Key Takeaways

  • LLC positions generally include members (owners), managers (in a manager-managed LLC), and officers (optional executive roles).
  • Members hold ownership interests and can participate in management unless the LLC is manager-managed.
  • Managers handle day-to-day operations in manager-managed LLCs, while members take a more passive ownership role.
  • Officers (such as CEO, CFO, or Secretary) can be appointed to formalize duties, especially in larger LLCs.
  • A registered agent is required in every state to receive legal and official correspondence.
  • Additional specialized roles (e.g., treasurer, vice president) can be created in the operating agreement to match business needs.

Positions in an LLC

The positions in an LLC depend upon several factors, including the size of a business and the state in which a business is incorporated. The benefits of incorporating as an LLC include:

  • Protecting ownership from personal liability in the case of lawsuits
  • Low set-up costs and ease of incorporating without the need for attorneys
  • The ability and flexibility to make quick decisions without the need for the approval of a board of directors.

The positions in an LLC can resemble a sole-proprietorship or partnership, with one person or only a few people calling the shots, or operate like a large corporation that depends upon a number of roles to manage the business on a day-to-day basis.

Understanding LLC Governance Structures

LLC governance structures can vary based on the size of the company, the number of owners, and the preferences set forth in the operating agreement. The key distinction lies in whether the LLC is member-managed or manager-managed:

  • Member-managed LLCs give all members equal authority in running the business. This is the default in most states unless otherwise specified in the Articles of Organization.
  • Manager-managed LLCs centralize decision-making in one or more appointed managers, which can be members or outside professionals. This structure is often preferred when some owners want to invest but not handle day-to-day operations.

The operating agreement should clearly outline the decision-making authority of each position, voting rights, and procedures for appointing or removing managers and officers.

Brief Background of LLCs

The LLC has evolved into one of the most popular forms of a business structure from humble origins. In 1977, Wyoming passed legislation with the goal of creating a hybrid structure that offered the limited liability protection for ownership (hence the name) of a C corp and the pass-through tax treatment found in limited partnerships. However it was not until 1993 that the Delaware LLC Act built upon the Wyoming legislation to establish the limited liability corporation as we know it today.

LLC Organization Overview

Although every LLC can differ in size, and each state may differ in the information required to establish an LLC and the fees charged to do so, the basic organizational structure is similar. If you are considering forming an LLC, you should become familiar with the positions in an LLC. These are members, managers, officers, and registered agents.

Members

A member is an individual who has an ownership stake in the LLC.  If available at the time of incorporation, the names of every member are listed in an LLC’s articles of incorporation that is filed with the state, although many states do not require this information. A more detailed description of the roles of members is found in the LLC operating agreement that lays out how the LLC will operate, obligations of members and managers, and the distribution of profits.

A managing member is a member appointed to run the company on a daily basis. Unlike a corporation, stock in the LLC is not issued to outside investors and a member need not be an investor in the LLC to have a controlling interest. Ownership of the company is expressed either by ownership percentage or membership units, and all members have the right to vote on important matters and share in any profits the LLC may create.

Roles and Responsibilities of Members

Members are the equity owners of the LLC and typically have the right to:

  • Share in profits and losses according to the operating agreement.
  • Vote on significant company matters such as amendments to the operating agreement, admitting new members, or dissolving the LLC.
  • Access company records and financial information.

In addition to these rights, members also have fiduciary duties—such as the duty of loyalty and care—toward the LLC and other members. In member-managed structures, they are directly involved in daily business decisions, whereas in manager-managed LLCs, their role is more like that of a shareholder in a corporation.

Managers

A manager of an LLC is not a member, but instead an individual who plays a role in the operation of the business on a daily basis. There are generally two instances where managers play an important part in the management of an LLC. One is the case where the members of an LLC prefer to act as passive investors and remain detached from day-to-day operations. The other is when the LLC requires expertise beyond the scope of the members to run the business entirely. This is quite common in large LLCs like Chrysler or Amazon.

As a rule, however, even when managers exist in an LLC, members oversee the business on a daily basis and merely delegate responsibilities to ensure that the business is more competently managed. Often, but not always, states may require that an LLC document whether they are member-managed or manager-managed in the articles of incorporation.

Authority and Limits of Managers

Managers in a manager-managed LLC operate like corporate executives, overseeing business operations, executing contracts, and making strategic decisions within the scope of their authority. The operating agreement should define:

  • Powers granted (e.g., hiring staff, signing contracts, securing financing).
  • Limitations (e.g., requiring member approval for transactions above a certain value).
  • Term and removal process for managers.

While managers owe fiduciary duties similar to members, they are also accountable for compliance with state laws, proper record-keeping, and acting in the best interest of the LLC.

Officers

It is not required that an LLC have officers, but some LLCs, particularly larger ones, find it convenient to appoint individuals to handle certain responsibilities within the company. Their titles are often similar to ones found in C-corp businesses, such as president, vice-president, and treasurer.

Regardless of title or assigned tasks, it is not necessary for officers to be members of the LLC and, depending upon whether the LLC is member-managed or manager-managed, they perform their duties under the supervision of either members or managers. Often financial institutions require that an officer be appointed by an LLC to represent the company in banking matters. However, officers do not have the authority to enter into binding agreements on behalf of the LLC and, in most cases, are only employees of the company.   

Common Officer Titles in an LLC

While LLCs are not required to have corporate-style officers, many choose to appoint them for operational clarity, especially in multi-member or larger LLCs. Common officer titles include:

  • Chief Executive Officer (CEO) – Oversees overall strategy and business direction.
  • President – Manages day-to-day operations, often interchangeable with CEO in smaller LLCs.
  • Chief Financial Officer (CFO) or Treasurer – Manages finances, budgeting, and accounting.
  • Secretary – Maintains corporate records, meeting minutes, and official filings.
  • Vice Presidents – Lead specific departments such as sales, marketing, or operations.

Officer duties, terms, and appointment procedures should be clearly outlined in the operating agreement to avoid overlap or confusion.

Registered Agents

A registered agent is usually only an individual registered in a state in which an LLC wishes to file articles of incorporation with the authority to receive official state communications on behalf of the LLC. Registered agents rarely have any role within an LLC beyond this responsibility.

Additional and Specialized Roles

Beyond the standard positions, LLCs may create specialized roles to suit operational needs. These can include:

  • Compliance Officer – Ensures the LLC meets all legal, tax, and licensing requirements.
  • Operations Manager – Oversees workflows, production, or service delivery.
  • Advisory Board Members – Provide strategic guidance without formal management authority.

Such roles are not required by law but can help define responsibilities and streamline decision-making. All positions, whether formal or informal, should be documented in the operating agreement or company resolutions to ensure clarity and enforceability.

Frequently Asked Questions

  1. Do all LLCs need to have managers and officers?
    No. In a member-managed LLC, members run the business directly. Officers are optional and usually appointed for operational clarity.
  2. Can a member also be a manager in an LLC?
    Yes. In manager-managed LLCs, members can serve as managers if allowed by the operating agreement.
  3. Who appoints officers in an LLC?
    Officers are typically appointed by members or managers, depending on the LLC’s operating agreement.
  4. What is the difference between a registered agent and a manager?
    A registered agent receives legal notices on behalf of the LLC, while a manager oversees daily business operations.
  5. Can an LLC create custom titles for positions?
    Yes. LLCs have flexibility to create and name positions that fit their business needs, as long as these are documented in the operating agreement.

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