Who is a Member in an LLC?
In a Limited Liability Company (“LLC”), a “member” refers to an owner of the LLC. Members can be individuals, other LLCs, corporations, or any combination of these. Some key points about members in an LLC:
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Ownership Interest. Members hold an ownership interest in the LLC, which may be expressed as a percentage of ownership, shares, or units.
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Limited Liability. Members enjoy limited liability protection, meaning their personal assets are generally protected from the debts and liabilities of the LLC.
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Management Structure. An LLC can be member-managed or manager-managed. In a member-managed LLC, all members participate in day-to-day operations. In a manager-managed LLC, members appoint one or more managers to handle operations.
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Responsibilities. The rights and responsibilities of members are usually outlined in the LLC’s operating agreement, allowing for flexible arrangements tailored to the needs of the members.
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Profit Distribution. Members typically share in the profits and losses of the LLC based on their ownership interests, but this can also be specified in the operating agreement.
