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An LLC can be managed by Members or by Managers. Let’s discuss the officer titles those roles can have.
For most, LLCs are already confusing enough.
Now throw in a bunch words that start with “M”, sound really similar, and are challenging to understand, and great… now you’re scratching your head thinking, “Holy crap! This LLC stuff is confusing!”
We understand. It certainly can be a lot to digest, but let’s dive in and define all these “M” words and figure out what they all mean.
Before we define LLC titles, like Member, Managing Member, and Manager, we first need to understand the differences between a Member-Managed LLC and a Manager-Managed LLC.
FYI: To make this article a little easier to understand, we’re going to underline some words so your brain doesn’t think it’s reading “Member” when it says “Manager” and vice a versa.
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LLC Management (Member-managed vs. Manager-managed)
In the majority of states, you are required to disclose how your LLC will be “managed“.
Will it be managed by the all the Members, will it be managed by some of the Members, or will it be managed by hiring outside Managers?
– If an LLC is managed by all the Members, this is called a “Member-Managed LLC”.
– If an LLC is managed by some of the Members (but not all of the Members), this is called a “Manager-Managed LLC” (with internal management).
– If an LLC is managed by people hired specifically to run the company, but they do not own the LLC, this is also also called a “Manager-Managed LLC” (with external management).
Additional reading: For more information on Member-Managed LLCs vs Manager-Managed LLCs, please see this article.
Reminder: Even if the state where you are forming an LLC does not require you to disclose your LLC’s style of management, you will still need to choose your LLC’s style of management in order to complete your LLC’s Operating Agreement.
Members, Managing Members, and Managers
Let’s define the the different titles that can be used for people involved in an LLC.
Member(s):
An LLC Member is an owner of an LLC.
Managing Member(s):
An LLC Managing Member is someone who both owns the LLC, as well as runs the day to day operations, makes business decisions, and has the authority to bind the LLC into contracts and agreements.
In short, a Managing Member is both a Member and a Manager.
Manager(s):
An LLC Manager is a person (or persons) responsible for running the day to day operations, makes business decisions, and has the authority to bind the LLC into contracts and agreements.
There are 2 types of LLC Managers: Internal Managers and External Managers.
– An Internal Manager is someone who runs the LLC as well as owns it.
– An External Manager is someone who runs the LLC, but does not own it.
Which Title Should I Use?
Tip: This stuff can be confusing and often sounds like a riddle (the words all sound similar). We recommend reading the following section (and maybe even the whole article) twice.
• If you own (some or all of) the LLC and the LLC is Member-Managed, you have the choice of using the title “Member” or “Managing Member”. The term “Managing Member” is more specific, as it states that you both own and manage the company.
• If you own some of the LLC and the LLC is Manager-Managed by other Members besides yourself, you must use the title “Member”. You cannot use the title “Managing Member” or “Manager”.
• If you own (some or all of) the LLC and LLC is Manager-Managed by an external person or persons, or a 3rd party, you also must use the title “Member”. You cannot use the title “Managing Member” or “Manager”.
• If you own (some or all of) the LLC and LLC is Manager-Managed by you, you can use the “Manager” or “Managing Member”.
Most LLCs are Member-Managed (and therefore run by Managing Members)
Most of our readers are small business owners, where they either own their companies 100%, or they have a business partner or two (and they share ownership).
In the majority of these cases, the LLC Members all want to take part in running the day to day operating and making business decisions.
In this case, the LLC has a Member-Managed style of management and all the Members can use the title “Managing Member”. This is the simplest structure and the simplest form of management, and again, this is the most popular.
Takeaways
The world of LLCs and their style of management can get quite complex, and depending on who owns your LLC and how it is managed will dictate the title that you use.
Again, most people own their LLCs outright (or with partners) and are Member-Managed, so “Managing Member” is the most common, and the most appropriate LLC title to use for most people.
On the other hand, there are times when not all LLC owners want to manage a company. In some cases, some of the Members run the business while other Members don’t, and in other cases, none of the LLC Members run the business. In both of these examples, the Members just use the title “Member”.
We hope that helps you further understand LLC titles and management structures.
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
For member managed LLCs to avoid federal securities laws issues I believe that all members need to have ‘full and equal’ say in the LLC managing decisions. I was wondering if this means each member should have one vote (no silent partners), or if each member needs to have an equal share of ownership and thus voting rights (hinders growth – investment), or if this just means that there should not be one member that can over ride all decision by having more than 50% ownership and complete voting control. Even with two owners at 45% and third owner at 10%, and with these owners having the same voting percentages as ownership percentages- Is this situation considered to be that each member doesn’t have ‘full and equal’ say in the management decisions? What does legal precedent define ‘full and equal’ say? Are there different interpretations by each state?
Hi Enrique, I’m not sure about this.
When I originally left a comment I appear to have clicked the -Notify me when new comments are added- checkbox and from now on whenever a comment is added I recieve 4 emails with the exact
same comment. Is there an easy method you can remove me from that service?
Thanks a lot!
Apologies for the inconvenience. In those emails you receive, there is a link at the bottom to unsubscribe.
If an Llc. owners (a fiduciary) charge mgmt, fees through a company that bought their company but they maintain mgmt. control of the portfolio and the mgmt. fees generated are creating a bonus to same from the purchasing entity(7 figure annual bonus) How is this not double dipping or is it o.k. under current financial rule or laws.
Thank You.
Apologies James, but I can’t follow and don’t understand the question.
I am a owner of sole prietorship LLC, I don’t want my name or home address anywhere in the public to see .I changed the business address to Virtual office, hired a registered agent but my name is still as the manger, how do I change it.
It depends on the state and what is required. In what state is your LLC located?
Hello, my family and I are forming an LLC. What is the best way to set the titles and roles for everyone?
Hmmm, hard to answer this generically. What are you forming the LLC for? Do you want everyone to have an equal say in how things are run?
I am trying to file for a Michigan LLC but I do not see the option to add my Mother and Daughter as members on the application. How would I ensure they are members/owners of the LLC as well?
Hi Kiana, for a Michigan LLC, Members aren’t listed on the Articles of Organization. You’ll list all the Members in the Michigan LLC Operating Agreement. Hope that helps.
Hello,
1. How should a two person LLC incorporated in state of Texas take care of taxes? How to offset profits or losses on individual tax returns and what is the role of self employment tax in such context?
2. In context of finding work, can one person market themselves with Title of Advisor, Consultant, Principal advisor, or something else which you can suggest, so that finding full time contracts at client site is not problematic. Please share your opinion.
Thanks,
VK
Hi VK, I’d recommend working with an accountant and they’ll take care of all that. They’ll file your LLC’s 1065 Partnership Return, issues K1s, and help with your personal taxes (where you’ll pay self-employment tax). And yes, you can use any of those titles for marketing purposes or getting new clients. Hope that helps.
This is my entity name :
Saa international negoce LLC. I live in new york , I need to do an EIN and do an resale certificat. Can you help ?
Hi Assohoun, yes, you’ll need an EIN for your New York LLC. Please see how to get an EIN for a New York LLC. You’ll want a Resale Certificate if you are buying goods to resell and you don’t want to pay sales tax on those purchases. Hope that helps.
I am forming a new LLC in North Carolina. My wife & I are partners, but she is not involved in the operation of the business. Do I list myself as Managing Member and her as Member on the Articles of Organization under Company Officials?
Also, if we decide to run a different business under the same LLC with a different DBA in the future and she is involved in the operation of the new business, will the titles mentioned above pose any problems?
Hi Mike, in your first example, that sounds like a Manager-managed where you are the Manager and your wife is a Member. In the second scenario, that sounds like a Member-managed LLC where you and your wife are both Managing Members. Unless there is some need to restrict/limit your wife’s power in the first setup, maybe keeping it Member-managed and you both being Managing Members is the easiest. Hope that helps.
This is my Operating Agreement nightmare. We purchased a small commercial property in California in 2015 with another couple, with a SBA loan as a long term investment. All four of us were borrowers, guarantors and each 25% owners of the LLC according to the lender. My husband passed away unexpectedly and I discovered only the husband’s names were on the LLC and the Operating Agreement. No spousal consents were ever requested from the wives. The Operating Agreement stated that if a member dies the other member has an option to buy at Fair Market Value. This couple refused to pay Fair Market Value so I was sued by the LLC I own 50% of. It’s unbelievable how an Operating Agreement which has no notarized signatures can supersede a bank loan for the property. During arbitration the arbitrator refused to acknowledge the lender’s documentation and only took into account the Operating Agreement signed again only by our husband’s. Mistake #1; If the senior SBA loan officer took 5 minutes to make sure all four of us were on the LLC and the Operating Agreement it would have saved me a lot of needless stress and money trying to defend myself. Mistake #2; If the attorney who formed the LLC and the Operating Agreement would have asked for spousal consents since this is California, a community property state but he stated our husband’s never asked about spousal consents. This should be in law 101. I think when an LLC is a real estate holding company only the signatures on the Operating Agreement should be notarized and require mandatory spousal consents if any of the members are married. This should be in Operating Agreement 101. I hope my story helps others avoid a nightmare like mine. The California legal system has helped this couple steal from my family while hiding their names behind the LLC.
Hi Dana, that sounds like such a horrible experience to go through :( Far beyond sad and frustrating. Thank you for sharing though and providing insight that can help other readers. We appreciate your comment :)
Hi Matt,
Need clarification in Michigan. We have a 3 member LLC but want to put one member in charge of signing documents on behalf of all 3 members (because we are not close in proximity to do so) and so he can make quicker decisions without delay. What title would he have and what document needs to be produced and signed to show his title?
Hi Margaret, depending on how the Operating Agreement is written, any Member can bind the LLC into contracts and agreements (not all Members are required to sign). You can also look into having a Manager-managed LLC. The Manager-managed LLC gives sole authority and decision-making to one person. Where in the Member-managed LLC, all Members get to agree/come to terms on decisions, however, only one person needs to sign on behalf of the LLC for the vast majority of contracts and agreements. Hope that helps.
Hello Matt,
Excellent resource. I am a founder and one of two owners for a new LLC in Florida. Not planning to hire employees anytime soon. When I registered my company I titled myself as CEO and my partner as VP. I went to open a bank account & I and someone told me that CEO & VP title may cause some issue in the future – especially with IRS, most LLC members title themself as a MGR,. Should I change the title as MGR & Member? Does it even matter?
Thank you, Matt
Hi AJ, thank you! Yes, it certainly matters. You did not use the correct titles on the Florida LLC Articles of Organization. Are you willing to share your LLC name? If so, we can look at your LLC record to provide some more context. While you can use titles like CEO and VP with customers and clients, technically speaking, you should use the correct titles when dealing with the Florida Division of Corporation (and any other Florida agency) and the IRS.
First, I’d read Member-managed LLC vs. Manager-managed LLC.
If your Florida LLC will be Member-managed, then both of your titles (on the FL Articles of Organization) should be Authorized Member (AMBR).
If your Florida LLC will be Manager-managed, you need to determine who is a Manager and who is a non-managing Member (although having a non-managing Member isn’t required, it’s just a potential; since you can both be Managers).
Whoever is a Manager (which can be one of you or both of you) would list your/their name on the Articles of Organization and the title will be Manager (MGR).
If one of you is a Manager and one is a non-managing Member, then only the Manager would be listed on the Articles of Organization (the non-managing Member wouldn’t be listed on the Articles of Organization because they aren’t “authorized to manage and control the Limited Liability Company“).
Once you figure out your roles, you’ll likely want to file an amendment to fix your Articles of Organization.
You’ll also want to make sure you have an Operating Agreement in place. The Operating Agreement will be different depending on whether your LLC is Member-managed or Manager-managed. The article I linked to should help clarify all of that.
On the other hand, the IRS uses different titles (since the IRS “ignores” the LLC and looks at the owners to determine how the LLC is taxed). The default tax election for a Multi-Member LLC is Partnership taxation (filing a 1065 return and issuing K-1s to LLC Members). When you call the IRS, you’ll want to refer to yourself as an “owner” or more correctly, a “partner”. The IRS doesn’t really care about Members, Managers, management details, etc. They just want to know who owns the LLC (the Members). So when a Member (owner) of a Multi-Member LLC is dealing with the IRS (particularly on the phone), refer to yourself as a “parter”. Hope that helps!
Great information! I just found your excellent site and saw this article – forgive me if these basic questions are already answered on your site? I am a Founder and one of two owners for a new LLC in Nevada. For business card and sales purposes can we titles like Co-Founder, Managing Partner & CEO? My attorney said to avoid anything with “partner”? I like structures with Managing Partners, Limited Partners, Associate Partners, etc. rather than classic hierarchical, pyramid C structures with CEO -> VP -> Manager, etc. but that may not be allowed with an LLC?
Also, can LLCs have Board of Directors, an Advisory Board, etc?
Finally, to attract talented people, can LLCs offer Stock Options, Equity, or what?
Thank you …
Hi Scott, thank you! As per what is allowed, it depends on where it’s used. Meaning, the language you have in your LLC Operating Agreement (which governs ownership and management) should be specific, but business cards can be a bit more flexible. However, if your attorney recommends not using “Partner” there could be good reason for it. Parter could be interpreted to mean a partner in a General Partnership. Maybe that is why he is recommending against it. But to be honest, people call themselves all kinds of things on business cards. But I see where your attorney is coming from. For example, calling yourself Managing Partner could imply a Limited Partnership (LP) or Limited Liability Partnership (LLP) structure. Whether or not a Board of Directors is allowed depends on state statute. In most states, a board of directors only applies to a Corporation. We don’t really cover boards on the site. And when it came up, it was only in like one or two states. Yes, LLCs can offer equity. We recommend working with an attorney to properly structure/amend the Operating Agreement and any additional documentation. Hope that helps.
Hello,
I am the owner and only employee in my company.
what should my title be? I live in Florida if that matters.
CEO, President, manager?
Thank you.
Hi Richard, it depends on the context. First, to clarify. You are just an LLC Member (owner) and not an employee. You’d be an employee of the LLC if you ran payroll, took a W-2 wage, withheld taxes, etc. Which title to use depends on the context and who you’re talking to. If you’re talking to the IRS, use the title Owner. If you’re talking to the state, an accountant, a lawyer, the state revenue department, etc., you’re a Member. For marketing, your website, friends, family, etc., you can use any title you’d like. You’re the Member, Owner, President, CEO, Manager, etc. You can pretty much give yourself any title you like in that situation. Hope that helps.
Thank you. I read all of the info you have and it is great, but I am still not sure how to sign on the annual renewal, since I have a MGR LLC that manages 4 other. I am the MGR of that Manager LLC. OK.
Since the 4 LLCs have a manager ( the LLC/ MGR), how do I sign for them? Who am I? Still MRG, or what?
I am registered agent for all thats easy.
Thank you
Hi Eva, Section 605.0212 of the Florida Statutes allows for anyone with authority to sign for the Florida LLC Annual Report. That can be an individual or an entity. If you’d like to sign on behalf of the “management LLC”, you can enter your name in the “Type Name of Individual Signing Here>” box. Then you can enter “Manager of ABC LLC” in the “Title” box. ABC LLC would be your LLC that manages the other LLCs. Hope that helps.
Super.
You are great.
Now I have to correct the Articles via Amendment
Hi,
I have LLC that manages ( Does not own property) few other LLC ( each one owns property). When file in FL I list the LLC as MGR for the other LLCs, but then Do I say I am a MGR or Owner?
Thank you
Hi Eva, please see my reply below.
Hi Matt,
I formed my LLC in Ga with myself as registered agent and organizer. After submiting I realized I didn’t appoint my husband as owner and me as manager. I should have put his name in the organizer and designated him as owner. How can I fix the problem? and if we go to open a bank account who can handle this?
Thank you in advance.
Hi Jessie, good news, the Georgia LLC Articles of Organization (and Transmittal Form) don’t ask for LLC Members. LLC Members in Georgia are listed in your Operating Agreement. The state only knows that you’re the Registered Agent for the LLC and the LLC Organizer. For the best paper trail (to open an LLC bank account), you as the LLC Organizer can sign a Statement of LLC Organizer, which states that you as the Organizer appoint you and your husband as LLC Members. Then you and your husband will also sign an Operating Agreement. And that’s how it’s done. If you need some reassurance at the bank, always call the branch manager ahead of time. Some junior reps. get a little confused with LLC stuff ;) Hope that helps!
Thank you very much. Your website helps me a lot. Thank you again for your help and patience.
Jessie
You’re very welcome Jessie!
I PERSONALLY SET UP A LLC
I WANT TOTAL CONTROL OF ALL TRANSACTIONS AS BUYING.SELLING
OF REAL ESTATE, STOCKS, BONDS AND INVESTMENTS.
THIS LLC HAS 12 FAMILY MEMBERS.
WHAT SHOULD MY TITLE BE.
Hello,
The company that Im forming is member managed. We would like to designate office titles such as President, Vice- President, etc to comply with applications for permits needed. Our operating agreement (legalzoon) states that we can designate officers. What is the best way to acomplish this task? Host a meeting where we adjourn the titles?
Thank you
Hi Lilian, you can just designate the titles in the Operating Agreement. You could also hold a meeting, sign a Resolution, and then adjust the Operating Agreement. Hope that helps.
Yes that helps!!! Thank you for confirming that :)
You’re welcome Lilian!