What Is an LLC Manager? (Obligations & Benefits Explained)
An LLC manager is a person given authority to manage some or all of the company’s business. The manager may be a member-owner or someone who does not own an interest.
The operating agreement and state law define the manager’s powers and limits.
Quick Summary
- An LLC manager is an individual or entity responsible for running the business.
- A manager's fundamental duties include making business decisions, overseeing day-to-day operations, and handling financial as well as legal concerns.
- Statistically, the Small Business Administration Office of Advocacy notes that out of 33.3 million small businesses, 27.1 million are directly managed by their owners.
- Throughout the years I've worked in the LLC sector, I've learned that the ideal management structure for an LLC will depend on the company's line of industry, nature of operations, and business goals.
What Does an LLC Manager Do?
A manager carries out the authority granted by the LLC’s operating agreement, member resolutions, and applicable law. That can include signing ordinary contracts, supervising operations, or handling a defined area of the business.
In a manager-managed LLC, the members generally delegate day-to-day authority to one or more managers. The agreement may reserve major decisions—such as admitting a member, selling core assets, or dissolving the company—to the members.
Who Can Be an LLC Manager?
An LLC’s manager can be a member or a nonmember, if the governing documents and state law allow it. A single person can manage an LLC; there is no general rule that every LLC must have two managers.
Record the appointment, authority, term, compensation arrangement, and removal process in the company’s records.
Related reading:
Manager Authority and Duties
Do not assume a manager can make every decision. Check the agreement for signing authority, spending limits, member-vote requirements, and conflicts-of-interest procedures.
Duties and liability standards vary by state and agreement. Florida, for example, sets statutory standards for members and managers in a manager-managed LLC [1]. Treat that as a Florida rule, not a nationwide summary.
Related reading:
- type of limited liability company
- LLC formation
- What Is a Governor of an LLC
- Does an LLC Have to Have a President or CEO
- LLC Manager vs. Registered Agent
FAQs
Does an LLC manager have to be an owner?
No. An LLC can appoint a member or a nonmember as manager, subject to its agreement and state law.
Does an LLC manager have full control?
Not necessarily. The operating agreement and state law define authority and any member-approval rights.
Is an LLC manager automatically an employee?
No. Employment and tax status depend on the facts and tax classification, not just the title.
What does authorized member mean in an LLC?
An authorized member is an LLC owner with authority to act for the company; the operating agreement and state law define that authority. Read our guide to authorized members.
References:
- https://www.leg.state.fl.us/STATUTES/index.cfm?App_mode=Display_Statute&URL=0600-0699%2F0605%2FSections%2F0605.04091.html
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