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Written by : Jaqueline Tennill |
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today we're talking about how to fill out llc membership certificates an llc membership certificate represents your ownership of a limited liability company filled out properly it gives you proof that you own the company in addition it shows the taxing authorities and anybody who wants to sue you that you have completed the legal requirements by properly completing your llc formalities so that your llc is more likely to hold up under a legal attack or tax on it hi i'm the business guy and i've been in the company formation field since 1991 our company started in 1906. i believe we have over 80 000 clients in our database we have attorneys on staff and we are the nation's leading asset protection and company formation firm and today we're talking about how to fill out llc membership certificates and be sure to watch all the way to the end because we cover important information that you need to know and by the way if you're watching this on youtube please click the like button below so youtube promotes it and we can help out a lot more people and you can also click the subscribe button so that when more videos come out like this you'll be up to date right away now certificates have different formats sometimes the state or country where the company is formed is pre-printed on the certificates other times you will need to write it in sometimes the number of membership units is in the upper left hand corner and sometimes it is a separate blank shortly after the name of the member so just fill it out as the certificate is formatted okay now let's take a closer look at some llc membership certificates and what you do first of all you'll see the name is pre-printed or you'll need to fill out the name of the company next you'll see the number of units that's the number of individual units that are available that the company can issue you'll also see a blank line that shows the name of the member now this can be a person it can be another company it can be a trust or other business entity then you'll see the number of units allotted to that particular person company or trust you'll have a place where you can fill out the date the certificate was signed and then you'll see signature lines for the members if it is a member managed llc or the managers if it's a manager managed llc finally in the center you will squeeze the corporate seal or llc seal in this section the llc seal is usually found in a corporate record book now keep in mind this information isn't legal advice for legal advice speak to a licensed attorney we have license attorneys on our staff if you need some help now first of all the number of units now there are two ways to do this you can either write the number of units this particular certificate represents or you can enter the percentage the standard way is to write the number of units i prefer for simplicity to write the percentage so in this example it shows that 100 of the units are owned by pat smith or pat smith is the sole member of this particular llc again instead of the percentage you can write the number of units so in this example it's 50 out of 100 units are owned by pat smith now let's say your llc is owned inside of a trust okay if it's on the side of a trust you'll see that the name of the trust as well as the name of the trustee is included in this example it says abc trust in parentheses cook islands klm limited comma trustee owns 100 of the units of this particular limited liability company so that's how you fill it out if a trust owns the llc if a trust is the member of the llc you need to write both the name of the trust and the name of the trustee so you need to enter both not just one now on occasion we'll set up two llc's to go inside of an asset protection trust because we have an ira sub trust so the assets that represent an ira go in that portion of the trust including this llc so if this particular llc for example is owned by a subtrust say for an ira it'll say ira subtrust of abc trust cook islands comma klm limited trustee so you name the subtrust you name the trust that subtrust is a part of and you name the trustee so all three now let's say for example your llc is held directly inside of a self-directed ira you simply fill it out usa trust comma inc that's the custodian comma custodian for ira of pat smith account number one two three four five let's say the llc is inside of a self-directed pension plan you fill it out usa trust comm inc pension admin that's the pension administrator for pat smith account number one two three four five now sometimes you need to fill out llc membership certificates different ways for different people for example let's say you're opening up a bank account in the name of the llc typically you fill out the certificate in your own name for the bank because if it was in a trust the bank would want to see the trust they may need to see id and articles from the corporate trustee etc so it might be in your best interest to fill out the certificate in your own name first and then you avoid that certificate and fill out another certificate with your trust slash trustee owning the company so i hope you found this valuable and to help you understand how to fill out llc membership certificates so if you want to form a us or offshore llc feel free to give us a call at 1954 or visit assetprotectionplanners.com and fill out a free consultation form and be sure to share this video with others and subscribe below this is the business guy so you
Thanks for your comment Alleen Houglum, have a nice day.
- Jaqueline Tennill, Staff Member
hi this is Lee Phillips I'm an attorney and this is another piece in my series on YouTube about corporate formalities what you do when you create and operate a corporation or a limited liability company and the two animals are quite similar in their care and feeding we'll assume that you've set up your company you file all the stuff with the state you've signed you everything they need you've paid your money now what happens well one of the first things that you need to do is decide who's the owner or owners of your company that maybe you maybe you and your husband wife maybe you and your partner's and I'm not calling a partner in a partnership sense I'm just saying people you work with in the company but who owns it well you need to define who owns it sometimes that's required in the Articles of Incorporation or the articles of organization which are the papers you file with the state to create the company but it's almost always required or should be a good idea anyway to include that sort of stuff in the bylaws the rules of the game if you're a corporation or the operating agreement the rules of the game if you are an LLC they're the same thing but we call them by different names so that we know that's corporation that's LLC that should talk about who the owners are and what percentage ownership they have and in a corporation a lot of the times the corporate corporation will keep all this what we call Treasury stock no stock certificate in issue is just mine it's the company's and in the LLC they can keep back ownership by the LLC of a percentage or a number of shares of the ownership of the LLC so you don't need to issue all of the shares at once and by the way one things that may be asked on the Articles of Incorporation is how many shares you've been issue if you issue 10 trillion shares the states going to charge you you get the first 20,000 shares for free meet state filing fees and after that they start tacking on and I don't know what the number is it might not be 20,000 but they start tacking on additional fees so you don't want to issue six trillion shares of stock if I own the company one share of stock is all I need one of the things that I'm going to do when I get you into court and Sue you and so I'm going to say okay who are the owners of the company how do you know that there are owners of the company if you say well I'm the owner of the company okay did you issue a stock certificate or a membership certificate is what we call it in an LLC how do we know that you're the owner of the company well it says it in the bylaws it says it in the articles of further the operating agreement that's fine but I also want to see in actual stocks or to you if I'm going to invest in your company and I'm going to be a third party guy silent out there I'm going to give you the money what do I want back well I want a stock certificate back or a membership interest you to get back which shows that piece paper shows that I own X percent of this company somebody shares in this company if you haven't actually issued the stock certificate or the membership interest certificate then when I get you into court I've got an argument your honor this wasn't a real company they didn't even bother to define the ownership of the company the guy knew he owned it all it was his no problem it's his all regal I want you to let me pierce the corporate veil then go after the guy directly so one of the elements that I'm going to be looking for in the lawsuit is where is the ledger you have a stock ledger membership interest ledger where you write down certificate number one issued on such-and-such a date to so on so for so many shares and I want to see that ledger and then I want to see the stock certificate which goes through a certificate number one and unless you haven't jumped these hurdles actually done the paperwork that's one indicia of the fact that a you didn't treat this like a real company why do I have to treat it like a real company and the courts will if they stack up enough of these against you they will do what's called pierce the corporate veil and they will come after you personally so these little steps none of them are fatal particularly a couple of them are pretty close but they all add up it's the weight of the evidence how did you treat your company if you give IBM 100 bucks you want a hundred bucks and stock back don't you same thing think about how do I want my company to act how do I want to be treated and if it's third party arm's length we've got a good chance of keeping the limited liability and these corporate formalities of which issuing the stock the ledger all that stuff is one of them it's these corporate formalities that add up that either give the court the tip in your direction to protect you with the limited liability or give the tip to the court in the other direction to pierce the corporate veil so these are really important issue your stock your membership interests
Thanks elputokrio4 your participation is very much appreciated
- Jaqueline Tennill
About the author
I've studied phenomenology at Amberton University in Garland and I am an expert in stochastic process. I usually feel blank. My previous job was kindergarten teacher I held this position for 9 years, I love talking about livestreaming and dominoes. Huge fan of Viggo Mortensen I practice cross-country skiing and collect baseball cards.
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