Known as treasury units, membership interests can be owned by an LLC. Treasury units can be owned by the LLC or sold to other members or outside investors. They resemble treasury stock in businesses. These units may also be retired or canceled by the LLC, which lowers the overall number of outstanding units and raises the ownership proportion of the surviving members.
LLCs can issue membership certificates, which are used as proof of ownership in the firm, even if they cannot issue stock certificates. Although not required by law, these certificates can be helpful for tracking ownership and ensuring that members are aware of their ownership stake. LLC members have the option of printing their own membership certificates or buying pre-printed ones from different web sellers.
Are Stock Certificates Required? Although they are not required for LLCs, stock certificates are useful for corporations. To demonstrate ownership of a corporation’s shares in the past, stock certificates were necessary, however this is no longer the case. Physical stock certificates are becoming less prevalent since many firms have switched to computerized ownership records. To be formal or for nostalgic reasons, some firms still continue to issue stock certificates.
For companies or LLCs, TD Ameritrade does not provide stock certificates. Instead, they offer internet platforms that can be used to view electronic ownership records. Other offerings from TD Ameritrade for LLCs include investment accounts and business banking options. Overall, LLC units perform similarly to shares of stock in a corporation, however they are more flexible in terms of structure and do not call for stock certificates. Always get legal or financial advice before establishing an LLC or before making any significant business choices.