Key Takeaways

  • LLC ownership is broadly flexible—allowed for individuals, U.S. and non-U.S. residents, other business entities, trusts, and estates.
  • Minors can technically be members but may face legal complications due to limited contractual capacity.
  • Professional LLCs (PLLCs) are restricted to licensed professionals.
  • Entities such as corporations or partnerships cannot own an LLC that elects S corporation tax status.
  • There are no citizenship or residency requirements to form or own a standard LLC, although IRS requirements apply for tax filings.

LLC Ownership Overview

If you are wondering who can own an LLC, or limited liability company, then you are probably considering starting an LLC yourself. LLCs are flexible in both who and how one can operate a business with them. The following individuals or entities can be LLC owners in all 50 states:

  • US citizens
  • Non-US citizens
  • US residents
  • Non-US residents
  • US foreigners
  • US immigrants
  • Other LLCs
  • Other corporations (both C- and S-corporations)
  • Pension plans
  • Trusts
  • Individual retirement plans (IRAs)
  • Other legal entities

That said, non-US citizens must possess a green card or E-1 or E-2 visa to own an LLC; an ITIN card is not enough, although it will qualify you to be an S corporation shareholder. The ITIN will be needed for non-resident LCC owners when it comes time to file taxes, however, as this will identify them to the IRS. It can be obtained by filing form W-7 with the IRS. Regular US residents use their Social Security number for this.

LLC Member Eligibility by Citizenship and Residency

Anyone—regardless of U.S. citizenship or residency—can generally own an LLC. U.S. citizens, green card holders, and even non-resident aliens are all eligible to form or join an LLC. There is no legal requirement for LLC members to reside in the United States. However, non-residents must obtain an ITIN (Individual Taxpayer Identification Number) to meet IRS tax reporting requirements. This flexibility makes the LLC structure appealing for international investors and foreign entrepreneurs looking to conduct business in the U.S. 

Owning an LLC as an Individual

When an individual owns an LLC, they are the owner of a single-member LLC. To own a single-member LLC, you do not need to be a resident of the state in which you intend to register your LLC, although your registered agent does. Also, there is no age restriction to owning a single-member LLC, although if you are under 18, you may have difficulty operating it, as minors are not usually able to be a party to a contract. Or, if they are, they may not be bound to it because a minor is not deemed to be legally competent to do so, and may be able to disavow said contract, resulting in complex legal situations.

Can Minors Own an LLC?

While minors are not explicitly barred from owning an LLC, most states do not allow minors to serve as organizers or managers due to their limited capacity to enter enforceable contracts. In cases where a minor is involved in ownership, it is advisable to establish a trust or appoint a guardian or custodian to act on their behalf. This helps avoid legal complications that may arise from the minor’s potential to void contractual obligations. 

Owning an LLC as a Group

When a group owns an LLC, the owners are part of a multi-member LLC. As a member, your responsibilities, powers, and ownership interest need not be proportional to your investment in the company; these can be divided up in any way that the ownership group sees fit. Furthermore, ownership interest is not permanent unless the operating agreement specifically makes it so; current members may sell or transfer their interest and new members may be added if so desired.

Owning an LLC as an Entity

Generally, LLCs can be owned by other entities, such as other LLCs, trusts, and corporations. When such is the case, the owned LLC is usually governed by the parent entity’s members. Also, the parent entity is usually not responsible for the subsidiary LLC’s debts, if it has any.

Parent-Subsidiary LLC Relationships

It is common for LLCs to be owned by other LLCs or corporations in a parent-subsidiary arrangement. In these cases, the parent entity becomes the member of the LLC and often manages the subsidiary’s operations through appointed agents. This structure is frequently used for liability segregation and organizational efficiency. Importantly, even though the parent owns the subsidiary, each LLC is treated as a separate legal entity and typically maintains separate liability protections. 

Owning an LLC as an Estate or Trust

Estates and trusts can be owners of LLCs, but each in their own unique way. Estates are defined as all the property and money in the ownership of an individual, including their net worth, both in owned property and in debts. So, if an individual owns an LLC, then their estate is an owner of the LLC as well.

As for trusts, these are entities that manage assets, and as part of that management, they can invest in businesses as a partner or shareholder. If such is the case with an LLC, then the ownership would strictly be as a limited partner.

Types of Trusts That Can Own an LLC

Both revocable and irrevocable trusts can own an LLC. A revocable trust allows the grantor to retain control during their lifetime and easily transfer ownership upon death. In contrast, an irrevocable trust provides stronger asset protection and is often used in estate planning. When a trust is the LLC member, the trustee has fiduciary responsibility for managing the LLC interests in accordance with the terms of the trust. 

LLC Ownership Restrictions

Although there are few restrictions on LLC ownership, some states do place specialized requirements on owning some LLCs. For example, to own a professional LLC, or PLLC, one must be a licensed professional (such as a lawyer, doctor, or accountant), and all other members of the PLLC must be similarly licensed, as well.

On the federal level, if an LLC should elect to be taxed as an S corporation by the IRS, the owners are required to be individuals and US citizens, not larger entities or foreign individuals. Thus, the following cannot own LLCs electing S corp status:

  • Corporations
  • Partnerships
  • Non-resident aliens
  • Insurance companies
  • Some financial institutions
  • Domestic international sales corporations

On an individual LLC level, an LLC may stipulate membership restrictions in its operating agreement, including that only family members may be owners of the LLC.

Impact of Tax Classification on Ownership

An LLC's tax election significantly impacts who can be a member. For LLCs that elect to be taxed as an S corporation, ownership is restricted to U.S. citizens and certain resident aliens. Ineligible owners include non-resident aliens, corporations, partnerships, and some financial institutions. Failure to meet these requirements can jeopardize the S corp election, causing the LLC to default to C corp taxation. LLCs taxed as partnerships or disregarded entities do not face these same ownership limitations. 

Frequently Asked Questions

  1. Can a non-U.S. resident own an LLC?
    Yes. Non-residents can own or co-own an LLC, but they must obtain an ITIN to comply with U.S. tax reporting rules.
  2. Can a minor be an LLC member?
    Technically yes, but it’s legally complex. Most states restrict minors from entering contracts, so a custodian or trust is often recommended.
  3. Can a corporation own an LLC?
    Yes. Corporations can own LLCs and often do so for asset protection and structuring purposes. However, they cannot own an LLC that elects S corporation status.
  4. Do I need to live in the U.S. to own an LLC?
    No. There are no residency requirements for LLC ownership. Even international entrepreneurs can form and own U.S.-based LLCs.
  5. Can a trust own an LLC?
    Yes. Trusts—both revocable and irrevocable—can be members of an LLC, allowing for effective estate planning and asset management.

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