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As soon as LLC officer titles are decided, members can use an operating agreement to establish the company’s bylaws and ultimately guide it. Running an LLC requires less formality, so the leadership structure of an LLC is equally simple.
In this blog, we’ll discuss the essential titles you need to know to understand the LLC hierarchy and explore the other roles commonly found in LLC structures.
Key Takeaways
- An LLC’s hierarchy typically includes two primary roles:
- Members (owners)
- Managers (appointed to oversee day-to-day operations)
- Additional officer roles can be added to strengthen structure and efficiency, such as:
- CEO (Chief Executive Officer)
- CFO (Chief Financial Officer)
- Secretary
- LLCs can be structured in two ways:
- Member-managed – where owners handle operations directly
- Manager-managed – where designated managers run the business
- The chosen structure affects decision-making authority and daily responsibilities
- LLCs offer flexibility not typically found in corporations, making them an excellent choice for:
- Entrepreneurs
- Small business owners
- Startups seeking control without excessive formalities
Who Makes Up an LLC’s Hierarchy?
An LLC’s hierarchy has two main corporate titles: its members and managers.
LLC Members
LLC members are the company’s owners. Each member holds an equity stake and is entitled to specific rights and responsibilities defined in the operating agreement.
What are the Key Rights & Responsibilities of LLC Members?
- Financial Rights: Members share in profits, losses, and distributions according to their ownership
percentage or as specified in the operating agreement. - Right to Vote: Voting rights vary depending on the structure—equal voting in member-managed LLCs or more restricted voting in manager-managed LLCs.
- Inspection Rights: Members can inspect essential company documents, including tax returns, financial statements, and member contributions, as required by law in some states.
- Limited Liability: Members are not personally liable for company debts, lawsuits, or
obligations—one of the core advantages of LLCs.
LLC Managers
LLC managers handle the company’s daily operations when members choose not to. In a manager-managed LLC, one or more managers, who can be members or outside professionals, run the business on behalf of the owners.
What are the Key Duties of LLC Managers?
- Fiduciary Duties: Managers must act in the LLC’s and its members’ best interests.
- Indemnification: Managers may be protected financially against certain liabilities if outlined in the
operating agreement. - Limited Personal Liability: Like members, managers are not personally liable for the company’s
debts unless they breach fiduciary duties.
Related Resource
Watch this episode of NCH’s 60 Second Business Tip for more information about an LLC’s hierarchy.
Member-Managed LLC vs. Manager-Managed LLC: Which is Better?
Your ideal LLC structure will depend on the size and complexity of your business and whether your members wish to be actively involved in daily decisions or delegate those responsibilities. To help you choose between a member-managed LLC or a manager-managed LLC, use the quick guide below.
Feature | Member-Managed LLC | Manager-Managed LLC |
Decision-making | All members vote on business matters |
|
Complexity |
| Better for complex operations |
Best for | Small businesses with active owners |
|
Startup costs | Usually lower | May require compensating managers |
Can an LLC Have Officers?
An LLC can have officers, but some choose not to designate them. These individuals are helpful in assigning specific duties to members.
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Officers can be either internal members or external hires, depending on the structure of your business.
What are the Common Titles & Roles of LLC Officers?
LLC officers can hold the following titles and roles:
- Chief Executive Officer (CEO): Oversees the vision and strategic direction.
- President: Executes the CEO’s directives and manages operations.
- Vice President: Steps in during the President’s absence and may lead specific areas of responsibility.
- Secretary: Handles documentation, meeting minutes, and internal records.
- Treasurer/Chief Financial Officer (CFO): Manages financial planning, reporting, and bookkeeping
responsibilities.
It’s worth noting that the definitions mentioned above are general descriptions of these officer titles. You can modify them to be more specific according to your company’s needs.
How Do I Appoint LLC Officers?
To appoint LLC officers:
- Use your operating agreement to list each officer’s title and responsibility.
- If assigning titles after formation, vote and update the operating agreement accordingly.
- Avoid conflicting structures—e.g., assigning executive powers in a member-managed LLC may lead to internal disputes.
- Align roles with member experience and business goals.
You can amend your agreement as your company grows and requires a more formal organization.
What are the Other Major Titles Used By LLCs?
There are other major titles you may find in some LLCs, such as:
LLC Organizer or Executor
The LLC organizer or executor signs and submits formation documents on behalf of the LLC. Organizers can be LLC members or third-party providers, such as a formation company.
LLC Principal
LLC principals are members who have invested the most capital in the company. Unless the operating agreement states otherwise, they influence the company’s financial and managerial decisions.
LLC Governor
LLC governors are responsible for overseeing the LLC’s major business affairs. In a member-managed company, the governors will be the members. Meanwhile, they’re the managers in a manager-managed organization.
Three states use this term for business filings: DC, Idaho, and Washington.
Registered Agent
Registered agents are individuals or businesses responsible for receiving and handling legal correspondence on behalf of the LLC. They can be LLC members or third-party service providers.
Which Titles Should I Avoid?
While LLCs can use several titles, some would best be avoided, including:
Managing Partner
A general partnership is different from an LLC. This structure doesn’t offer the same limited liability as LLCs, so if you sign a contract as a partner, you could be liable for the company.
Sole Proprietor
Sole proprietorships are similar to general partnerships; they don’t offer limited liability. Using the term proprietor could also jeopardize your LLC’s asset protection.
Made-up or Humorous Titles
These designations could harm your company more. Made-up titles could confuse people and prevent them from understanding your position in the LLC. Meanwhile, humorous titles could make it difficult for potential investors to take your business seriously.
Frequently Asked Questions
The LLC hierarchy begins with members (owners), followed by managers (if appointed), and optional officers, such as a CEO or CFO. The specific structure is based on the operating agreement.
Positions may include members, managing members, managers, and officers (e.g., Chief Executive Officer, Secretary). These roles can vary depending on management style and business needs.
Unlike corporations, LLCs are not required to have a board of directors. However, some LLCs establish a board to create a sense of structure within the company. If you want to establish a board in your LLC, you must indicate it in your operating agreement and outline its structure and level of authority.
No, LLCs do not issue stock and cannot have shareholders. Instead, members hold ownership interests in the company based on their financial contributions.
A member is an owner, while a manager runs the business. In a member-managed LLC, all members are also managers.
Yes. Nevada LLCs must file an annual list of managers or members and pay the required fees to remain in good standing.
You can switch between member-managed and manager-managed by amending your operating agreement and notifying your state if required.
Generally, your LLC titles won’t change if you change your tax status to an S or C corporation. However, the IRS may use different terminology to refer to your LLC’s members and managers. For instance, LLCs taxed as S corporations must pay a reasonable salary to their corporate officers. If your LLC is member-managed, this designation will translate to all your members. The same rule applies to manager-managed LLCs and their managing members.
Yes. LLCs can hire non-members as managers to handle the day-to-day operations of an LLC while members remain passive owners.
Foreign entities do not pay more than domestic entities when forming an LLC in Nevada. Both are subject to the same state fees and requirements during the formation process.
A limited liability company (LLC) provides its owners with liability protection and other benefits. A DBA (Doing Business As) is not a legal entity but a registered name under which a business operates. Bear in mind that an LLC can have a DBA.
Nevada does not have a corporate or income tax. However, there is a corporate tax for any business that grosses more than $4 million per year.
No, starting an LLC in Nevada is not free of charge. There are mandatory filing fees, including the Articles of Organization and the initial list of managers or members. These fees are required to register and legally operate your LLC in the state.
Reinstating an LLC in Nevada costs $300. This reinstatement fee is in addition to any overdue annual fees and penalties. The total cost can vary depending on the length of time the LLC has been inactive and the accumulated fees.
Final Thoughts
Ultimately, choosing between a member-managed LLC or manager-managed LLC depends on your business’s size and the level of activity of its owners. But before you make a decision, you must know which type of LLC best suits the members you will be working with.
Are you ready to open your LLC? With help from NCH’s ’s business formation specialists, we can provide professional advice and ensure that all your documents are correctly filed.
DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.