A business owned by stockholders is known as an LLC, a partnership, or a corporation. While the terms are often used interchangeably, each one of those terms has distinct meaning that should be considered when discussing ownership. For example, a corporation is a legal entity that can own shares of stock. A partnership is a legal entity that can hold two or more entities as members.
An LLC is a type of corporation with limited liability. LLCs are particularly important in the legal world because they have limited liability. A member is entitled to vote on the decisions made by the LLC. The LLC is essentially an LLC for the most part, with the exception of the members.
LLCs are similar to corporations in the sense that they can be owned by individuals. However, unlike corporations, LLCs can own multiple entities (or at least a few) as members.
LLCs are for-profit corporations. They are not, however, subject to the same corporate structures as corporations. An LLC can have only one member, for example, and it does not need to have its own board of directors or any other corporate structure.
For the purposes of this discussion, the term “for-profit corporation” refers to an LLC. LLCs are corporate structures. They are not for-profit structures, and they have no inherent rights to profit from the profits that their members make. For-profit corporations, by contrast, are profit-making entities. They have the ability to charge and collect taxes and are subject to being audited.
While the idea of for-profit corporations is not new, the term is often used to describe companies that are in the business of making money. In this case, the company is called a stockholder-owned business because it is owned by stockholders. These stockholders are the real owners, which in turn gives the company a legal existence.