6+ Facts About LLC Shares (2022 Guide)

“83% of people have considered BUYING stock, and 12% have thought of SELLING stock.”

Is that accurate? Who knows!

Do LLCs have shareholders? Are “LLC shares” a thing? 

Well, No!

LLCs do not have the option to have shares.

All you need to do is follow the guidelines below.

shareholder, stock

What Exactly Are Shareholders?

In order to fully understand the deal with “LLC shares”, you need to first straighten out a few things.

A shareholder (stockholder) is a person, company, or institution that owns at least one share in a private corporation.

Meaning that “stock” is a term that is used when it comes to corporations.

When you buy stock, you are buying rights to:

  1.  A percentage of ownership
  2.  Votes
  3. Maybe dividends. 

But, you aren’t usually involved in the day to day business of the corporation.

Each “share” is an equal percentage of ownership in the business.

Whats the story with "LLC shares"?

When it comes to LLCs, however, the terms “stock” or “shares” don’t go.

Meaning, if you use such terms, you will not sound the smartest (if you catch the drift).

In fact, LLCs DO NOT issue neither stock nor shares. They are NOT traded publicly.

For this reason, you will not be able to find a publicly traded LLC.

So the answer is NO! LLCs do not have shareholders. They are not publicly traded companies. 

Instead, the term used is, “members”.

Just ask the IRS. They consider owners of an LLC as “members”. They go on to explain who qualifies to be a “member”. That’s for another day.

llc shares members

The “members” of an LLC are the guardians who oversee the daily operations of the business.

Not every member has an equal ownership in the LLC.

Typically, the operating agreement clarifies the exact amount of ownership each member has.

It designates how many “membership units” or “member interests” each member has.

These “units” can break down further into voting units and non-voting units.

Corporation shareholders VS LLC members

Corporations LLCs
Stocks Members
Can be traded publicly Cannot be traded publicly
Equal units Not equal units
No legal responsibilty (in most cases) Yes legal responsibilty
Not always invloved in company decisions Involved in company decisions

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