LLC Management Structure Titles: Everything You Need to Know
When figuring out LLC management structure titles, owners are allowed to call themselves almost anything they want, allowing them to add the title to their business card.3 min read
When figuring out LLC management structure titles, owners are allowed to call themselves almost anything they want, allowing them to add the title to their business card. The only restriction is you cannot advertise claim to a certification or license you've never obtained.
Choosing Titles for LLCs
When choosing a name, figure out what impression it makes and how you want others to perceive you prior to meeting face to face. The flexibility in naming allows you to convey your company's message. In other words, you can portray yourself as traditional and very professional or small with a hint of fun.
The idea behind LLCs is to offer business owners flexibility, and that extends to the title you give yourself as well. There is no requirement to call yourself CEO or president. This is desirable, especially for a smaller business who doesn't want to come off like a big corporation.
If you've recently set up an LLC or you're getting ready to start one, this is the time to decide on titles to give various individuals. Some titles might follow the corporate structure, as they designate the roles for various officers, like a vice president or treasurer. While these are not required per state law, they can be beneficial in helping define positions and duties.
Official Names in LLCs
Other titles within the LLC are regulated by state law, as they are important when an LLC is doing business with other people or negotiating a contract. Most states follow the same general guidelines on terms here:
- LLC owners are called members.
- Someone who owns the LLC, runs the day-to-day business operations, and can enter into a contract on behalf of the business is called an LLC managing member.
- An LLC manager is one who can enter into contracts on behalf of the business and also runs day-to-day operations.
- There are two types of managers in an LLC:
- Internal (runs the business and owns it)
- External (runs the LLC but is not an owner)
How a business operates is largely dependent on what type of business entity it is. By law, corporations are required to maintain a board of directors and officers, whereas LLCs don't have these same strict regulations.
LLCs have the option to operate like a corporation, but they aren't bound by it. LLCs have members no matter whether they're a small or a large business. The terms owner versus executive are important and help distinguish an LLC from a corporation.
With a member-managed LLC, the managing member is often the one who is running the operations. Manager-managed LLCs typically have a non-member who is responsible for managing the business. Some states also recognize managing member as a third title. The issue with these designations is they don't really mean anything outside of the business itself.
Possible LLC Titles
When you start choosing a title for yourself, remember that it should represent that you own the LLC and have the authority to enter into a contract on behalf of the business. Also, names should never be misleading.
Generally accepted options include:
- Managing member
- Managing Director
- Technical Director
There are some other titles to keep in mind that are utilized in corporations and sound very businesslike. Some of these may work with LLCs, while others should be avoided.
- Shareholders — LLCs have members rather than shareholders, and they are quite different. Shareholders have voting rights and own stock.
- Directors — Directors are tied to corporations as this type of business entity is required to elect a board of directors versus managing members or managers in an LLC.
- Corporate Officers — LLCs can decide to appoint officers like a president, vice president, etc., to handle certain tasks or jobs.
Some titles you might be tempted to use could land you in some hot water.
- Managing Partner — Managing Partner or any other derivation. Utilizing partner in a name suggests a partnership and could be confusing.
- Proprietor — A sole proprietorship doesn't offer liability protection and can lead someone to believe it's a small, single-owner business.
- Made-up Titles — Don't try to be too creative and come up with odd titles that are only made up and provide no meaning.
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