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An LLC Manager is a person (or company) who runs the LLC. And they also have the ability to bind the LLC in contracts and agreements.
However, it’s important to know that an LLC can be managed in 2 ways:
By default, LLCs are Member-managed. This means that the LLC’s day-to-day operations are run by the LLC Members (owners). And each LLC Member can bind the LLC in contracts and agreements.
That said, if the LLC Members want the day-to-day operations to instead be run by a Manager (or Managers), they can vote for the LLC to be Manager-managed.
When an LLC is Manager-managed, the LLC Manager(s) can bind the LLC in contracts and agreements. And the LLC Members take on a passive/”backseat” role.
Who can be an LLC Manager?
There are 3 types of LLC Managers:
- Internal Manager
- External Manager
- Company Manager
An Internal Manager is when an LLC Member (owner) is also an LLC Manager.
An External Manager is when the LLC Manager isn’t an owner.
A Company Manager is when the LLC is managed by another company (like another LLC or Corporation).
What does an LLC Manager do?
The LLC Manager is in charge of:
- Running the day-to-day business
- Making decisions for the company
- Signing contracts and agreements
- Managing employees
- Handling finances
- etc.
How do you choose an LLC Manager?
The LLC Members choose the Manager(s).
And this choice is then documented in the LLC Operating Agreement.
And in some states, you also list the LLC Manager in your Articles of Organization (the document that forms your LLC).
Can a Manager be removed?
Yes, this can easily be done. The LLC Members can vote to remove an LLC Manager if needed.
The rules for how to remove a Manager will likely be in your LLC Operating Agreement.
And when you make this change, you should document it in your LLC Operating Agreement.
How to change an LLC from Member-Managed to Manager-Managed?
To change an LLC from Member-Managed to Manager-Managed (or vice versa), the process is pretty straightforward.
The LLC Members first vote to change the management structure.
And then they memorialize this change in the LLC Operating Agreement.
Some states require that LLC Managers (or Members) be listed in the Articles of Organization or Annual Report.
If this is the case in your state, then you’ll need to update their names on your next LLC Annual Report (or by filing an Amendment).
Should my LLC be Manager-managed or Member-managed?
Pro Tip: Your LLC management structure is not set in stone. You can always change this later.
Here’s our recommendation:
If you’d like a little bit more privacy, then choose Manager-managed. And make all of the LLC Members the Managers.
Why? Using the title “Manager” creates a bit more privacy because it doesn’t automatically mean the person is an owner (although they can be). However, the term “Member” automatically means the person is an owner. So in short, using the word Manager is a bit more private.
If you don’t care about the extra privacy, then choose Member-managed because it’s simpler.
To learn more, please see Member-managed vs Manager-Managed LLC.
In summary
An LLC Manager is a person (or company) who runs the LLC. And they have the power to bind the LLC in contracts and agreements.
The LLC Members choose who the LLC Manager(s) is, and they can also remove them if needed.
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.
