Manager Managed, Single Member LLC

Is it possible to have a single member LLC, that is managed by a another individual, that has no ownership interest in the company?

If yes, what agreements would one need?

– John, California

Answer

You can create such an arrangement, and it is called, as you accurately guessed, a “Manager Managed Single Member LLC”.

The beauty of the limited liability company is that you have great flexibility in how your LLC is managed and owned.

Management and ownership of your LLC is controlled by the Operating Agreement.

Your Operating Agreement can specify pretty much any arrangement you and the other members agree on, from profit distribution, guaranteed payments, how taxes are passed through, and more.

If you use a service like Legalzoom to form your limited liability company, they will ask you questions regarding whether you would like the LLC to be member-managed or manager-managed.

Answer those questions accordingly.

All Legalzoom LLC packages come with a customized Operating Agreement. This Operating Agreement will be a good start for most people’s purposes. If you need further help, you should consult with a California attorney to make appropriate modifications.

It will be far less expensive to have your CA attorney modify an Operating Agreement from Legalzoom than to go to have the same attorney create an Operating Agreement from scratch.

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