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Managing the LLC

In general, the limited liability company (“LLC”) can be managed by either members or managers in accordance with the guidelines set forth in the Articles of Organization or more commonly the Operating Agreement .

One of the most important aspects of the LLC is how the company will be governed and managed. There are two basic forms for the management of the LLC. The first form is present when members themselves manage and operate the LLC. The second form is present when members elect one or more managers to govern the LLC.

In the case of a single member LLC, it is more common for the LLC to be managed by the sole member. However, in the case of a multiple-member LLC, it is more common to have the LLC be managed by one or more member elected managers. The reason for this is that by appointing one or more members as managers, it helps clarify who has the authority to bind the LLC, an issue that has lead to the majority of litigation involving LLC members.

All state statutes permit the Articles of Organization and the LLC Operating Agreement to determine if the LLC will be managed by its members or by elected managers.

The members or managers elected as managers should be qualified to manage an LLC, as they will be responsible for the LLC’s daily operations and will be required to make crucial business decisions. Typically, all managers are LLC members.

The determination of which members shall serve on the board of management should be given careful consideration.