September 17, 2016

Can One Member Also Manage The LLC To The Exclusion Of The Other Members?

I would like to set up an LLC where I also retain final decision making on all issues. Is this possible. If so, is it accomplished by designating myself as also the manager? Or do I simply set it up as a member run LLC but then clarify management issue in the operating agreement, or something else entirely?

Answer

How the LLC is managed day to day is determined by the operating agreement.

If you don’t have an operating agreement, then your state LLC statute determines how your LLC is run.

Therefore, it is crucial that you have a written operating agreement specifying and detailing how management decisions are made. Mere designation as manager might not be sufficient.

The most comprehensive and safest solution would be to form your LLC and prepare a limited liability company operating agreement.

Answer the questions asked of you in drafting the operating agreement.

The next step is to take the operating agreement created for you to a local lawyer who specializes in small business transactional matters and have him/her review it and make any needed corrections.

This will be FAR less expensive than having an attorney draft your operating agreement from scratch.

You get the best of both worlds–cost effective legal work from a document processing company, combined with the security of knowing an actual human lawyer has reviewed the document.

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