A member is the term for an owner in a limited liability company (LLC).
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Last Updated: February 27, 2026
In the business context, the definition of a member is an individual or entity holding a membership interest in a limited liability company (LLC).
LLC members own the limited liability company. Most states don’t place restrictions on ownership, so an LLC member may be an individual, corporation, other LLC, or foreign entity. There is generally no limit on the number of members an LLC can have. In most states, an LLC is permitted to exist if it has at least one member.
A limited liability company is a legal entity that protects owners from personally absorbing the debts and liabilities of the business. Formal registration takes place with the state government. Several steps go into this process (outlined in this guide on how to start an LLC).
LLCs are subject to pass-through taxation. The business is taxed at the LLC member level and not at the business level. In comparison, corporations are taxed at both the business and personal levels.
Each state has slightly different requirements, regulations, and fees surrounding limited liability companies. Entrepreneurs would be wise to do thorough research before deciding to form an LLC to help ensure it’s the right fit for their business.
Limited personal liability is the primary advantage of being a member of an LLC. If something goes wrong with the business, a member is not held personally liable. LLCs can have flexible management structures, depending on the needs of the business, as well as flexible allocation of profits and losses. Pass-through taxation is also beneficial.
Being an LLC member, and by extension, having an LLC can have some disadvantages, too. LLC members may be subject to payroll and self-employment taxes, which can be higher than expected. Some licensed professionals, such as doctors, lawyers, or accountants, aren’t allowed to form an LLC in some states.
Another disadvantage of an LLC is that it can be tricky for members to transfer their ownership interest in the company. Adding or removing members usually requires the consent of all the other members.
There are several ways management and membership can be structured. Much of this depends on the relationship between parties involved and the type of business. The two main types of LLC management structures are member-managed and manager-managed.
The most common LLC structure is member management. This means that all the members share the daily responsibilities of running the company. One of the reasons this structure is common is that most limited liability companies are small businesses that don’t need a separate management structure to operate successfully. Most states default to the member-managed structure if there is no indication otherwise.
For passive investors, a manager-managed structure may be preferable. Large businesses may also benefit from a manager-managed structure. This allows for additional oversight and organization.
An operating agreement is an important document that details how a limited liability company will operate. Most operating agreements include a section that defines who the members are, how members can be added or removed, and more. Other provisions may include management structure, dispute resolution, profit and loss sharing, ownership transfers, member rights and duties, and the process for adding a member, to name a few. Most states don’t require an operating agreement, but it is highly recommended.
A member is an owner of a limited liability company. A business owner who’s considering the LLC structure should take time to consider the benefits and drawbacks of this business type.
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ZenBusiness offers a variety of services to help entrepreneurs start and grow their companies. Whether someone needs help starting an LLC, writing an operating agreement, or staying compliant with state requirements, ZenBusiness has experts who are ready and waiting to help.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
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