Purpose of Example
The LLC ownership example is to illustrate how to calculate a specific investor’s ownership in an LLC raising capital for a real estate project with only one class of members. The above diagram assumes the facts to the right.
- Promotors (non-cash members) will receive 60% ownership and profit of LLC.
- Cash Investors will get 40% ownership and profits of the LLC.
- LLC will own real estate project 100%.
- $100,000 is the total amount of capital required to acquire and improve the real estate project for resale or renting.
- An person investing $25,000 would get 10% ownership of the LLC (real estate project) and share in profits at 10%.