Member-managed LLC
An LLC where members directly manage the business. The default structure under Delaware LLC Act.
Definition
In a member-managed LLC, the members have direct authority to act on the LLC's behalf and manage its day-to-day operations. This is the default structure under 6 Del. C. ch. 18 unless the Operating Agreement specifies otherwise. Single-member LLCs are member-managed by default and necessity.
Context
Most non-resident bootstrap founders running single-member or simple multi-member LLCs use member-managed structure for simplicity.
Example
A solo Bangladeshi founder's Delaware single-member LLC is member-managed: the founder makes all decisions and acts on behalf of the LLC.
Common pitfalls
- For multi-member LLCs, member-managed structure means any member can bind the LLC; this can create dispute potential.
- Some banks and counterparties may want to see explicit Operating Agreement provisions even for member-managed LLCs.