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Ask Jade February 2023 - Who Is the Owner?
January 31, 2023
Who is the owner?
Ownership differs based on the type of business:
- Sole proprietorship – that sole person is the owner. No distinction between business owner and nosiness.
- Partnership – two or more people operating a business, a partnership is formed by default.
- Equal ownership is assumed unless you have a Partnership Agreement, in writing, stating otherwise.
- No distinction between business and owners (no liability protection).
- LLC – separate entity, business and individuals are separate and distinct.
- Owners = the members of the LLC.
- Ownership % must be set forth in an Operating Agreement (unless you are a solo member LLC).
- LLC’s can also have managers. Managers can be members/owners, or not. Management and decision making for the company is dictated by the OA.
- Corporation – separate entity, business and individuals are separate and distinct.
- Owners = shareholders.
- Shares must be issued. This indicates % ownership based on the number of shares authorized and how many you own as a shareholder.
- A shareholder agreement must be executed if there is more than one shareholder.
- Non-profit – no one owns it. Does not issue shares. Board of directors controls. Bylaws govern.
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