Equity or Owner's Equity - Explained
What is an Equity Interest in a Business?
Written by J. Mance Gordon
Updated at April 20th, 2024
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
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.