What is the organizational structure of a limited liability company (LLC)?
A. An LLC is owned by its members. They are analogous to partners in a partnership or shareholders in a corporation, depending on how the LLC is managed. A member will more closely resemble shareholders if the LLC utilizes a manager or managers, because then the members will not participate in management. If the LLC does not utilize managers, then the members will closely resemble partners because they will have a direct say in the decision making of the company. A member’s ownership of an LLC is represented by membership interest, just as partners have interest in a partnership and shareholders have stock in a corporation.
A. An LLC is owned by its members. This is the same as partners in a partnership or shareholders in a corporation, depending on how the LLC is managed. A member will more closely resemble shareholders if the LLC has a manager or managers, because then the members will not participate in management. If the LLC does not utilize managers, then the members will closely resemble partners because they will have a direct say in the decision making of the company. A member’s ownership of an LLC is represented by membership interest, just as partners have interest in a partnership and shareholders have stock in a corporation.
