Types of Companies > Limited Liability Company > Management of the LLC

How to Manage an LLC

A limited liability company may be managed either by (a) the members or (b) one or more managers. A "member" is an owner of the limited liability company. If a limited liability company is managed by the members, then the owners are directly responsible for running the company.
A "manager" is a person elected by the members to manage the limited liability company. In this context, a manager is similar to a director of a corporation, or a member of Congress. A manager can be, but is not required to be, a member. If a limited liability company is managed by managers, then its members are not be directly responsible for running the company.

Whether an LLC should be managed by members or managers depends on several factors, including:

• The number of owners
• The type of business
• Where the owners are located
• How involved the members will be in the operations of the LLC.
• Management by members is usually the best option for LLCs that have only one member or just a few members, all actively participating in the affairs of the LLC. If there are many members, on the other hand, including some that do not actively participate in the operations of the LLC (such as silent partners), then management by managers may be the best option.

Officers

Regardless of how a limited liability company is managed, it can still appoint officers to run the day-to-day operations of the company. An LLC is not, however, required to have officers. Officers serve at the pleasure of either (a) the managers, if the limited liability company is managed by managers, or (b) the members, if the limited liability company is member-managed. Members or managers may both be officers. There is no limit on the maximum number of officers, nor is there a limit on the number of offices that a person may hold. In fact, the same person may hold all offices.

Meetings

Regular or annual meetings of the members or managers are not required. The operating agreement included with the Legal Zoom LLC formation package does not require regular meetings, but states that meetings may be held as the members or managers deem them necessary to run the company. Even though it's not required by law, it may be a good idea to keep records of the actions taken or approved at the meetings.

Registered Agent

Each LLC must have a registered agent, the person designated to accept official notice if the LLC is "served" with a lawsuit. A registered agent must be either (1) an adult living in the state of formation with a street address (P.O. boxes are not acceptable) or (2) a company registered with the Secretary of State in the state of formation.

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