Q:

What is a managing member of an LLC?

A:

Quick Answer

All of the owners of a limited liability company are called members, and a managing member of an LLC has the authority to make decisions on behalf of the company. All members have this authority by default in most states, unless the members choose to relinquish their authority to a professional manager. The manager may also be a member, but could be a company instead.

Continue Reading
What is a managing member of an LLC?
Credit: Robert Daly OJO Images Getty Images

Full Answer

Unless otherwise stated in the LLC operating agreement, it is assumed that all of the members will be involved in company decision-making. Daily decisions may be made by any of the members, but more important decisions require a majority vote. According to About.com, "contracts and loan agreements must be approved by a majority of the members."

There are several circumstances in which an LLC might want to appoint a manager instead. For instance, if some of the members prefer to be passive members, investors and owners, but are not interested in the daily management of the company. In this case, one or more of the remaining members, or a professional management firm, might be designated as the manager for the company. This may also be true of an LLC with too many members to make management by consensus practical.

Learn more about Corporations

Related Questions

Explore