LLC Membership Certificates

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Your articles of organization indicate whether or not the LLC issues membership certificates to document ownership.

If this is not explicitly defined in the articles of organization, refer to the corporations code in your state of formation to determine what is the default behavior for your LLC.

A membership certificate is a printed document that evidences ownership in the LLC. You can create one from scratch or purchase a nice template as part of a company kit. The certificate of membership usually contains:

  1. The name of the LLC and state of formation.
  2. The number of members in the LLC as of the date of certificate issuance.
  3. The name of the owner of the certificate and the percentage ownership it represents.
  4. The benefits to which the owner is entitled.
  5. The date of issuance.
  6. Execution by signature of an authorized member (e.g. the secretary) and a witness.

Many templates also contain a bill of sale portion if the owner of the certificate sells his ownership share. This portion documents the date of sale, sale amount, new owner, and signatures executing the sale. Transfer of ownership must follow the rules outlined in the operating agreement. LLCs also often keep a separate membership roster and transfer ledger to keep track of current membership.

Key Takeaways:

  1. Only LLCs that are evidenced by membership certificates need to create and issue certificates.
  2. Membership certificates document ownership and transfer of ownership.

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