Member-Managed LLC
Definition
A Member-Managed LLC is a management structure where all owners (members) actively participate in the day-to-day operations of the business. In this structure, every member has the legal authority to bind the LLC to contracts, sign checks, and make operational decisions on behalf of the company.
Why it matters
This is the "default" management structure in almost every state. If you don't explicitly choose a management structure when forming your LLC, the state will assume it is member-managed. For a single-member LLC, this structure is standard because the sole owner is inherently the one managing the business. For small businesses with a few active partners, this structure keeps things simple since everyone has equal authority to run the business.
Example
Emily starts a solo freelance writing business and forms a single-member LLC. Because she is both the sole owner and the person doing all the work, she selects "Member-Managed" on her Articles of Organization. She has full authority to open the business bank account and sign contracts with her clients.