Manager or member-managed, state by state.
Every LLC runs one of two ways. Member-managed means every member can bind the company and take part in day-to-day decisions. Manager-managed means designated managers do that and the other members are passive. The choice decides who signs, who owes duties to whom, and how much of it is public. Some states want it declared in the formation document. Pick yours.
Four things the choice actually decides.
This looks like a box on a form and behaves like a governance decision. These four are what changes when you pick one structure over the other, and one of them is decided by your state rather than by you.
Member-managed in practice
Every member has authority to bind the LLC and a hand in day-to-day decisions. It is the simpler structure and it suits companies where the owners are the operators. It also means every owner carries the authority that comes with it, including the ability to sign.
Manager-managed in practice
One or more managers bind the company and run it. Members who are not managers hold an economic interest without operational authority. That is the arrangement outside investors usually expect, and it is the reason the structure exists at all.
What the state asks for
Some states require the structure to be designated in the formation document, with the managers named there. Others do not ask, and leave the question to the operating agreement. That decides how much of your governance sits on the public record and how much stays internal.
Fiduciary duties shift
Who owes duties, and to whom, moves with the structure. In a manager-managed LLC those duties sit with the managers rather than with every member. The structure can be changed later by amendment, but until it is, the duties follow the structure and not the intention behind it.
Two structures, one decision, usually made in a hurry. It is worth ten minutes.
Pick your state.
Each state page covers the choice in that state: what its default is and what its formation document discloses, when manager-managed makes sense, how fiduciary duties shift, and how to switch structures later by amendment.
A clean handoff, in four steps.
You tell us who is going to run the company. We put that structure in the formation document where the state requires it, draft the operating agreement to match, and set the signing authority behind it.
Decide who runs it
Start with the practical question: who makes day-to-day decisions and signs for the company. The structure is a description of that answer, not a substitute for having one.
Pick it in the articles
Where the state requires a designation, the structure goes into the formation document and the managers are named. Where it does not, the operating agreement carries the answer instead.
Match the operating agreement
The operating agreement sets out the authority, the limits and the duties attached to whichever structure you chose, and identifies the managers where there are managers to identify.
Set up signing authority
Banks, landlords and counterparties all ask who can sign. Signing authority is set to match the structure, and revisited if investors arrive and the arrangement changes.
One box on a form, four consequences. Set it deliberately.
The rest of Compare & choose.
Every one of these is built the same way: a national explainer above its state pages. They are the filings that sit closest to this one.
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All 51 states →The full index lives on Compare & choose.
The questions people ask before they choose.
What is the difference between the two?
In a member-managed LLC every member can bind the company and take part in day-to-day decisions. In a manager-managed LLC designated managers do that, and members who are not managers hold an economic interest without operational authority. The difference shows up in who can sign contracts, who owes fiduciary duties, what the public record discloses, and how outside investors are accommodated.
Which one is the default?
Defaults are set by state law and they are not the same everywhere. Some states also require the choice to be declared in the formation document, which makes the default beside the point because you are stating it either way. Your state page covers both the default there and whether the formation document has to disclose the structure and name the managers.
Can I change it later?
Yes. The structure can be switched later by amendment, which is why it is worth choosing deliberately without treating it as irreversible. What matters is that the change is made properly: the formation document amended where the state requires a designation, and the operating agreement updated to match, so the two documents do not describe two different companies.
Does the public see who manages the LLC?
It depends on the state. Where the formation document has to designate the structure and name the managers, that information sits on the public record from the day the company is formed. Where the state does not ask, the governance arrangement stays inside the operating agreement. That difference matters to owners who would rather not appear on a public filing.
When does manager-managed make sense?
The common case is a company with owners who are not operators: outside investors, passive members, or a group large enough that giving everyone authority to bind the company is impractical. Concentrating authority in named managers makes the chain of decisions legible to banks and counterparties. Each state page has a section on when the structure fits in that state.
Who has fiduciary duties?
Duties follow the structure. In a member-managed LLC they sit with the members who run it, because that is everyone. In a manager-managed LLC they sit with the managers, and members without operational authority are in a different position. That shift is one of the real consequences of the choice and it is why the operating agreement has to match the structure on file.
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