Definitions of the Titles of LLC Officers

By Carrie Ferland

A limited liability company, or LLC, is a business entity often managed by various officers. Each officer typically has a different title and set of responsibilities. While the members of an LLC are free to develop any titles they choose, certain statutory designations apply to any person holding a specific position within the organization. The guidelines for forming and managing an LLC vary from state to state, so the particular titles for each designation may differ, although most states follow a similar structure.

Member

A member of an LLC is any person who owns or holds a vested interest in the LLC itself. Owners, managers, investors and lenders may all be members. Members can hold various titles, including president, vice president, treasurer and secretary, but these titles can be superficial. An individual member derives his authority from the LLC’s operating agreement, which defines each member’s duties, powers and obligations. Corporate officers -- including managers -- may be members of the LLC, but a corporate title does not automatically convey membership. Likewise, employees are not necessarily members; while members may offer stock or membership in the LLC as a benefit to employment, most employees of larger LLCs are not actual members.

Manager

Managers are appointed persons who supervise the internal practices of an LLC. An LLC administered by managers is referred to as “manager-managed,” in contrast to an LLC run by its own members, referred to as “member-managed.” Managers are rarely members of the LLC; instead, the members typically appoint experienced persons outside of the LLC to assume management responsibilities. Managers often comprise an executive board overseeing the LLC, call votes to make major decisions for the company and handle the company’s legal and financial matters.

Ready to start your LLC? Start an LLC Online Now

Shareholder

A shareholder is a person or entity who owns a portion of the LLC. Shareholders are almost always investors -- to fund the LLC’s start-up or expansion, the company may offer options to purchase a percentage of the company to shareholders in exchange for revenue. Shareholders are often members and may also serve as managers or hold other corporate titles.

Sole Proprietor

A sole proprietor is an individual who autonomously owns, maintains and operates her own business. Many states permit sole proprietors to organize as an LLC to sever their personal and professional interests; while the sole proprietor of a proprietorship may be personally liable for any claims brought against her business, the proprietor of an LLC is not. A sole proprietor is the only member of an LLC and assumes the roles of all other LLC officers in practice.

Registered Agent

A registered agent is the designated person (or, in states that permit it, entity) who acts on behalf of an LLC as the recipient of legal service within the state of operation. While a registered agent need not be a member of an LLC, he does need to reside full time in the state in which he acts as registered agent for the LLC. The agent’s primary function is to act as a liaison between the state of operation and the LLC itself -- should a claimant file a claim against the LLC, the agent is responsible for accepting service of notice and notifying the LLC. Many registered agents also receive tax notices, renewal forms and other notifications from the state and alert the LLC of any changes to state guidelines affecting the LLC’s operation.

Ready to start your LLC? Start an LLC Online Now
Can an Owner Be a Manager in a C Corporation?

References

Related articles

The Difference Between a C-Corporation & a Personal Services Corporation

A corporation is an independent legal body that is taxed separately from its owners. With proper setup, a corporation can provide tax advantages and shield its owners from liability for its debts, negligence and other legal obligations. All types of corporations are formed under state law by filing articles of incorporation with the state agency responsible for regulating businesses. In addition to general corporations, there are several types of specialized corporations, including personal service corporations. These businesses are either registered under state law or operate under the rules set out by the Internal Revenue Service governing their restricted ownership and management provisions.

What Belongs in the Bylaws?

Bylaws set forth the internal rules and procedures for running your corporation. There is no set form that bylaws must take under federal or state law, and you need not file these documents with any government office. However, there are several issues that should be addressed in your bylaws to ensure that your corporation operates effectively.

Can a Corporation Be a Member of an LLC?

A limited liability company, or LLC, is a type of business organization authorized by state statute. All state LLC statutes permit other types of business entities, such as a corporation or partnership, to serve as a member of an LLC, and usually place few restrictions on the ability of a corporation to be an LLC member.

LLCs, Corporations, Patents, Attorney Help

Related articles

Can I File a Personal Chapter 7 If I Am a Partner in an LLC?

You can file a Chapter 7 bankruptcy, the same as any other person, even if you are a partner (known as a "member") in a ...

Differences Between an LLC & an S Corp

Limited liability companies, or LLCs, and Subchapter -- or S -- corporations are legal formation options to consider ...

Incorporating Vs. LLC

One of the most important initial decisions in starting a business involves deciding what type of business entity your ...

What Are the Duties of a Non-Profit President?

The duties of the president of a nonprofit corporation are defined by federal and state law, as well as by the articles ...

Browse by category
Ready to Begin? GET STARTED