Many single member LLC owners mistakenly think that because their business only has one owner, it cannot be a manager managed LLC. This is wrong.
In fact, many times, a business gets too large or complex for the one member to be able to handle all the management of the business. In such a case, he/she will want to appoint other managers and have a Board of Managers or at least hire a slate of officers to help with day to day management.
Any limited liability company, regardless of the number of owners, can choose a member managed or a manager managed governance structure. And, even within each of those structure, the LLC can be tailored with specific operational and governance rules that are necessary for that business.
The decision and the details of a manager managed LLC is evidenced in the single member LLC operating agreement. It is important to document the structure and for the LLC to follow the provisions set forth in that agreement.
If you are appointing an outside manager for an LLC corp, make sure that he/she understands what authority and what limitations are part of the role. And, always retain the ability to remove a manager with or without cause.
