What Is a Limited Liability Company Title?
An LLC title is a designation used on all business documents filed with the state, including any contracts or agreements between members of an LLC. It is the titles held by management as well as lower-level employees, including but not limited to:
- Project Manager
Why Use Limited Liability Company Titles?
There are many reasons to use limited liability company titles. Every organization has a management hierarchy that allocates certain responsibilities to certain persons. Here are some other benefits of using titles.
Benefits of using limited liability company titles include:
- Helps distinguish the roles of the owners
- Helps clarify the level of responsibility and authority
- Helps decide who's in charge when there is a question
- Helps LLC members know who to go to with their concerns or questions
What Do You Call an Owner of an LLC?
In many cases, an LLC owner is referred to as a member. A member may not be an individual but could be a corporation, partnership, trust, estate, or another type of entity.
Who Is an LLC Member?
LLC members are people who own shares in the LLC. Members usually receive dividends based on profits made by the LLC.
If an individual becomes a member of an LLC, he or she is known as a general partner. General partners make up the board of directors and manage the day-to-day operations of the LLC.
In order to become a member of an LLC, you must meet certain requirements. For example, you must provide proof of identity and residency. You must also complete a membership application, which requires providing information about yourself and your business.
You should always consult with a lawyer before signing any document related to your LLC.
LLC Management Structures
There are two types of management structures available when creating an LLC: member-managed and manager-managed.
In a member-managed LLC, the LLC’s owners, sometimes known as a “member-manager,” manage the day-to-day operations of the company. A member-managed LLC will hire employees and make decisions about how to run the business.
LLC managing members are also responsible for paying taxes on behalf of the company, and they are personally liable for any debts incurred by the company. For this reason, it is a best practice to take legal or tax advice from a reputed law firm that specializes in business law. Also, an LLC managing member must usually get tax advice from a CPA (Certified Public Accountant). Legal or tax advice will usually require expertise versed in state law and able to provide legal direction for new members.
Note: An annual report contains both financial and legal information to help ensure liability protection for members of an LLC. In a single-member LLC there is only one member managing the business.
In a manager-managed LLC, a manager manages the daily activities of the LLC. They hire employees and make decisions about how to run the company.
There are two types of LLC managers: external and internal managers. External managers are outside the organization; the owner hires them to help them run the business. Internal managers are those inside the organization; they are usually part of the executive team.
Member-Managed LLCs vs. Manager-Managed LLCs
Both member-managed and manager-managed LLCs have their benefits and disadvantages, meaning choosing the best one will depend on an LLC’s size, budget, and goals.
In a member-managed LLC, the members have control over the management of the company. Smaller LLCs may find this structure more beneficial due to its easy setup, flexibility, and low cost.
Manager-managed LLCs, on the other hand, might be better suited for larger companies with many owners and investors. That being said, manager-managed structures are harder to set up and, if you use a professional manager, will be more costly.
Related Reading: Member-Managed vs. Manager-Managed
Examples of LLC Titles
While LLCs are not required to designate titles for their members, they can do so in their operating agreements if they wish.
The most common LLC titles are officer titles. LLC officers are responsible for running the day-to-day operations of the company and include the president, vice president, secretary, and treasurer.
LLC officers run the company. Some vital roles include hiring employees, paying bills, keeping records, and making sure everything runs smoothly. Officers also handle legal matters, including drafting contracts, buying insurance, and dealing with creditors.
The most common LLC officer titles and their typical duties are listed below:
- Chief Executive Officer (CEO): CEOs are usually the highest-ranking officers in an organization. They are responsible for setting direction and strategy for the entire organization, and their primary goal is to maximize profit.
- President: Presidents are responsible for making major decisions about the company. They also oversee day-to-day operations and hold the final say in all important decisions.
- Vice President: A vice president often supervises employees' work and is typically involved with the company's day-to-day operations.
- Secretary: Secretaries play a role in recording all official documents and handling routine correspondence.
- Assistant Secretary: Like a secretary, an assistant secretary handles routine correspondence and performs some administrative duties.
- Manager: The manager is responsible for hiring employees and oversees the day-to-daily operations of the company. They also make decisions about how to run the business.
Other titles you might use in an LLC include:
- Chief Financial Officer: This is the person in charge of the finances of the company. He/she oversees all aspects of the company’s finances.
- Principal: An LLC principal is typically the member with the highest ownership percentage in an LLC.
- Registered Agent: A registered agent is someone appointed by the corporation to receive service of process on behalf of the company. This means that they must accept service of process, other legal documents, and correspondence on behalf of the company. A registered agent can be a lawyer, law firm, or agency.
- Board of Directors: Traditionally, a board of directors is a group of directors elected by corporate shareholders, and they oversee the corporation’s activities. LLCs are not required to have a board of directors but can choose to adopt a similar management style in their operating agreement.
Consultant: Consultants are professionals hired to help out with certain projects. Consultants can be lawyers, accountants, or even marketers.
LLC Titles to Avoid
An LLC title is meant to clearly establish a person’s role in the company. With that in mind, there are some titles that should be avoided:
- Managing Partner/General Partner: Using titles with the word “partner” in them could imply that a company is a partnership instead of an LLC
- (Sole) Proprietor: Similar to above, this title implies that a business is a sole proprietorship.
Humorous Titles: Titles like “Chief Exciting Officer” may be amusing internally but does not offer any credibility.
Advantages and Disadvantages of LLC Job Titles
There are pros and cons to having LLC job titles.Titles can help individuals better understand their roles in the company. What’s more, using titles other than “member” can help with clarity, especially when interacting with clients.
That being said, if you utilize similar-seeming titles without establishing what each title entails, you may end up confusing yourself, your employees, and even your clients.
How to Choose an LLC Title
Choosing an LLC title that is appropriate and easy to understand can be daunting. Here are some tips to help you get started:
- Think about what position you want to hold. If you’re the only member of your LLC, a title like “CEO” or “President” may suffice, but if you have multiple owners or titles you could hold, consider your strengths and weaknesses.
- Layout clear duties for the title. This is especially important if you have many titles to keep track of.
- Maintain an operating agreement. Even though LLCs are not beholden to bylaws and other official formalities like corporations, these titles and duties should be recorded in the LLC’s internal records.
Get legal advice. If you’re unsure about how to establish titles in your company an attorney may be able to help you with your operating agreement. What you learn on the web should be for informational purposes only.
Frequently Asked Questions
What is my title if I own an LLC?
An LLC owner’s title is simply “member” by default; however, owners can choose to adopt other titles like “CEO” or “president” if they so choose.
What's the owner of an LLC called?
LLC owners are referred to as "members."
Can LLC members of a manager-managed LLC make decisions?
A manager-managed LLC employs a manager to run the business and make day-to-day business decisions. However, LLC members may change out LLC managers and even become managing members under certain circumstances (e.g., an LLC bank account gets depleted). How LLC members handle managers is often laid out in the LLC operating agreement.
What is a good title for a business owner?
Business owners often use titles like “CEO,” “president,” “director,” or even simply “owner.”
Can an LLC be run by one person?
Yes. These are referred to as “single-member LLCs.”
Can you be CEO of an LLC?
A member may be designated as CEO or president of an LLC if they so choose, provided that all members are in agreement.