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What is a Managing Member?

Logo for Quora, where Dana Shultz wrote about the meaning of the term " managing member "The post is about the definition of the term ” managing member “. I am writing this because of a Quora question that I answered a short while ago. Please see What is the difference between a managing member and a member in an LLC?

I have not confirmed whether all of the following background information applies equally to all states. However, I know that it applies to enough states that I will present the following as applying throughout the U.S., generally.

Background Information

A limited liability company (LLC) has two types of essential participants:

  • One or more members are the equity holders (comparable to shareholders in a corporation).
  • One or more managers are responsible for running the LLC (comparable to a combination of directors and officers in a corporation).

When an LLC is formed, the formation document (Articles of Organization, etc.) filed with the Secretary of State specifies whether the LLC is member-managed or manager-managed.

  • In a member-managed LLC, all of the members also are the managers.
  • In a manager-managed LLC, managers may be members, but they do not need to be members.
Meaning of Managing Member

So, to answer this question directly:

  • A managing member is a member who also is a manager.
  • In a member-managed LLC, all members are managing members.
  • In a manager-managed LLC, some, or all, or none of the members may be managing members.

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Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
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