LLC Management
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 non-member managers to govern the LLC.
It is far more common to have the Operating Agreement dictate the terms of how the LLC will be managed than the Articles of Organization. All states allow the LLC Operating Agreement to prescribe whether the LLC is to be managed by its members or elected managers as well as the methods to be followed for managing and operating the LLC. If the Articles of Organization and the Operating Agreement are silent, each state statute’s will have provisions that direct who will manage the LLC as well as the procedures for operating the LLC.
The members or managers elected as managers should be qualified to manage a 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; however, the members may elect certain third-part non-members to serve as managers of the LLC.
