What does “management structure” mean?
When forming an LLC, you’ll choose how the business is managed:
Member-managed
Manager-managed
This determines who runs the day-to-day operations and makes business decisions.
Member-managed LLC
In a member-managed LLC, all owners (members) are actively involved in running the business.
How it works:
Each member participates in daily operations
Members make decisions together
No separate manager is appointed
Best for:
Small businesses
Single-member LLCs
Businesses where all owners want to be involved
Manager-managed LLC
In a manager-managed LLC, the members appoint one or more managers to run the business.
Managers can be:
Members of the LLC
Or outside individuals
How it works:
Managers handle day-to-day operations
Non-managing members act more like passive owners
Decision-making authority is delegated
Best for:
Businesses with multiple owners
Investors who are not involved in daily operations
Companies that want centralized management
Key differences
Feature | Member-Managed | Manager-Managed |
Who runs the business | All members | Designated manager(s) |
Member involvement | Active | Can be passive |
Decision-making | Shared among members | Handled by manager(s) |
Complexity | Simpler | More structured |
Which should you choose?
Choose member-managed if you want all owners involved in running the business
Choose manager-managed if you prefer to delegate operations or have passive investors
Summary
Member-managed = owners run the business
Manager-managed = managers run the business
Both are valid — it depends on how you want your LLC to operate.
If you’re unsure which structure fits your business, feel free to reach out — we’re happy to help.