How to hold Stock Certificates of LLC

[teamasr]

What is the name of your state? California

I have a LLC and want to know best option for holding stock certificates for the benefit of a living trust.

Option 1) The member of the LLC in the operating agreement is written as "First Name, Last Name, as Trustee of NAME Living Trust"
Option 2) The member of the LLC is under just "First Name, Last Name" but the physical stock certificate is written as ""First Name, Last Name, as Trustee of NAME Living Trust"

Does option 2 achieve exactly the same results as option 1? Option 2 is preferred because it avoids a guarantee of a bank loan being attached to the Trust under option 1.

 

[LdiJ]

What is the name of your state? California

I have a LLC and want to know best option for holding stock certificates for the benefit of a living trust.

Option 1) The member of the LLC in the operating agreement is written as "First Name, Last Name, as Trustee of NAME Living Trust"
Option 2) The member of the LLC is under just "First Name, Last Name" but the physical stock certificate is written as ""First Name, Last Name, as Trustee of NAME Living Trust"

Does option 2 achieve exactly the same results as option 1? Option 2 is preferred because it avoids a guarantee of a bank loan being attached to the Trust under option 1.

An LLC does not have stock or stockholders. An LLC has members. If CA permits a trust to hold a membership in an LLC then the trust should hold the membership. In that case I would list it as "John Doe Trust, Jane Smith Trustee.

 

[TrustUser]

not meant to be argumentative, and the above may be correct about llcs ?

but the correct way to title real estate is jane smith, trustee of the john doe trust (notarized or dated) on dd-mm-yyyy

i use "notarized" and make absolutely sure that my trust is notarized on that day - the absolute safest way of doing things !!

there probably will be no problem if the title has the trust name first, but it should be held by a person

 

[justalayman]

You have a misunderstanding of how a trust functions The trust assets are held by the trustee of the trust, whomever that happens to be. In other words; the asset is owned by the trustee on behalf of the trust. Whether that is a member of an llc or corporate officer of a corporation or the local paperboy, there is no mandatory connection to an asset held (such as stocks of a business.).

In your example (disregarding the fact llcs don’t issue stock), the member of the llc, as a member of the llc, is irrelevent to the trust.

It appears you are attempting to have the member, as himself, to retain ownership of the stock yet hold it in trust by the trust. It’s one or the other. If the member as himself retains ownership, it’s not an asset of the trust. If it’s an asset of the trust, the member as himself no longer owns the stock.


I don’t understand your statement regarding the bank issue. Who is guaranteeing the loan you speak of; the llc or the member as himself?

Trustuser described a good way of stating ownership that is very clear.

 

[LdiJ]

not meant to be argumentative, and the above may be correct about llcs ?

but the correct way to title real estate is jane smith, trustee of the john doe trust (notarized or dated) on dd-mm-yyyy

i use "notarized" and make absolutely sure that my trust is notarized on that day - the absolute safest way of doing things !!

there probably will be no problem if the title has the trust name first, but it should be held by a person

Where did you get the impression that this was about real estate? It is about membership in an LLC.

 

[TrustUser]

please re-read exactly what i said, and you should realize that your last post was completely unnecessary

 

[LdiJ]

please re-read exactly what i said, and you should realize that your last post was completely unnecessary

I did, and you are still talking about real estate and there is nothing in the post to indicate that the issue is about real estate. Perhaps you could clarify? Or, if you were not talking to me perhaps you could indicate who you were talking to?

 

[TrustUser]

you said the following

In that case I would list it as "John Doe Trust, Jane Smith Trustee.

i simply added that in real estate, the trustee name is placed before the trust

whether that is true in an llc, i said i did not know, and was not trying to argue the point

merely pointing out that perhaps one would like to review it, being that i already knew how real estate was titled, when held in trust

 

[LdiJ]

you said the following

In that case I would list it as "John Doe Trust, Jane Smith Trustee.

i simply added that in real estate, the trustee name is placed before the trust

whether that is true in an llc, i said i did not know, and was not trying to argue the point

merely pointing out that perhaps one would like to review it, being that i already knew how real estate was titled, when held in trust

Ok, thank you for clarifying.

 

[TrustUser]

no problem. thanks for reaching out to others, and offering your help.