A LLC may have two CEOs. No, is the response. An LLC may have more than one member, but it may only have one manager who is specifically named. In addition to supervising the other team members, this manager is in charge of managing the daily operations of the company.
It’s significant to remember that the LLC structure does not recognize the word “CEO”. An alternative term for the appointed manager is “managing member” or “managing director.” This person is often included on the operating agreement for the LLC, which describes the policies and procedures guiding the business.
So what other options are there for multiple owners if an LLC can only have one designated manager? One possibility is to designate one member as the management member and the other members as non-managing members. Non-managing members still have a voice in corporate decisions and receive a share of the profits even though they don’t carry the same amount of responsibility as managing members.
The appointment of a board of directors or advisors, who can give the managing member direction and assistance, is an additional choice. However, the management member continues to have final say in all decisions.
There are four additional popular business structure forms besides LLCs: sole proprietorship, partnership, corporation, and S corporation. The simplest and most typical sort of business structure is the sole proprietorship, in which the owner is directly liable for every part of the company. Partnerships consist of two or more people who share ownership and management of the company. Corporations can be taxed, sued, and held accountable for their activities since they are different legal entities from their owners. Last but not least, S companies resemble corporations but give their owners some tax advantages.
And what is the optimum tax structure for an LLC, I hear you ask? LLCs have the option to select their tax structure. The income and losses of LLCs are often recorded on the owners’ individual tax returns because they are taxed as pass-through businesses by default. For potential tax advantages, LLCs might choose to be taxed as corporations or S corporations.
An LLC’s manager may or may not be an owner. A member of an LLC is the entity’s owner. Multiple members are permitted in LLCs, and an owner is not required to serve as the managing member.
Depending on how big and well organized the company is, an LLC may have one or several managers. However, there can only be one designated management member in charge of carrying out daily duties and making decisions. It is also possible to appoint non-managing members to advise and assist the managing member.