Can a Trust Own an LLC in California?

Yes. A trust can be a member of a California LLC under Cal. Corp. Code § 17701 et seq. The trust itself holds the membership interest, and the trustee acts on the trust's behalf in all LLC matters. California law does not prohibit trust ownership. The LLC must still comply with all formation requirements, including filing Articles of Organization and maintaining a written operating agreement under Cal. Corp. Code § 17701.10.

Trust as Member Requirements

The trust must be validly established under California law. When forming the LLC, list the trust as the member in the Articles of Organization. The trustee's name and the trust's name must both appear in the Statement of Information filing—California requires disclosure of all members and does not permit anonymous ownership.

The operating agreement is mandatory, even for single-member LLCs (Cal. Corp. Code § 17701.10). The agreement must identify the trust as the member and specify how the trustee exercises voting and management authority on behalf of the trust.

Trustee Authority

The trust document must explicitly authorize the trustee to hold business interests and manage LLC membership rights. Without clear trust language, the trustee may lack authority to act on behalf of the trust, creating liability exposure. The operating agreement should address trustee succession if the current trustee is removed or dies.

Liability and Creditor Protection

The trust receives standard LLC liability protection. Creditors cannot pierce the LLC veil to reach trust assets. Under Cal. Corp. Code § 17705.03, a creditor may obtain a charging order against the trust's LLC interest, limiting the remedy to distributions the trust would receive—not forced sale of the membership interest.

Tax and Succession Considerations

A trust-owned LLC is typically taxed as a disregarded entity (single-member) or partnership (multi-member) for federal purposes, depending on trust classification. Consult a tax advisor before formation. Trust ownership simplifies succession—the LLC interest transfers according to trust terms without probate, avoiding public disclosure and delays.

Formation Steps

Ensure the trust document authorizes business ownership
Draft an operating agreement naming the trust as member
File Articles of Organization with the California Secretary of State
File an initial Statement of Information disclosing the trust and trustee
Obtain an EIN from the IRS

This is general information, not legal advice. Consult a California business attorney to ensure compliance with your specific trust and business goals.