What Is the Head of an LLC Called?: Everything to Know
What is the head of an LLC called? LLC owners (called members) are not confined to the same rigid management structure as a corporation.3 min read
What is the head of an LLC called? LLC owners (called members) are not confined to the same rigid management structure as a corporation. Members can create member titles at their discretion. However, members must remember stakeholders, like their customers and vendors, when selecting a title, especially for those who can close deals on the LLC's behalf.
What Is a Limited Liability Company (LLC)
A limited liability company (LLC) is a hybrid business structure that is appealing to small business owners. The LLC business structure offers liability protection to its members while allowing members to have flexibility in how they run their business.
LLCs give small business owners a legal way to determine how they run their businesses. An LLC affords its members flexibility in the following areas:
- Business operational structure
- Member roles
- Member titles
Use your operating agreements to specify your operational procedures, functions, and title. Though there are no legal mandates that require an LLC do to so, having a clear description of how your business runs, as well as policies and guidelines, will save you from unnecessary issues in the future. Additionally, if you do not have an operating agreement, then your state business office will follow their guidelines, and it may not have a positive result for you our fellow members.
LLC Management Structure
An LLC's management structure options are member-managed or manager managed. In a member-managed LLC, all members participate in directing the daily business operations. On the other hand, if at least one member is not involved in managing the business (called a passive member), the LLC is manager-managed. A manager-managed LLC can also include a non-member.
Official Names for LLC Owners and Managers
When you set up your business operating agreement, add the management titles for anyone who is on the management team. Decision-making executives need to use their legal title when signing any legal documents for the LLC. Titles such as member, manager, or member-manager do not usually signify executive-level positions to outsiders. When you choose a title, keep the following two guidelines in mind:
- Your title should communicate to outsiders that you are an authority figure in the business.
- The title you use is clear and relates to your role in the company.
Good Choices for Titles
The title you select does not have to be unique. For example, here are some commonly used titles:
- Owner. If you are the sole member, owner is clear and concise.
- Managing member. If you want to use “member” in the title, managing member is more authoritative.
- CEO or President. These are commonly used executive titles.
- Principal. This title is typically used in consulting and service-oriented firms.
Creative firms, like graphic design companies and advertising companies, prefer to use titles like creative director or technical director. You can also use industry-specific titles. You can check online for job postings to review common executive titles for your business line.
Titles to Avoid or Use With Caution
There are some titles you should avoid. For instance, using either managing partner or proprietor is confusing and may mislead people. Partnerships and sole proprietorships are two business types and are different from an LLC. Additionally, these business types do not offer liability protection. Using either of these titles can increase your risk for a liability suit.
Furthermore, resist the urge to invent titles that are misleading. Titles like "lead coordinator" or "administrator" do not help outsiders understand your role. It also devalues your position. Furthermore, do not combine unusual titles with traditional ones, like "lead coordinator/president."
Lastly, resist the urge to use humor in your business name. Titles like Head Honcho, Rockstar, Boss Lady, and Fearless Leader may be funny among your peers, but it will not serve you well when brokering business deals.
You want to garner respect and trustworthiness from people inside and outside your organization. Your role as an executive is an extension of your LLC's brand. Furthermore, align your name so that it is in context with your interactions with customers. For instance, if you own a retail shop and you interact with customers, owner may be a better title than CEO. Your title does not need to be fancy — just well thought out.
If you need help forming an LLC, you can post your legal need 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.