Many people, including judges and the IRS, continue to confuse limited liability companies with corporations. They are not interchangeable entities. One of the most important differences is with respect to the ownership interests of the two companies.
In your typical corporation with one class of stock your economic interests and your voting interests are in direct proportion to the number of shares you own compared to the total number of shares owned by all shareholders. That may be true in an LLC as well, but it does not have to be. In fact the default rule under the new Iowa LLC Act is one member-one vote.
More importantly, assuming there is not a buy-sell restriction on your stock, when you sell the stock the voting rights go with it. This is not the case in an LLC. Your buyer will only obtain the economic interest; the governance rights can only transfer to the buyer with the unanimous consent of the other members (unless your operating agreement provides otherwise).
The point is this: The economic rights and the governance rights in an LLC, unlike a corporation, are separate rights, unless otherwise provided in the operating agreement.
-Marc Ward
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