A guide for LLC companies
What has changed? A guide for LLC companies
Carta's cap table is built around corporate cap table logic — the kind used for C-corps with stock classes, option pools, and share certificates. If your company is an LLC, that logic still applies, but some terms mean something slightly different than what you may be used to.
This guide explains what the key cap table terms mean on Carta, and where the LLC reality is more nuanced than what the platform displays.
Outstanding
What Carta means by it: Issued interests currently held by stakeholders. For LLCs on Carta, this includes membership interests (Class A Units, Class B Units, etc.) and Profits Interest Units (PIUs). It does not include options, RSUs, UARs, phantom awards, or available equity plan shares — those are not considered "issued" until exercised or settled.
What to keep in mind for LLCs: PIUs appear in "outstanding" because they are legally issued LLC interests — the recipient holds them from the grant date, even if vesting hasn't completed. This is the correct treatment from a legal standpoint. However, outstanding does not mean current economic ownership. A PIU holder may appear to own a percentage of the company today while their actual liquidation participation is zero until a threshold is met. Do not read the outstanding column as a statement of who receives what in a sale or distribution.
UARs and phantom awards are correctly excluded from outstanding — they are contractual rights, not issued equity interests.
Fully diluted
What Carta means by it: All interests that are outstanding plus all interests that could become issued — options, UARs, RSUs, available equity plan shares, convertibles. The definition is: "everything that is, or can become, an interest."
What to keep in mind for LLCs: Carta's fully diluted calculation assumes every instrument eventually converts or settles into an ownership unit. That works cleanly for options and RSUs. It is less precise for LLC instruments:
PIUs are already in outstanding, so they're included in fully diluted by extension. Their threshold-based economics still aren't reflected.
UARs are included in fully diluted if they're set as dilutive. They may ultimately settle in cash and never become actual ownership units.
Phantom awards can be configured as dilutive or non-dilutive. If dilutive, they reduce available plan reserve and appear in fully diluted — even though they typically represent a cash liability, not an ownership interest.
Available equity plan shares appear in fully diluted as soon as the plan reserve is created, before any awards are issued.
The takeaway: fully diluted on Carta reflects maximum potential structural participation, not economic outcome. For hurdle-based instruments like PIUs and UARs, the actual economic outcome depends on exit value and waterfall mechanics — not on the fully diluted percentage shown here.
Ownership %
What Carta means by it: Two ownership views are available:
Outstanding ownership % — a holder's interests divided by total outstanding interests
Fully diluted ownership % — a holder's interests (including awards) divided by total fully diluted interests
What to keep in mind for LLCs: These percentages are structural ratios, not economic outcomes. For PE-backed LLCs in particular, a holder's "fully diluted ownership %" may have little relationship to what they actually receive in a liquidity event. Waterfall mechanics — preferences, thresholds, catch-ups, participation rights — determine economic outcomes. Those are modeled in the Waterfall module, not on the cap table page.
Think of the cap table as answering: "What interests exist and in what proportions?" The waterfall answers: "Who gets what, and at what exit value?"
Equity plans and pool reserves
What Carta means by it: An equity plan is a named reserve of units associated with a specific unit class. Awards issued under the plan draw from that reserve. Available (unissued) plan shares count toward fully diluted immediately. Canceled awards return to the available reserve.
What to keep in mind for LLCs:
Plans must be linked to one unit class. If your management incentive plan (MIP) issues both PIUs (linked to Class P Units) and UARs (linked to Common Units), you'll need to create two separate equity plans in Carta — one per unit class. This is a structural limitation. Legally you may have one plan; in Carta you'll have two. This is the standard workaround and does not change the underlying awards, but it will look different from how you think about your plan governance.
Sub-pools are not natively supported. If your MIP allocates a global reserve across instrument types (e.g., 60% PIUs, 20% UARs, 20% phantom), Carta cannot represent those internal buckets as separate sub-pools within one plan. Each instrument type that draws from a different class will need its own plan. You can track the intended allocation in a note field or external document, but Carta's cap table will not enforce sub-pool limits automatically.
Authorized units vs. equity plan reserve are different things. Authorized units represent the legal issuance capacity for a unit class — they don't affect fully diluted on their own. An equity plan reserve does affect fully diluted as soon as it's created. Make sure you're creating the right structure for what you're trying to represent. If you're unsure, contact your Carta support team before setting up your incentive plan.
Profits Interest Units (PIUs)
How Carta handles them: PIUs use the same framework as Restricted Stock Awards (RSAs) — they are treated as issued equity from the grant date. They appear in outstanding and fully diluted immediately upon issuance, and return to the available plan pool if canceled.
What to keep in mind: This treatment is legally defensible — PIUs are actual issued LLC interests, not options or synthetic rights. But it means your outstanding column will include PIU holders even when those holders have no current liquidation value because their threshold hasn't been met.
If a PIU holder asks why they appear as an "owner" on the cap table when they understand their economics are threshold-based, the answer is: Carta records legal issuance. For economic participation, direct them to the Waterfall module, which can model what each class actually receives at a given exit value.
Phantom equity and UARs
How Carta handles them: Phantom awards and UARs use the option/grant framework — they are not issued equity and do not appear in outstanding. They may appear in fully diluted depending on a configuration setting: "issued from plan."
If "issued from plan" = Yes: the award reduces available plan reserve and counts toward fully diluted. Use this when the award is intended to represent economic dilution (i.e., it participates like equity).
If "issued from plan" = No: the award does not affect the plan reserve or fully diluted. Use this when the award is a cash-settled liability that does not dilute equity holders.
What to keep in mind: This setting is consequential. Getting it wrong will either overstate or understate your fully diluted ownership — and misconfigure your equity plan reserve. Before configuring phantom awards, confirm with your legal counsel whether the award is intended to be dilutive to equity holders or treated as a compensation liability. Then use the setting accordingly.
If you have complex phantom or UAR structures, contact your Carta account team to confirm your specific setup is supported before your upgrade.
Questions?
Post your question in the LLC Upgrade Q&A space or join a live Learning Lab.