Limited liability companies (LLCs) possess a distinct structure regarding asset ownership. Property titled in the name of an LLC is legally held by the company itself, a separate legal entity. This differs from sole proprietorships or partnerships, where assets are directly tied to the individual owners. For instance, if an LLC purchases a building, the LLC, not its members, is the legal owner on record. Members hold ownership interests in the LLC, representing their stake in the company’s assets, including the building, but not direct ownership of the building itself.
This separation of ownership offers significant advantages. It provides a layer of protection for members’ personal assets, shielding them from business debts and liabilities related to the property. Historically, this legal structure emerged to encourage entrepreneurship by mitigating risks associated with business ventures. The LLC format allows individuals to invest in and operate businesses with greater security, fostering economic growth.