Due to the liability protection they offer, Limited Liability Companies (LLCs) are a popular alternative for small business owners. However, an LLC’s management structure might be challenging to understand. Whether a managing member is a manager is one frequent query.
Understanding the various styles of LLC management is necessary in order to respond to this query. Member-managed and manager-managed are the two main categories. All members (owners) of a member-managed LLC have equal management and decision-making power. One or more managers are chosen to oversee daily business operations and decision-making for the LLC in a manager-managed structure.
A managing member is a manager, then. Yes, but only in a manager-managed LLC. A managing member is a member who serves as the company’s manager to oversee operations. All members of a member-managed LLC have equal management authority, and no one member may be regarded as a manager.
Let’s move on to a related concern: Are managers of LLCs employees? The response is not always true. In accordance with the terms of their contract with the LLC, managers may be either employees or independent contractors. A manager is more likely to be categorized as an independent contractor if they have authority over the LLC’s daily operations and decision-making. However, they can be regarded as employees if they are under the control and supervision of the LLC.
The possibility of operating two enterprises under one LLC often comes up. Yes, it is the answer. As long as they are relevant to the LLC’s overarching goal and registered with the state, an LLC can operate more than one business. For instance, if an LLC is set up to offer consultancy services, it may also sell associated goods or give training services.
Next, may an LLC have a managing member who is not an owner? No, is the response. An LLC member who also oversees the running of the business is known as a managing member. As a result, an LLC owner must also be a management member.
Last but not least, how do you dissolve an LLC in Texas? A Certificate of Termination must be filed with the Texas Secretary of State in order to dissolve an LLC in that state. You can do this via mail or online. You must also follow any procedures indicated in the operating agreement of the LLC and make sure that all unpaid debts and obligations are settled before the termination is final.
In conclusion, it’s critical for small business owners to understand the fundamentals of LLC management, even though doing so might be challenging. In a manager-managed LLC, a managing member is a member who is also appointed as a manager. An LLC may operate many enterprises as long as they are connected to the overarching goal, and managers may be either employees or independent contractors. The LLC must also be owned by a managing member, and in Texas, dissolving an LLC entails submitting a Certificate of Termination and according to any instructions contained in the operating agreement.