Does an LLC Have to Have a President or CEO?

By Salvatore Jackson

A limited liability company, or LLC, is a form of business organization popular among individuals looking to start a small business. Unlike a corporation, which requires the appointment of a board of directors, an LLC does not require managers, such as a president or CEO. The owners of an LLC are free to determine whether they will hire a president or CEO to run the LLC.

LLC Members

The members of an LLC are the individuals who have an ownership stake in the company. LLC members generally will provide financial investment in the LLC, but may also provide professional services or land in exchange for membership status. LLC members typically receive compensation as a percentage of the profit earned by the LLC. An LLC is a very flexible form of business organization. Most state filing agencies require the individuals organizing an LLC to disclose whether the members of an LLC will be conducting the day-to-day management of the LLC.

LLC Managers

If the members of an LLC do not wish to conduct the day-to-day management of the LLC, they have the option of hiring managers to do this. Managers are employees of an LLC that do not have an ownership stake in the LLC. Managers of an LLC may carry the title president or CEO. Managers of an LLC typically receive compensation in the form of a salary, rather than a percentage of LLC profits. If an LLC chooses to hire managers to conduct the day-to-day management of the LLC, most states require the disclosure of the name, address and title of LLC managers.

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Organizing LLC Managers

The flexibility of the LLC allows LLC members to determine how they want their LLC to be managed. If they elect to hire managers to operate their LLC, members may draft an operating agreement. An operating agreement is a contract that regulates how an LLC will be managed. By drafting an operating agreement, the members of an LLC are able to determine what types of business decisions will be made by LLC managers, such as a president or CEO, and what business decisions will be made by a vote of LLC members. Some states require an LLC to have an operating agreement.

Hiring and Terminating LLC Managers

In drafting an operating agreement, LLC members will typically devise a voting procedure for hiring and firing LLC managers, such as a president or CEO. If the members of an LLC do not draft a comprehensive operating agreement, state LLC statutes will provide a default procedure for hiring and firing LLC managers. Typically, LLC state statutes require a majority vote of LLC members to hire or fire LLC managers.

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Risks of Getting Sued With an LLC

The LLC, or limited liability company, is a form of business organization that is recognized by the governments of all 50 states and the District of Columbia. Although the LLC form offers investors a degree of limited liability that is moderately superior to that enjoyed by a corporation, investors do not enjoy airtight protection. LLCs themselves face significant potential liability.

LLC Voting Rights

Limited liability companies (LLCs) are owned jointly by a number of partners, called members. Members have the right to vote on a range of important company decisions, ensuring that members have a voice in the strategic guidance of the companies they own. Members do not have express voting rights granted by law; rather, individual members' voting rights are set forth by the members themselves in an LLC operating agreement. Establishing voting rights that are approved by all members can be vital to running an LLC smoothly and making timely strategic decisions.

How do I Register an LLC for Multiple Members?

A limited liability company, or LLC, is a “hybrid” business organization that combines the limited liability benefits of a corporation with the pass-through federal taxation and easier filing requirements of a partnership. The owners of an LLC are called members. State laws uniformly permit the creation of LLC’s with multiple members. Creating an LLC with multiple members requires filing a document, called the articles of organization, with the state agency responsible for registering business organizations.

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