Can an LLC Own Stock? Overview of LLC Ownership and Structure

• A limited liability company (LLC) is designed to be privately owned. LLC shares are called ‘membership interests.’
• LLCs can issue debt securities like bonds, but the process may be more complicated than issuing stocks.
• Unlike a corporation, an LLC does not issue stock. Owners receive interests based on their capital contribution.

LLC Ownership and Membership Interests

• Most states do not restrict LLC ownership; anyone can own an LLC. However, some sectors limit or prohibit LLCs.
• LLC ownership shares are called membership certificates, expressed as percentage ownership or assigned to membership classes.
• LLCs provide liability protection without the complexities of a corporation, offering more flexibility in ownership and tax treatment.

Investing and Ownership in LLCs

• An LLC can buy stocks just like any individual, once organized under state law.
• LLCs can add members to raise capital without changing their structure.
• LLCs can act as investors in corporations and can own stocks through brokerage accounts.

Issuing Stock in an LLC

• LLCs do not issue stock but can create different membership unit classes.
• While LLCs can file taxes like corporations, they cannot issue stock.
• Owners can transfer partial ownership through the buy-sell procedures in the operating agreement.