What is Member-managed and manager-managed LLCs?
In short
In a member-managed limited liability company (LLC), all members manage the business and act as its agents. In a manager-managed LLC, designated managers run it, and members aren't agents just because they are members.
Key takeaways
- The operating agreement sets out management, voting and profit sharing.
- Those who manage owe fiduciary duties of loyalty and care.
- Members' liability is limited in both forms.
Where it's tested
REG: Business Law: Agency & Business Structures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A principal fires an agent but does not notify a long-standing supplier who had regularly dealt with that agent. The former agent places an order with the supplier in the principal's name. Who is liable to the supplier?