The 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, "I need to know how to prove ownership of a Delaware LLC. How can I do that?" 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 owenrs, 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.
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.
In addition to the Delaware LLC operating agreement, you are also able to prove ownership by showing your LLC membership certificates. Like a stock certificate, the LLC membership certificate should 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.