC?

References

Related articles

What Is the Difference of a Shareholder Vs. a LLC Member?

Corporate shareholders and limited liability company members both have ownership interests in the business entity of which they are a part, but there are many differences between the two. Management rights, transferability, debtor accessibility and receipt of profits differ between shareholders and LLC members.Taxation also differs dramatically between LLCs and corporations, though the extent of difference depends in part on how the LLC has elected to be taxed and the type of corporation.

The Definition of an LLC Member

An LLC member is an owner of the company. All owners of LLCs are classified as members. Just as the owners of a partnership are members of the company, LLC owners are legally members of the LLC. The rights and responsibilities of LLC members are specified in the operating agreement, but also defined by state LLC regulations. Since LLCs are state, not federal, creations, each state can have their own specific regulations, but owners in all LLCs are members.

Can a Business Own Part of an LLC?

Members of a limited liability company (LLC) can be individuals or business entities, including corporations, trusts or even other LLCs. Your existing business may want to form a new LLC as an investment or to spread out and protect your business’ assets or liabilities. Your business entity may either be the single member of the new LLC or may share ownership with other businesses or individuals. Most states have very few restrictions on LLC ownership.

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