Member-Managed or Manager-Managed for your single member LLC?

Before you form your LLC, you will decide on whether your LLC will be member-managed or manager-managed. The difference really lies in whether you will be the person running the day-to-day business operations of the company or whether you plan to hire someone to handle those day-to-day operations for you. 

In a member-managed LLC, you as the sole member are the manager of the Company. You will enter into business contracts, write checks, hire and fire employees, and all that good stuff. 

In a manager-managed LLC, the manager makes all those day-to-day decisions, but you as the member will make high-level corporate decisions like changing the manager of the LLC, adding new members to the LLC, approving borrowing, and buying or selling the LLC.

So can you be the sole member and the sole manager? Yes, you can. But if you are going to do that, I would think about what you are trying to accomplish with it. If it is because you plan on giving away some ownership interests in the company and being the manager where you retain all day-to-day decision-making, then I would say go for it. But if that isn’t your goal, my preference would be to form the company as a member-managed LLC. It will simplify some of the corporate governance of the company and if you plan on doing anything anyway, there is no need to be both the member and manager of your LLC.

Obviously, I’m making a lot of generalizations here. If you want to chat with me about your particular situation, schedule a discovery call here.