Member-Managed vs. Manager-Managed
A decision you must make when starting a limited liability company is whether your LLC will be member-managed or manager-managed. Though you may change your mind later, it is better to think about your preferred structure at formation rather than needing to amend your filings. Whether you start an LLC as member-managed or manager-managed depends on what level of authority you want your members to have in the business.
A member-managed LLC gives each member total control over the business. Though their powers may be limited by the Operating Agrement, members will have the authority to act on behalf of the LLC, which includes executing agreements, signing checks, and anything else a top executive is typically permitted to do. This does not mean each member’s decision making authority is unilateral; your Operating Agreement should still specify when and how members may act — such as requiring a majority or unanimous vote before actions may be taken.
Member-managed LLCs are the default in most states and will be your structure unless you explicitly request otherwise.
A manager-managed LLC limits authority to a board of managers that has been elected by the members. It is analogous to a board of directors in a corporation. This is the structure you will want if your LLC includes silent partners — partners who wish to invest and own a part of the LLC, but do not take part in the day-to-day decision making. The board of managers may include any or all of the members as well as any other people the members elect, thus making a manager-managed LLC a bit more flexible in terms of governance.
Specify your preference in your LLC’s Articles of Formation, and then clarify each member or manager’s authority in the Operating Agreement.
Incoming search terms:yhs-fh_lsonsw (96), member managed vs manager managed (28), member managed LLC (5), manager managed llc (5), llc members vs managers (3), llc member managed vs manager managed (2), manager managed llc disadvantages (2), manager-managed llc (1), manager managed (1), limited liability company members vs managers (1), llc member vs management managed single member (1), llc member or manager managed (1), mber managed vs managed member in an LLC (1), member managed vs manager managed llc and SE tax (1), who manages llc in delaware if operating agreement is silent (1), what is a member managed LLC (1), state distinguish between a member-managed LLC and a manager-managed-LLC (1), pa llc manager managed (1), members vs managers game (1), member-managed llc (1), member vs manager in limited liability company (1), member vs manager (1), member versus manager in louisiana llc (1), llc member managed or manager managed (1), LLC member managed (1), difference between member managed and manager managed (1), delaware llc authority of member manager (1), change member manage to manager managebnaage (1), change llc to member managed (1), can you elect member managed LLC with one member (1), california llc manager vs member (1), benefits of member managed (1), benefits of a manager managed LLC (1), arizona foreign llc manager-managed vs member-managed (1), difference between member managed and manager managed llc (1), Does your state distinguish between a member-managed LLC and a manager-managed-LLC? (1), fl member managed llc (1), llc manager vs member (1), llc manager managed vs member managed (1), LLC - member based and manager based (1), LLC - Limits on manager (1), limited liability company members versus managers (1), how to form a Delaware manager managed LLC (1), how to change from a manager mangaed LLC to a member manages LLC in california (1), florida llc member vs manager (1), florida difference between a manager managed and member managed limited liability company (1), ADVANTAGES AND DISADVANTAGES OF MEMBER MANAGMENT AND MANAGER MANAGEMENT IN LLCS (1)