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.


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.


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.

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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.


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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