How to Prove Ownership of a Delaware LLC

how to show ownership in an LLCThe Delaware limited liability company (LLC) is certainly our most popular entity type. More than two-thirds of all new companies that we form are LLCs! Many clients use the Delaware LLC due to the protection of personal assets and flexibility that it offers.

One of the questions that we are often presented with is, How can I show ownership of a Delaware LLC? When you form a Delaware LLC, you are not required to provide the state of Delaware with any owner / member information.

The minimal information required is great for many business owners, as they are aware this offers another layer of protection on top of Delaware's strong corporate law. However, this often leads to the question of how they will then display ownership.

Different Ways to Show Membership in a Delaware LLC

A member of an LLC, by definition, is an owner of an LLC with a vested interest in the company. Members can be people or entities from anywhere in the world. 

The Delaware LLC is governed by a contract among all the members called the "operating agreement," which all members must sign. As a member, you should have a copy of the agreement, which you can then present to a bank or other official to verify that you are a member of the LLC.

Remember, once the Operating Agreement is finalized and ratified by all members, it cannot be changed without the unanimous vote of the members; if all members choose to amend, the amended Operating Agreement must then be signed by all the members of the LLC.

In addition to the Delaware LLC operating agreement, you are also able to prove ownership by showing LLC membership certificates. Members of a Delaware LLC don’t own stock, like corporate shareholders do. Members usually split the company into percentages of ownership, or membership units. However, like a stock certificate, the LLC membership certificate can be distributed to the members, displaying the percentage of ownership they have in the business.

In many cases, clients also use what is called the "member resolutions," which can also display specific privileges or responsibilities of a member or members within the Delaware LLC. You can find templates of all these documents within our company kit that is included in our Standard and Premium packages.

If you are considering forming a Delaware LLC and have further questions about the role and responsibilities of members, or how to structure an LLC, you can call us at 800-345-2677, live chat with us or email us to speak with a specialist on these matters.

*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.

More By Andrew Millman

There are 2 comments left for How to Prove Ownership of a Delaware LLC

Bartlomiej said: Saturday, June 12, 2021

So, is also information about the management staff CEO, Director not published in the state resources? How then to prove that a given person is entitled to represent the LLC, e.g. when opening a bank account abroad? How institutions or banks verify whether a given person is actually authorized to represent the company - only by showing its internal documents? Thank you in advance for clarification. Bartlomiej.

HBS Staff replied: Monday, June 14, 2021

Hello Bartlmiej,

Thank you for reading our blog and for your question. None of the Ownership information for an LLC is provided to Harvard Business Services nor to the State of Delaware. The way the Ownership is shown in an LLC is through the LLC Operating Agreement. This is a private confidential agreement that is held internally within the company and helps to show who owns what, and how the company is run on a daily basis.

For opening of bank account and managing company bank account many clients may often have what is called a "Banking Resolution".Every bank and banker is different as far as what they require to open the bank account. It would be best to contact the bank you are looking to work with to see what they would require to open and manage the account. We are happy to help provide any requested documents.

We have free LLC Operating Agreement Templates and a free Banking Resolution available on our website.

Michael Forge said: Wednesday, March 24, 2021

Hello, I'm wondering how I can find out if my father was a member of an LLC in Delaware for an infringed trust

HBS Staff replied: Wednesday, March 24, 2021

Hi Michael,

Thank you for reading our article. The ownership of a Delaware LLC is not on public record, so to show ownership in a Delaware LLC it is shown via an Operating Agreement. This Operating Agreement is typically kept on file internally within the company and not required to be disclosed to the State of Delaware nor to the Registered Agent. So to find out if he was an owner this document would help to show who the Owners of the company are.

Leave a Comment
* Required
* Required, will not be published