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- 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.