The Difference Between A Manager-Managed vs. Member-Managed Business

Brad Smith • October 27, 2019
One of the most frequently asked questions we received has to deal with manager-managed vs. member managed businesses.


To take a step back, it’s important to understand that this type of management only applies to a limited liability company, or an LLC. An LLC is a legal business structure “that combines the taxation benefits of a partnership with the limited liability status of corporations.”

The owners of an LLC are called “members.”

Members, according to the IRS, may be individuals, corporations, other LLCs, and foreign entities.

LLCs have no maximum number of members, and most states permit LLCs having only one owner.

Some LLCs choose to hire professional managers to handle the day-to-day operations of the business, leaving members free for other duties.

In this video, we look at some of the differences between being a member-managed or a manager-managed business, as well as what typically happens when managers disagree.

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