Frequently Asked Questions

What is the difference between a member-managed and manager-managed LLC?

A Limited Liability Company (LLC) can be managed in two ways: member-managed or manager-managed. The distinction between these two management structures lies in who has the authority to make decisions for the company. In a member-managed LLC, the members, or owners, of the LLC are actively involved in the day-to-day operations of the business. They have the authority to make decisions and are responsible for managing the business. This type of management structure is common in small businesses where the owners want to be involved in the daily operations of the company. On the other hand, in a manager-managed LLC, the members appoint a manager or managers to run the business. The manager can be a member of the LLC or an outsider. The manager has the authority to make decisions for the business, and the members are not involved in the daily operations. This type of management structure is common in larger LLCs or when the members do not have the time or expertise to manage the business.