Key Takeaways

  • An LLC member is an owner of the company, while a registered agent is a designated contact to receive legal and government documents.
  • The same person can serve as both a registered agent and a member, but they are distinct roles with different responsibilities.
  • Members make ownership decisions and may manage operations; registered agents handle service of process, compliance notices, and official correspondence.
  • State laws require every LLC to have a registered agent with a physical address in the formation state.
  • Choosing a professional registered agent service can enhance privacy, ensure availability during business hours, and maintain compliance.

What's an LLC Agent vs Member?

Different from a non-managing member, the managing member of an LLC acts as the company's agent. They have the power to sell or buy company property during the course of the business. They can also fire or hire employees, bind the company through contracts, and perform company operations directly. Employees, officers, managers, and members of LLCs can act as the registered agent for the company as long as they live or work in the same state where the LLC is formed.

The obligations and rights of LLC managing members need to be recorded in the operating agreement of the LLC. Managing members of LLCs have a variety of duties and rights that non-managing members do not have. These include: 

  • making decisions related to the daily operations of the company (such as firing, hiring, and promoting employees)
  • being able to legally enter into contracts (helpful when they're contracting the purchase or selling of land on the LLC's behalf)

Key Differences Between an LLC Member and a Registered Agent

While both roles are essential to an LLC’s structure, an LLC member is an owner with a financial stake in the business, whereas a registered agent is an official contact for the company’s legal and compliance matters.

  • LLC Member Responsibilities: Contribute capital, share in profits/losses, participate in decision-making (if managing), and approve major company actions.
  • Registered Agent Responsibilities: Receive service of process (lawsuits, subpoenas), state correspondence (annual report reminders, tax notices), and other official documents.

In some LLCs, a managing member may also be listed as the registered agent, but this is not required. The distinction lies in authority—members own and may manage the business, while registered agents ensure the company meets its legal obligations to the state.

Member-Managed LLC

An LLC that has only a few owners, such as how many businesses are, will find that a member-managed LLC is the best structure. Two choices need to be made with a member-managed LLC, which is whether the owners will hire a third party to manage their company or the LLC will be run by the managing members. 

All members will have an active role when it comes to managing the daily activity of the company. They are also authorized to be the company's agents. This means they're authorized to bind the company through a contract.

The default management structure for LLCs in many states is member management. For companies forming an LLC that want a member-managed LLC, they must put this in the operating agreement or formation documents.

Members won't play an active role in member-managed LLCs. They also won't be legal agents who can contractually bind a company. Management will be assigned to a group of members or a third party non-member. Third-party managers can be a separate entity unless there are restrictions the state places on who can be in charge of the LLC.

Can a Member Also Be a Registered Agent?

Yes. A member—managing or non-managing—can also serve as the registered agent if they meet state requirements. Typically, this means:

  1. Physical Address in the State: The registered agent must maintain a street address (no P.O. boxes) in the LLC’s formation state.
  2. Availability During Business Hours: They must be present during normal working hours to receive legal notices.
  3. Age and Residency: Most states require the registered agent to be an adult resident of the state or a company authorized to operate there.

While serving as your own registered agent can save fees, using a professional service helps maintain privacy and ensures compliance, especially if you travel frequently or lack a permanent business location.

What are Non-Managing Members?

Members who aren't managing don't have additional authority besides what's stated in the operating agreement. They also aren't agents of the company.

Managing Member Liability

Non-managing members in the LLC are protected by the limited liability shield. However, members are not protected from their own torts inside or outside the business. Managing members are personally involved in company operations, which means they're at a higher liability than a non-managing member. 

Managing members may be sued by the LLC if their behavior brings injury to the company. This prejudices the interests of members who are non-managing.

Self-Employment Tax

There is an extra tax of 15.3 percent for self-employment tax. This is the portion of Medicare and Social Security taxes that the person's employer would have been in charge of. The Internal Revenue Services make rules about who needs to pay self-employment tax, but it can be complicated. Any LLC earnings from managing members will be classified as income and subject to self-employment tax.

Any distributions that non-managing members are paid is passive income. This excludes dividends from investment income or stock in corporations. It's smart to hire a business attorney or involve a CPA while coming up with the LLC operating agreement. They can help the organizers find the best way to minimize taxes that the members pay. Members who aren't managers won't be subject to self-employment tax.

Fringe Benefits

An LLC's managing member's income is classified as earned income versus passive income. This gives them the chance to get fringe benefits tax consideration for payments that are made on their behalf by the company. Benefits for health insurance don't have income tax for the managing member. However, benefits for non-managing members do not have this protection.

What is a Registered Agent?

A registered agent can be known as a resident agent. Each LLC in the United States needs to pick a registered agent to take any legal documents that the company gets served.

Why Every LLC Needs a Registered Agent

All states require LLCs to appoint and maintain a registered agent. Without one, your LLC could:

  • Fall out of good standing and face penalties or dissolution.
  • Miss critical legal deadlines if official notices go unanswered.
  • Lose the ability to defend itself in court due to improper service of process.

Professional registered agent services can forward documents promptly, keep your personal address off public records, and help ensure you never miss important compliance filings.

Frequently Asked Questions

  1. Is a registered agent automatically a member of an LLC?
    No. Being a registered agent does not grant ownership rights. Membership must be granted separately in the LLC’s operating agreement or formation documents.
  2. Can a non-member be a registered agent?
    Yes. Many LLCs appoint third-party individuals or professional services as registered agents.
  3. Why would a member choose not to be the registered agent?
    To protect personal privacy, ensure someone is always available during business hours, and avoid public listing of their personal address.
  4. Can one person be both managing member and registered agent?
    Yes, if they meet state requirements for registered agents, but they must handle both sets of responsibilities.
  5. What happens if my LLC doesn’t have a registered agent?
    The LLC risks losing good standing, facing fines, and being unable to receive legal notices—potentially resulting in default judgments.

If you need help with figuring out is a registered agent a member of an llc, you can post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.