Info about the Limited Liability Company & Corporation

How Does a Limited Liability Company Conduct LLC Business?

Once your limited liability company is formed and an LLC Operating Agreement is adopted that provides the LLC with members and a governance structure, then what is required for the LLC to start acting like a business?


The limited liability company can only act through its members, managers and/or officers.  The LLC Operating Agreement should provide who has the authority to act on behalf of the limited liability company.  In the more simple member managed LLC structures, the members themselves have the authority to act on behalf of the LLC and are the agents of the LLC businesss when conducting business activity.

It is also common for a limited liability company to have operating officers such as a president, vice president, treasurer/CFO, and secretary.  Each of these officer positions are given authority with respect to its title.  An LLC can also hire employees and grant employees certain authority and responsibilities that can include acting on behalf of and binding the limited liability company.


It is not practical to require that every LLC action or decision be brought to the Members for an official vote of approval.  Accordingly, for day to day operational matters, the managing members, managers and/or officers make such decisions. 

However, it is often recommended that the agents of the LLC should not be able to make certain major decisions for an LLC without a proper and formal LLC member vote.  These decisions are generally listed out in the LLC Operating Agreement and subject to a specific rule that requires the approval of Members holding a certain percentage ownership of the limited liability company.

Common examples of such decisions include borrowing money, entering into transactions with a Member, selling all of substantially all of the assets of the LLC, entering into any major purchases of assets, and entering into a strategic transaction.

With some limited liability companies, only a majority vote will be required to approve while in others a higher vote or a unanimous vote is required. Each limited liability company has the flexibility to determine its own set of rules for how the LLC will operate in business, who can properly act on behalf of the limited liability company and when prior member or manager approvals are needed.

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