R. Shawn McBride recently spoke about the choices in managing an LLC.
We’ve been collecting feedback from the community, hearing what types of issues people are dealing with. We have been talking about LLCs versus corporations. One of the recent questions we’ve gotten is “How do I manage my LLC?” If you have questions, send them to me or comment below
Which management structure is best for your LLC? What works for you? It is a personal decision. Figure out what works for your business, and how you want to run your business. Do you want to have a traditional board of directors? Do you want to have management by your sole authority or “member-managed”? Or maybe you can give yourself the title of manager, and have it “manager- managed.” A great thing about an LLC is that you get to choose how you manage it. You do not have to do anything structured a certain way. When it comes to LLCs versus corporations, if you run a corporation, you are tied into having a Board of Directors, unless you do something special. If you are running an LLC, you get to decide.
We see major choices, such as a Board of Directors in a corporation, which is sometimes best for a company. A second choice is to have it member-managed, which means the owners of the LLC vote in proportion, often to their percentage of ownership, and decide what the LLC does. A third choice to manage an LLC is to make it manager-managed. That doesn’t mean it has to be you as the manager, it could be somebody else. It could be a group of managers, but you will appoint certain people to manage your LLC.
You get to choose which of these structures is best for you. Then, as you advance, you can do things like “veto rights.” Sometimes certain investors will say, “I will give you money for your project or your company, but don’t do certain things unless I authorize them.” You can set up management so that one person has day-to-day authority, but another person has veto rights.
The beauty of the LLC is that you get flexibility, so we build the structure around what you, the client, wants. You get to pick the management. Which management is best? There is no one answer. It’s the one that is best for you and your situation.
That is what we’re seeing out there. What has been your experience with LLCs? If you have any suggestions, please let us know in the comments below. We’ll be working with you on your topics about business, business management, and business law.
Each case is unique. Past results do not guarantee future outcomes. This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. FreeImages.com/photographer jonpaul james.
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