LLC vs. club membership: why the structure matters

If you're comparing supercar co-ownership to a supercar club, the most important question isn't price. It's the legal shape of what you're buying. The wrapper determines what happens to your money if the platform fails, who has authority over the car, and whether your 'share' is actually an asset or a contract right.

What an LLC actually is

A Limited Liability Company is a business entity that holds title to property, in our case, a single specific vehicle. Each LLC at RYDA holds exactly one car. The members of the LLC (you and up to four other co-owners) are the legal owners of the company that owns the car. Member-managed governance was a deliberate choice: it gives co-owners real authority over material decisions rather than passive subscription rights.

When you 'buy a share,' you're being added to the LLC's member register. That's a registered, transferable ownership interest, not a contract right against a sponsor.

What 'member-managed' means and why we picked it

An LLC can be structured two ways: manager-managed (a sponsor or fund makes decisions on behalf of passive investors) or member-managed (the members themselves vote on material questions). RYDA LLCs are member-managed. You and your co-owners hold authority over: any sale or replacement of the vehicle (75% supermajority required), modifications, additional capital calls, and replacement of operational service providers.

This is not a cosmetic choice. Manager-managed LLCs that look like collective investments have, in some cases, been treated as securities by the SEC under Howey. Member-managed LLCs where the members govern the asset more closely resemble country-club, yacht-club, and jet-card structures, which the SEC has historically not regulated as securities. We engaged corporate counsel before forming the first LLC and built the governance to sit firmly in the latter category.

How a club membership compares

A club membership is a contract. You pay an annual fee (often $30,000–$80,000) for a defined number of access days. The club owns the cars. If the club shuts down, the cars go to the lender, the operator, or the receiver, not to the members. The membership has no asset backing.

That's not a flaw in the club model. It's the model. Clubs trade asset-backing for variety: rotating fleet, predictable annual budgeting, no commitment. They make sense for a specific kind of buyer.

The four practical differences

First, title. The LLC owns the car. Your share is a registered membership interest in that LLC. A club fee buys you days of usage; the operator owns the asset.

Second, failure scenarios. If RYDA the company shut down tomorrow, the LLCs survive: members appoint a new operating service provider (the Management Services Agreement is between the LLC and RYDA, not the LLC and members), and the cars are unaffected. If a club shut down, members lose access immediately.

Third, exit. At the end of the 2-year hold, the LLC sells the car and distributes proceeds pro-rata to members. Modeled residual is roughly 90% of buy-in; actual depends on market. A club membership is consumed annually with no exit value.

Fourth, governance. As a co-owner you vote on questions about your specific car. As a club member, the operator chooses what's in the fleet and you accept whatever rotates through.

What the LLC structure isn't

It isn't an investment. The car will depreciate. Co-ownership shares are not registered securities and are not offered for investment purposes. The case for buying one isn't a return, it's that you'd actually drive a Ferrari 30 to 60 days a year and the math beats the alternative ways to do that.

It also isn't a tax shelter. RYDA does not provide tax advice; consult your accountant. The LLC files a partnership return; depreciation passes through. None of which is a reason to buy a share, it's only a feature for members who'd already drive the car.

Bottom line

A share in a member-managed LLC is asset-backed. You're a registered owner of a company that owns a car. A club membership is a contract for access. Both are legitimate products. They are not interchangeable, and the platforms that conflate them are doing it on purpose.