Management

Some­one has to make the deci­sions on behalf of Mr. LLC. There are mainly two ways to struc­ture the LLC’s man­age­ment: mem­ber man­age­ment or man­ager man­age­ment. Here’s what these two man­age­ment sys­tems mean.

If all of the mem­bers have the author­ity to make Mr. LLC’s day-to-day deci­sions and are autho­rized to act on his behalf, then Mr. LLC is mem­ber man­aged. In this struc­ture all of the mem­bers gen­er­ally have equal man­age­ment rights.

If one or more mem­bers don’t want man­age­ment respon­si­bil­ity or if the mem­bers want to limit the power of some of its mem­bers, then the mem­bers appoint one or more of the mem­bers or a non-member man­ager to make Mr. LLC’s day-to-day deci­sions. This is called manager-management.

If there is only one mem­ber, then that mem­ber can choose mem­ber man­age­ment. But it’s gen­er­ally a good idea for that owner to chose her­self to be the man­ager and to des­ig­nate the LLC as manager-managed.

There’s a lot of flex­i­bil­ity with the man­age­ment of Mr. LLC. You can also struc­ture it to be like a cor­po­ra­tion with a board of direc­tors and offi­cers. You can also develop man­age­ment com­mit­tees. You can give your man­ager what­ever title you want to give him or her. You may also pay the man­ager a salary and other ben­e­fits sep­a­rate from the profit the mem­ber man­ager earns from Mr. LLC.