LLC Number of Owners: Everything You Need to Know
LLC number of owners depends on the ownership of the LLC.3 min read
LLC number of owners depends on the ownership of the LLC. It may be owned by an individual, other LLCs, corporations, partnerships, or any other legal entity recognized by the state's local laws.
One of the first decisions a new business owner must make is deciding on the type of entity structure to use to form the company. This is usually a choice between a corporation or LLC. Each has their own process of formation and operating structure.
Each owner in a corporation owns shares of stock. Owners are referred to as shareholders. A shareholder's portion of the corporation's ownership is measured by the number of shares owned.
Shareholders are responsible for electing a board of directors whose job is managing the company. A shareholder may be elected to the board but there is no requirement that a shareholder holds the position. In some states, a board of directors may consist of only one director. In other states, the requirement is there must be more than one director.
The board of directors makes all major decisions via a vote pertaining to the company. The decisions are then documented as formal resolutions, which requires taking meeting minutes.
The board also delegates the responsibilities of day-to-day management to officers of the corporation who carry out the decisions made by the board. There is no requirement that an officer must be a shareholder or a director to hold the position of officer. This means officers, shareholders, and directors can be different people although there may be some overlap.