Member (LLC)
Definition
A Member is the legal term for an owner of a Limited Liability Company. Just as a corporation is owned by "shareholders" and a partnership is owned by "partners," an LLC is owned by "members." An LLC can have one member (Single-Member LLC) or multiple members (Multi-Member LLC).
Why it matters
Because an LLC does not issue "stock" or "shares," members own a "membership interest" (usually represented as a percentage) in the company. A member's rights, voting power, and share of the profits are outlined in the LLC's Operating Agreement. In most LLCs, members also manage the day-to-day operations of the business (known as a member-managed LLC).
Example
Tom and Greg start a real estate business together. They form "TG Properties, LLC." They agree to split the business 50/50. Tom is a 50% member, and Greg is a 50% member. There are no shares of stock printed; their status as members is simply documented in their Operating Agreement.