Who Can be LLC Members?

Any person or company in the world can be an LLC Member in any state.

After you form an LLC, you elect Members (owners) of the LLC.

The following legal persons (ex: companies) and natural persons (ex: people like you and I) can be a Member of an LLC.

The following can be LLC Members (owners):

• US citizens
• US residents
• Non-US citizens
• Non-US residents
• US immigrants
• US foreigners
• Other LLCs
• Other Corporations (C-Corp and S-Corp)
• Other legal entities (besides LLCs and Corporations)
• Trusts
• Pension Plans
• Individual Retirement Accounts (IRAs)
• Other legal entities

What is an LLC Member?

An LLC Member is simply an owner of an LLC.

Any person or company can own an LLC, and that person or company is called an LLC Member. A person/company is still an LLC Member whether they own 100% of the LLC or 1% of the LLC (or less).

Can Non-US citizens and Non-US residents own an LLC?

Yes, any US foreigner (or foreign company) can form an LLC and be an LLC Member.

There are no citizenship or residency requirements to forming an LLC in the United States.

Can an LLC own another LLC?

Yes, one LLC or multiple LLCs (regardless of in what state they are formed) can own another LLC (in any state).

Can another company own an LLC?

Yes, one company or multiple companies (regardless of in what state they are formed) can own another LLC (in any state).

It does not matter what type of company (legal business entity) they are.

Can a Minor be an LLC Member?

In most states, yes, but in some states, no. Overall this is a “gray area” and we have not fully done our comprehensive research yet. For that reason, we recommend speaking with a few attorneys in the state where you want to form an LLC.

How many LLC Members?

There are no restrictions to the number of LLC Members (owners) an LLC can have.

An LLC can be formed in any state with just 1 Member (called a “single-member LLC”) or an LLC can formed in any state with more than 1 Member (called a “multi-member LLC”).

Exception to the rule: If an LLC is taxed as an S-Corp with the IRS it can’t have more than 100 shareholders (Members).

Who Can’t be LLC Members?

If an LLC elects S-Corp tax status with the IRS, the shareholders must be individual people. The following cannot be LLC Members of an LLC taxed as an S-Corp:

• Partnerships, Corporations and Non-resident aliens
• Ineligible Corporations (ex: certain financial institutions, insurance companies, and domestic international sales corporations)

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Leave a Comment (14) ↓

14 Comments

  1. William April 3, 2018

    Can I own an LLC if I am disabled

    reply
    • Matt Horwitz April 6, 2018

      Hi William, I’m going to assume that you are receiving disability benefits from the SSA. So while the act of forming an LLC per se does not automatically cause you to lose your disability benefits, the act of becoming self-employed (which happens immediately upon the LLC being approved) will require you to notify the SSA of your self-employment. To quote SSA Publication 05-10153: “You should tell us if you take a job or become self-employed, no matter how little you earn. Please let us know how many hours you expect to work, and when your work starts or stops. If you still have a qualifying disability, you’ll be eligible for a trial work period, and you can continue receiving benefits for up to nine months.”

      The risk here is that by putting the SSA on notice of your self-employment, you may trigger a review of your medical condition. Additionally, you must be unable to engage in Substantial Gainful Activity (SGA).

      In terms of financial SGA, as of 2018, that amount is $1,970 per month for blind individuals and $1,180 per month for non-blind individuals. For more details, please read Determinations of Substantial Gainful Activity. Furthermore, if you read Section 404.1575 paragraph (a)(2) of the Code of Federal Regulations (see “General rules for evaluating your work activity if you are self-employed”), even if you don’t go over the monthly financial numbers, the SSA may still find you engaging in Substantial Gainful Activity if “… your work activity, in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individuals in your community who are in the same or similar businesses…”

      So in conclusion, while the act of forming an LLC does not automatically cause you to lose your Social Security disability benefits, it may lead to such loss of benefits if you are found to be engaging in Substantial Gainful Activity.

      In addition, the information above is not all-inclusive and there are most likely additional details that need to be considered that are specific to your situation. If you go down this road and decide to form an LLC, we strongly recommend that you work with a Social Security Disability lawyer to review your proposed business. Most importantly, you should always notify the SSA of any changes. Hope that helps!

      reply
  2. Timothy Freeney April 8, 2018

    If I own a LLC in Denver Colorado where I live and my relative wants to start a LLC in Texas where he live and I want my LLC to be part owner of his LLC in Texas, do I have to register the new LLC that we form together as a Foreign LLC?

    reply
    • Matt Horwitz April 8, 2018

      Hi Timothy, I believe no, but please double-check this by calling a few lawyers in Texas. It comes down to “is your Colorado LLC doing business in Texas”. I think no, but again, please double-check with someone more familiar with Texas. Thanks for your understanding.

      reply
      • Timothy Freeney April 9, 2018

        Thanks For the quick response and I love your work keep it up.

        reply
        • Matt Horwitz April 9, 2018

          Thanks Timothy! Will do!

          reply
  3. Chandra April 9, 2018

    Newbie here:

    Can I put myself (owner) as the member?

    Can you explain if you are a single member are we being taxed twice?

    Your thoughts on INC vs LLC?

    Thank you

    reply
    • Matt Horwitz April 9, 2018

      Hey Chandra, welcome! If you’re the owner of the LLC, then certainly… LLC owners and LLC Members are the same thing :) Nope… as a Single-Member LLC you’re not taxed twice. We actually wrote about that here: how LLCs are taxed and what is a Single-Member LLC. Also, check out LLC vs Corporation. Hope that helps!

      reply
  4. Jim April 16, 2018

    Are there restrictions on “advertising” to increase the number of individuals who are members of the LLC? Can shares of the LLC be bought to become members if an existing LLC has value and people want to buy in to the success of the LLC?

    reply
    • Matt Horwitz April 17, 2018

      Hi Jim, this isn’t our area of expertise, so you’ll need to consult elsewhere, however, yes, we believe there are restrictions to both advertising and offering parts of the business for sale. Thanks for your understanding and best wishes.

      reply
  5. Ann April 19, 2018

    If I own a LLC company and is a single member can I add my brother on to it or do I have to form a different company as a owner

    reply
    • Matt Horwitz April 21, 2018

      You can add an LLC Member, but it’s usually easier to form a new LLC. Adding a Member to an LLC requires drafting a Resolution of LLC Members (just you) agreeing to adding the new Member and to filing an Amendment with the state. Then you file the Amendment with the state. Then you amend your Operating Agreement. Then you notify the IRS regarding the change in tax classification (LLC taxed as Sole Proprietorship will now be LLC taxed as Partnership). Then your accountant should file a partial year as Sole Proprietorship and the rest of the year as Partnership. As you can see, sometimes it’s easier to form a new LLC. Both are options though. Hope that helps.

      reply
  6. Greg May 1, 2018

    If an LLC is formed by 2 married couples in a common law state, should each person be listed as a member, or can each couple be listed as a member? For example, couple 1 owns 60% and couple 2 owns 40%, should it be 60/40, or 30/30/20/20.

    reply
    • Matt Horwitz May 2, 2018

      Hi Greg, this is a great question. Although, we’ve written about qualified joint venture LLCs before, I’m not 100% sure what the proper answer is. I believe it’s 60/40, but please ask an accountant. Curious to hear what you come up with, so feel free to keep us posted (and we’ll add it to our lesson for future readers). Thanks :)

      reply

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