What is the difference between a “member” and a “manager” of an LLC?

Terminology with business entities can get confusing, especially when you want to figure what each person’s role is in the business. With a limited liability company, or LLC business, the people involved with business are typically designed as either “member” or “manager.” All members may be involved with forming an LLC, but there is usually a single manager unless the LLC is formed as more of a business partnership.

What is a business partnership? It is when two more individuals share in the ownership, responsibilities, and even risks of the business. In a partnership, it could be that each of the individuals involved has a management role if that is the way they decide to run the business. Traditionally, members and managers have these functions:

  • Member: A member functions similar to a stockholder of a corporation. The member is still an owner of the LLC but does not necessarily make the hard decisions in regard to its operations.
  • Manager: The manager of the LLC is basically the director. The manager takes care of business operations and the hard decisions. He or she may consult with the members for some issues but essentially runs the business.

The Articles of Organization which are typically filed during LLC formation may indicate who is a member and who is a manager. In general, however, managers and members share in the tax requirements and any other inherent risks and benefits of the business. Depending on the how the LLC is formed, all of the members and managers are likely to fall under the same tax ID.

If you feel like making any changes to the members or managers of an LLC, it is a simple thing to do that may not necessarily require filing any forms, though you may need to check the requirements of your particular state. File your tax ID application or any other necessary LLC forms easily using GovDocFiling.

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