How is an LLC organized and managed?

An LLC can be managed in one of two ways: Member-Managed or Manager-Managed

In a Member-Managed LLC (which is by far the most common type), the company is managed like a partnership or sole proprietorship with each Member participating in the day-to-day activities of the LLC. Members may be designated as “President” or “Treasurer”, but this is not required; many times they simply refer to themselves as “Managing Member” or simply “Member”.

In a Manager-Managed LLC, the company designates a Manager or Managers (who may or may not be Members) to run the day-to-day activities of the company. The other Members may or may not be involved in the daily operation of the company, they simply provide money or assets for the managers to operate the company. This is fairly rare for small businesses.