What Is an LLC Manager? (Obligations & Benefits Explained)

Jon Morgan
Published by Jon Morgan | Co-Founder & Chief Editor
Last updated: September 16, 2023
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Managers are in charge of what's happening with marketing, operations, logistics, or finances, to name a few. Their duties depend on what their title entails and what kind of company they work for.

As part of a team of professionals and marketing experts with over 10 years of experience, I will provide you with a detailed explanation of an LLC manager's responsibilities and tips on choosing the right type of management structure.

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.
  • An LLC member may be appointed or elected as the company's manager. An independent individual or entity who has no membership interest with the LLC may be employed to manage the company.
  • The ideal management structure for an LLC will depend on the company's line of industry, nature of operations and business goals.

What is an LLC Manager?

An LLC manager performing his duties

An LLC manager is an individual responsible for managing day-to-day operations, making business decisions, and overseeing finances and transactions. A member may be appointed to manage the company or the owners can employ the expertise of a professional.

An LLC manager's duties and authority will vary depending on the management structure specified in the Articles of Organization.

A limited liability company manager is an individual who manages and runs an LLC.

An LLC manager has certain tasks such as:

  • Reviewing financial records
  • Ensuring compliance with state and federal regulations concerning taxes and liabilities
  • Organizing meetings
  • Preparing meeting minutes
  • Resolving internal disputes among LLC members
  • Business operation - hiring and firing of employees and entering contracts

An LLC operating agreement is a document where LLC owners can outline the exact manager's duties [1].

The manager should always act in the LLC's best interest – he/she cannot receive any personal benefits as this would fall under self-dealing, which violates his or her fiduciary duty (duty of loyalty).

It is very important to note that even if the manager does work outside his standard list of responsibilities, such action constitutes a violation of the manager's duty and may be held personally liable down the road.

Who Can Be an LLC Manager?

An LLC manager may either be an appointed or elected member, an individual or entity with no membership interest, or an employed agent. It all depends on the terms stated within the operating agreement.

Businesses operating within an LLC structure are required to have management to run the organization. Many different management structures can be used when it comes to an LLC, depending on what LLC members or investors want to be included within their business model.

Each member of an LLC operating company needs to understand who has the sole authority and responsibility for a company's daily operations and decision-making.

This will also allow them to make educated decisions about how they invest in the business and determine how involved they wish to become with daily activities.

An LLC manager can be the following:

1. Appointed or Elected Member

The managing member (member-manager) is an individual who is the manager but can also be a member of the LLC, depending on state laws and operating agreement terms.

As owner-managers, they are responsible for business decisions, including financial investment or withdrawal from the company; however, it is important to remember that the manager's actions must not jeopardize the existence of the company.

2. Employed Agent

An agent manager is a nonmember employee or officer of an LLC employed by the owners for their expertise and experience.

3. De Facto Manager

The de facto (de jure) manager is a management position that exists on paper, only creating duties without any actual rights to manage company affairs, including voting, making major decisions, and taking actions as if they have power over the LLC's management structure [1].

The sole purpose of this title being used on paper is to protect from potential claims against individuals involved in managing activities of daily operations.

A Member-Managed or Manager-Managed LLC - Which Is Better?

A manager looking at someone

A manager-managed LLC is better than a member-managed because the company benefits from the expertise of a professional. The operational structure of the LLC will depend on whether the owners prefer complete authority over the business or if they want to hire a manager.

1. Member-Managed LLC

In a member-managed LLC, the owners can appoint one or more LLC members to manage the business.

This can be by unanimous agreement or majority vote, depending on what is indicated in the LLC's operating agreement.

If there are other LLC members involved in running the member-managed business, they must share responsibility for its debts and liability as well.

2. Manager-Managed LLC

A manager-managed LLC is one where another person will be appointed as a manager who has legal authority over your business. Members of a manager-managed LLC will not have full authority and control of the business.

In most states within America, this type of limited liability company must appoint at least two managers to operate legally, although this isn't the case everywhere across the country, so check with your state laws before making any decisions on which structure you would like to use for your LLC formation.

Do LLC Managers Have Fiduciary Duties?

Yes, LLC managers have fiduciary duties with the LLC.

A fiduciary duty is a legal obligation imposed on an individual who agrees to act for and on behalf of another person in all matters connected with such agency—whether dealing directly with the property involved or otherwise.

It requires undivided loyalty and full disclosure between those people acting together in some common interest (such as managing assets).

If he fails at this, it could be considered a breach of fiduciary duty, and he may be subject to personal liability.

A breach of fiduciary duties occurs when a person in a position of high trust exploits that relationship for personal benefit at the expense of his principal (or employer).

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Can a Manager Be an LLC Owner?

A manager can be an LLC owner. This is usually the case with small businesses and single-member LLCs.

How Do Managers Get Paid?

Managers are compensated as regular employees.

When a company designates a member to be a manager, that person is entitled to receive reasonable compensation in addition to income and capital contribution. A salary will be paid to a manager who is only an employee of the limited liability company, without any profit distributions.

Is an LLC Manager an Employee?

Third-party LLC managers are considered employees, although small businesses usually opt for a member-managed LLC because of the limited resources.

Is a Manager of an LLC an Officer?

A manager of an LLC does not necessarily have to be an officer. LLC members and managers can appoint officers who are actively involved in business operations, but they don't need to have any other role in the company.

What Is the Difference between a Manager and an Authorized Member of an LLC?

A manager is a person or an entity that has the power to act according to the company's operating agreement and performs this active role. An authorized member is one of the LLC members who have some power by authorization to execute certain business operations.

Can the Manager of an LLC Be the Registered Agent?

A manager of an LLC can be a registered agent - anyone who is a resident of the state and is of legal age, including managers, passive investors, and so on.

Can an Entity Be a Manager of an LLC?

An entity can be a manager of an LLC if the state law allows other business entities to act as LLC managers.

Does an LLC Manager Have Personal Liability for the Company’s Debts?

In a manager-managed LLC, the manager generally doesn't have personal liability for the company's debts incurred during the day-to-day operations. However, it's essential to adhere to legal requirements and avoid actions that may expose the manager to personal liability.

So, What is an LLC Manager?

An LLC manager is responsible for business operations, decision-making, and handling financial, as well as legal aspects of the business. An owner or a hired employer may manage an LLC. It all depends on the terms of the LLC's operating agreement.

LLC owners should think carefully before deciding who to appoint to perform managerial duties because the future of their LLC will largely depend on how the manager performs their job.


  1. https://wabusinesslawblog.com/what-is-a-de-facto-llc-manager/

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