What is an LLC Member

What is an LLC Member

What is an LLC Member?

Answering what is an LLC Member is pretty straight forward, but the actual explanation of a member is defined in terms of how it is compared to a manager of an LLC.

Here is the skinny. A member has a vested business interest in an LLC. They generally have duties within the company and serve to run it. A manger is a distinct member who is identified at the formation of the LLC. In the full formation of many Texas corporations, there is the consideration of who does what. LLCs are no different.

On the formation paperwork, the owners can either list everyone as a member with the rights to manage the company, or they can set aside the management rights for managers. If no managers are set aside, and only members are described in the formation paperwork, then the members are managers as well. This is known as a member-managed LLC.

The pros and cons to naming some owners as members and some as managers are practically non-existent unless your have other companies as LLC members. In practice, it is typically made in such a way that all the members are member-managers. Rarely have we ever seen an LLC with managers and members as distinct groups owning an LLC. This keeps things fair and allows for everyone to fully participate in the business.

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