Equity or Owner's Equity - Explained
What is an Equity Interest in a Business?
Written by J. Mance Gordon
Updated at April 20th, 2024
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What is Equity or Owner's Equity?
Equity means an ownership interest. An owner's Equity is the amount of ownership interest or the percentage of ownership that an individual holds in a business entity.
What is an Equity Interest?
An equity interest is a synonym for an ownership interest in a business entity. Owners of a business hold an equity interest in the business.
What is an Equity Interest in a Corporation?
An equity interest in a corporation is ownership of shares of stock. The owners of shares of stock are known as shareholders or stockholders.
What is an Equity Interest in a Partnership?
An equity interest in a partnership simply means owning a percentage of the partnership entity. Owners of a partnership are known as partners. Partners do not have shares of stock or membership units in the partnership. A partner's interest in the partnership is simply stated as a percentage of ownership.
What is an Equity Interest in a Limited Liability Company (LLC)?
An equity interest in an LLC is ownership of membership units or a membership percentage. Members of an LLC are known as members. The members either record their ownership as a percentage interest in the business or as a certain number of membership units authorized by the business entity.