LLC Member Titles: Everything You Need to Know
LLC member titles may differ from state to state, but most use similar terms. 3 min read
LLC member titles may differ from state to state, but most use similar terms. The titles are used to establish the roles of individuals and their responsibilities to the limited liability company. Titles may be for corporate offices, such as "vice president," while others may be required by law for your state.
Overview of LLC Officer Titles
Anyone who has an ownership interest in a limited liability company is a member/owner. All members involved with an LLC have an active part in the way the company is managed as well as the authority to enter into binding contracts.
An exception would be if the LLC is manager-managed or the operating agreement stipulates some other arrangement. Within your operating agreement, each member's responsibilities and powers should be clearly outlined.
In an LLC business structure, officers or employees may or may not be a member. To be a member, an employee or an officer must have an ownership interest in the limited liability company.
LLC Manager or Managing Members
Two of the titles used within an LLC structure are "member-managed LLC" (members) and "manager-managed LLC" (managers/managing members). These titles specify the person/people who have the duties of managing the company and contractually binding the company.
When forming a limited liability company, there are two designations regarding the management of the company. When the LLC is a manager-managed company, the management is delegated to a third-party person. In a managing-members company, management is handled by either a member or group of members.
In most cases, limited liability companies are set up as member-managed. However, choosing to be manager-managed is an option if it suits the needs of your business better.
Members of an LLC who are not designated as managing members are not involved in the day-to-day operation/management of the business. These members also do not have any authority to make binding contracts with other companies.
Two additional titles are "internal manager" and "external manager." An internal manager is a person who manages and owns the LLC. An external manager manages the LLC but has no ownership.
Choosing a Title
There are two rules to follow when choosing a title for yourself. The first is selecting a title that immediately lets someone know you are the person in charge who has the authority to agree to and sign contracts on behalf of the LLC. The second rule is never to choose a title that is misleading.
Consider these title choices to accurately represent your position within the LLC:
- Owner: Used when there is only one member or a limited number of members.
- Managing member: Adding the word "manager" clarifies your position.
- Managing director: You may also use "creative director" or "technical director," but these are not as professional as "LLC President" or "LLC CEO."
- CEO or president: These are also acceptable as your designated title.
There are some rules in place regarding the use of "member" or "managing member." For example, if you own all or a portion of an LLC and it is member-managed, you would use the title of either "member" or "managing member."
If you own some portion of the LLC and it is manager-managed by members other than yourself, you must use "member" as your title. Using either "manager" or "managing member" is not an option.
If the LLC is manager-managed by a third party or an external person or persons, you must use "member" as your title. "Managing-member" and "manager" cannot be used.
If you are the owner of all or a portion of the LLC and it is manager-managed by you, then "managing member" or "manager" is an applicable title.
Titles to Avoid
- Managing partner: Using the words "managing partner" or any deviation with the word "partner" can cause confusion, as a partnership is a different business structure than an LLC.
- Proprietor: "Proprietor" can also be confusing in terms of the owner of a sole proprietorship. Like partnerships, sole proprietorships do not offer any liability protections.
- Made up names: While you may think it is creative, most business people will better understand a traditional title that clarifies your position versus guessing at what a title means. It is best to either avoid made up names or combine them with a traditional title, such as "Lead Coordinator/CEO." Refrain from cutesy, humorous titles like "Fearless Leader," as you may not be taken seriously when negotiating contracts.
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