question.jpgIn Business Law

How are LLCs controlled and managed?

One of the advantages to forming your business as an LLC instead of a corporation is that you have more flexibility in how the business is controlled and managed. This is because the LLC laws do not require you to have a board of directors, and many smaller LLCs can avoid having officers (presidents, vice- presidents, etc.). Thus, you are given a fair amount of flexibility as to how you want your LLC to be controlled and managed. You can have a single member control the entire business, you can have some collective group of members (or even all the members) control the business, you can use an outside manager or management group, or you can use some combination of members and nonmembers.

These various options basically fall into two classifications. Where an LLC is run by its members, this is known as member-managed, and it is therefore run much like a partnership. Alternatively, where an LLC is run by non-members, this is known as manager-managed, and this is more similar to corporate control, with the managers being appointed by members.