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Manager-managed vs member-managed LLC: what's the difference?

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Manager-managed vs member-managed LLC: what's the difference?: EXNNA guide cover, with New Mexico lit on a dotted map of the United States
New Mexico (NM), a U.S. state, lit on the map of the United States.

Manager-managed vs member-managed is about who runs the LLC. In a member-managed LLC, the owners run it directly. In a manager-managed LLC, the company is run by or under the authority of one or more managers. Every LLC that EXNNA forms in New Mexico (NM), a U.S. state, is manager-managed. By default all members are managers, so nobody loses a say, and the members can elect one Chief Executive Member to run it alone.

What is the difference between manager-managed and member-managed?

Member-managedManager-managed
Who runs the companyThe membersThe manager or managers
What the Articles sayRun by the members"Managed or under the authority of a Manager(s)"
Where the details areOperating AgreementOperating Agreement

The labels tell you where authority sits. Member-managed puts it with the owners. Manager-managed puts it with whoever the company names as manager, who may also be an owner.

Why is every EXNNA LLC manager-managed?

Because it keeps the setup simple and private. The Articles of Organization, the public filing that creates the company, carry only the management line, not who the managers are. So the record stays clean whether you have one member or ten. You don't pick a type at checkout: it's the same on every order.

What is a Chief Executive Member?

A member the others elect as the sole manager. It suits companies with several owners who want one person making day-to-day decisions. Owning a share and managing the company stay separate: the Chief Executive Member runs it, and the Operating Agreement still records who owns what.

With a single owner, nothing to decide. You're the member and the manager.

Do the managers appear on the public record?

No. The record shows the management line, and Member and Manager Information reads "None Entered". It doesn't say whether every member manages or one Chief Executive Member does. Here's whether an LLC owner's name is public, and how an anonymous LLC in New Mexico works.

Who signs for the company?

The managers, as set out in your Operating Agreement. When a bank or a counterparty asks who can sign, you show them that agreement. It's private, it isn't filed with the State, and it names the members and managers.

Where do you set who manages?

In the Operating Agreement, which comes with every formation in PDF and editable DOCX. Give us the members' details and it arrives filled in; skip them and the fields are blank for you to complete. Update it when a member joins or leaves, or when roles change. Read more about the LLC Operating Agreement.

Everything is included in one price, on our pricing.

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FAQ

Is an EXNNA LLC manager-managed or member-managed?
Manager-managed. The Articles of Organization read "managed or under the authority of a Manager(s)" on every order.
Who are the managers?
By default, all members are managers. The members can instead elect a Chief Executive Member as the sole manager.
Do the managers' names appear on the public record?
No. Member and Manager Information reads "None Entered". The private Operating Agreement says who the members and managers are.
Can I change who manages the LLC later?
Yes, by updating the Operating Agreement. Basic adjustments are included; new clauses are quoted first.

Sources

  • New Mexico Limited Liability Company Act, NMSA 1978 §§ 53-19-1 to 53-19-74, official text (checked )
  • New Mexico Secretary of State, Business Services (checked )

General information, not legal or tax advice.