Georgetown Trust Blog

Company Ownership for an LLC and an IBC

Posted by David J Drummond on May 12, 2016 10:39:29 AM

Globes

Both the Limited Liability Company, or LLC, and the International Business Company, or IBC, are corporate structures that can be a smart choice for the savvy investor. 

Whether you’re interested in protecting your assets, limiting your legal liability or just turning a profit with an international company, one of these two options is likely a great fit. To determine the best choice for your corporate structure, take a closer look at company ownership for the two options, how they are alike and how they differ. 

Company Ownership for an LLC 

In an LLC, shares are not a requirement for ownership. Instead, the LLC is divided according to the operating agreement, which is created at the inception of the LLC.  

An LLC can be owned by a single person or by a small group of people, and the division of ownership is decided right at the beginning. Ownership can be based on percentages, allowing two people to divide the company 50/50, 60/40 or any other combination of their choosing.  

Together, all of the owners of the LLC make their decisions. In the case of a larger LLC with multiple partners, a vote can determine the outcome of any disputed issues. There can, however, still be a manager that handles the day-to-day operations based on the wishes of the shareholders.  

Why the LLC Ownership Structure is Advantageous 

The LLC structure is likely a good choice for those with smaller corporate structures as well as those who want to limit ownership to a couple of people. If, for example, you want to run an LLC on your own, you can serve as both the primary owner and the manager.  

This allows you to take greater control over operations while still limiting liability. An LLC ownership structure also makes it simpler to give partial ownership to a contributing individual who spends time, rather than money, to get the business off the ground.  

Company Ownership for an IBC 

The beneficial owners of an IBC are the individuals who hold stock share certificates. Each stock share certificate is worth a set amount as well as set percentage of the company.  

Upon the creation of an IBC, it needs to be specified how much each share is worth. If you have $100,000 in the IBC, and you issue 100,000 shares, then each would be worth $1.  

Alternatively, you can also withhold 90% of the shares for future capital raises in the company, and give out only 100 shares, each of which would be worth $100. Ownership percentages are determined by the number of the share certificates that are issued; not the number of shares at the time of establishment.  

Why the IBC Ownership Structure is Advantageous 

The IBC ownership structure is very straightforward, making it easy for investors to know exactly how much of the IBC they own. When it comes time to share the profits, it is once again very straightforward and simple.  

As distributions are paid out on a per share basis, each shareholder understands exactly how much they should receive. An IBC is run by the directors, but those directors are elected by the shareholders. While a director can also be a shareholder, they still have to be chosen by the remaining shareholders. 

While there are very clear distinctions between the company ownership breakdowns of the IBC and the LLC, there is no question that both can be beneficial corporate structures, particularly when they are based offshore in a jurisdiction like Belize. 

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Topics: International Business Companies