Manager-Managed LLC
A manager-managed LLC means the members hire someone to manage day-to-day operations. Business owners can change the management structure from members to managers by following the operating agreement rules and amending the articles of organization. In a manager-managed company, management is vested in one or more managers who are appointed by the members. The members elect managers from within their own group or externally. A manager can bind contracts, make decisions, act on behalf of the company, and run it daily.
Member-Managed LLC and Adding Members
I’m thinking that rather than a new member-managed LLC, I change the one registered to a 3-member partnership. To turn the 1-manager LLC into a 3-member one, LLC owners have two options – act as a manager yourself or designate someone else like an investor. In a member-managed LLC, the owners listed in articles of organization run operations and have voting rights as established in the agreement. Benefits include no need for passive members to participate and no hiring costs.
To add an LLC member involves amending the operating agreement to include the new member. Current members vote on the amendment and most states require unanimous approval. A manager may be a member but does not have to be. The choice between member or manager management significantly impacts day-to-day operations; hence it’s advisable to consult an attorney.