What is the Role of a Member in an LLC? 

In this episode of Coffee with Carl, attorney Carl Zoellner explains the role of a member in an LLC.


Hello everyone!

Welcome to another episode of Coffee with Carl. I am your host Carl Zoellner, one of the attorneys here with Anderson Business Advisors. 

Today, I will talk about LLCs. In a previous video, we talked about different positions in a corporation. I want to do the same thing on the LLC side.

Who are the owners of an LLC?
When we talk about the owners of a corporation, we are looking at shareholders. When we are talking about the owners of an LLC, we are looking at the members of the LLC.

When we look at the membership position within an LLC, it’s essential to know this distinction. Many of the duties are going to reflect what you see for the shareholders in a corporation. Therefore, the members make the bigger global decisions for the business entity. 

For example, encumber the property of the entity… or if you’re going to dissolve the entity… or potentially change the line of business you’re in… or make changes to the operating agreement. These are member-type decisions. The other decisions are made by the managers within the business entity. 

There are a couple of different ways to set up these entities. You can set them up as either member-managed or manager-managed. If it’s member-managed, then all of the members or owners have management implications within the business entity. If it’s manager-managed, it means some of the members may have management capacity. However, it also could mean that a third party could be managing that entity as well. That third party could be an individual or a business entity.

To sum up, your members within your LLC are going to be the owners, and they make the big decisions. If they’re member-managed, then they make all the decisions.

The Takeaway

If anybody has any questions and you are our client, you’re more than welcome to schedule a time with me or any of the other attorneys. 

As always, take advantage of our free educational content and every other Tuesday we have Toby’s Tax Tuesday, another great educational series. Our Structure Implementation Series answers your questions about how to structure your business entities to protect you and your assets. One of my favorites as well is our Infinity Investing Workshop.

Additional Resources:

Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com.