Member (LLC)
An owner of an LLC. Membership represents both economic interest (right to distributions) and management interest (voting rights, unless modified in Operating Agreement).
Definition
An LLC member is the LLC equivalent of a corporate stockholder. Members own membership interests, which combine economic rights (share of profits, losses, distributions) and management rights (voting on LLC matters). The Operating Agreement defines exactly how these rights are allocated.
Context
A single-member LLC has one member; a multi-member LLC has two or more. Members can be individuals (natural persons) or other entities (corporations, partnerships, trusts).
Example
A Bangladeshi founder is the sole member of a Delaware single-member LLC. They own 100% of the membership interest, with all economic and management rights.
Common pitfalls
- Confusing member with manager (one is owner, the other is operator; they can be the same person but are distinct roles).
- Adding a spouse or co-founder as member changes federal tax treatment from disregarded entity to partnership.