LLC Ownership Structure: Who Are the Owners of an LLC?
The owners of an LLC are called members, who can be individuals or entities that own an interest in the LLC.
An LLC, or Limited Liability Company, is a popular business structure that offers personal liability protection and tax benefits. However, one of the most common questions about LLCs is: what are the owners of an LLC called? In this article, we'll explore the different types of owners of an LLC and their roles and responsibilities.
The owners of an LLC are called members. Members are the individuals or entities that own an interest in the LLC and share in its profits and losses. Members can be individuals, corporations, trusts, or other LLCs.
There are two main types of members in an LLC: managing members and non-managing members. Managing members have the authority to make decisions and manage the business, while non-managing members do not have these responsibilities.
LLCs can also have multiple classes of members, which can have different rights and responsibilities. For example, some members may have voting rights, while others may not.
It's worth noting that LLCs can also have a single member, which is often referred to as a sole proprietorship. In this case, the owner is not a member, but rather the business is owned and operated by a single individual.
When it comes to taxes, LLCs are pass-through entities, which means that the business income is only taxed at the individual level, not at the business level. This can provide significant tax benefits for LLC owners.
In summary, the owners of an LLC are called members, and they can be individuals or entities that own an interest in the LLC. Members can have different roles and responsibilities, and LLCs can have multiple classes of members. Understanding the ownership structure of an LLC is crucial for business owners who want to take advantage of the benefits of this popular business structure.
