What Is the Owner of an LLC Called? (Official Titles Guide)

The owner of an LLC is called a member. An LLC may have one member or multiple members; the word “manager” describes a management role, not necessarily ownership [1].

An LLC may also use business titles such as CEO or president, but a title alone does not decide who owns the company or who can legally bind it. Check the operating agreement, formation documents, and state law.

Quick Summary

The Legal Name for an LLC Owner

The legal title for an LLC owner is “member.” A one-owner company has a sole member; a company with several owners has multiple members. The member may be an individual or, where state law allows, another legal entity.

The IRS also calls LLC owners members when explaining federal tax classification. That tax description does not determine who manages the business [2].

Learn more about what an LLC member is, who may become one, or how an LLC works.

"When selecting a title for yourself, remember two key guidelines: Firstly, your title should signal to external parties that you possess the authority to execute contracts on behalf of the LLC. Secondly, the titles you choose for business ownership should always be clear and not deceptive."

- LJ Viveros, Distinguished Growth & M&A Transition Advisor, Former General Manager

Members Own the LLC; Managers Manage It

Ownership and management are different. A member owns an interest; a manager runs the company to the extent the agreement and state law authorize. A manager can be an owner, but does not have to be [3].

In a member-managed LLC, members generally share management authority under the governing documents. In a manager-managed LLC, designated managers handle management and members retain the ownership rights set out in the agreement.

See what an LLC manager does and the differences between member-managed and manager-managed LLCs.

Common LLC Titles and What They Mean

Member identifies ownership. Manager identifies management authority. Managing member combines the two only when the member is authorized to manage.

CEO, president, owner, or principal may be used as business titles, depending on state law and company documents. These words do not by themselves prove a membership interest or authority to sign a particular contract.

For example, a company can appoint a nonmember manager while the owners remain members. A sole member can also manage the LLC without using an executive title.

Choose a Title That Matches the Actual Role

Choose a title that matches the work the person actually performs and the authority granted in the operating agreement or a written resolution. Tell banks, customers, and counterparties who may sign and what limits apply.

Avoid using “manager” as though it always means owner, or “CEO” as though it guarantees contract authority. For a state-specific example, Texas asks an LLC to identify whether it is member-managed or manager-managed in its certificate of formation [4]. Other states may use different filings.

If ownership percentages change, document the transfer or issuance and update the member ledger. See changing an LLC ownership percentage.

Member-Managed vs. Manager-Managed LLCs

In a member-managed LLC, members participate in management under the governing rules. In a manager-managed LLC, the operating agreement or formation documents identify a manager or management group.

The agreement should answer who may sign contracts, borrow money, hire employees, approve distributions, and make major decisions. State default rules apply where the agreement is silent.

Do not assume that a member loses ownership rights merely because the company appoints a manager, or that a manager receives an ownership share just by being appointed.

For companies with more than one owner, define each person's vote, economic interest, and management role separately. See our guide to multi-member LLCs.

When Does a Separate Manager Help?

A separate manager may help when owners want to delegate daily operations, bring in a qualified non-owner, or divide management from investment. It also adds a person whose authority and limits must be clearly documented.

Check the agreement and state filing before describing someone as a manager. For a comparison of entity forms and authority, see different LLC types.

Do not select a title only for appearance. Confirm the person's role, approval process, access to company funds, and power to sign on the LLC's behalf.

FAQs

LLC Ownership and Management Titles

The title “member” identifies ownership. An LLC's operating agreement and state filings identify whether members manage directly or appoint managers; any CEO or president role should be tied to actual delegated authority.

For another perspective on titles, see whether an LLC needs a president or CEO and how to find an LLC owner. If you need document-preparation help, compare online legal services and have counsel review state-specific terms.

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References:

1. https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
2. https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
3. https://www.sos.state.tx.us/corp/formationfaqs.shtml
4. https://www.sos.state.tx.us/corp/formationfaqs.shtml
5. https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc