What is a Member-Managed LLC?
In a member-managed Limited Liability Company (LLC), all the members of the Limited Liability Company (LLC) participate in running the business.
What is a Manager-Managed LLC?
In a manager-managed LLC, individuals are elected or designated as managers. These managers have an active role in running the LLC, while the remaining members are passive investors. Managers can be members of the LLC or outsiders/nonmembers of the LLC. Managers have the authority to enter into contracts on behalf of the LLC.
How does an LLC designate its management structure?
The LLC’s operating agreement is a critical document for the operation and management of the company. Although Washington law does not require LLCs to have an operating agreement, it is incredibly helpful to have this document that defines the responsibilities of the members and managers. In Washington State, LLCs are presumptively member-managed unless the operating agreement states otherwise.
To find out more about the different types of LLC’s, and to get help properly structuring your LLC, contact Dimension Law Group today.
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