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Written by : Cassaundra Clyne
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i get this question asked a lot is there any legal limit to the number of members in an llc the short answer is no there is no legal limit prescribed by most of the states of course there's practical limits a few hundred per llc has probably the most that's ever been filed however this question is governed by state statute and your local regulations contact us for more information on forming your llc
Thanks for your comment Gema Radice, have a nice day.
- Cassaundra Clyne, Staff Member
hi everyone welcome back if you're new here my name is lena i'm a certified public accountant this video is part of my series of videos that will help you start your business and will help you understand what business structure is the right choice for you in today's video i want to continue the subject of a limited liability company specifically let's chat about llc officer titles by the way if you're considering starting an llc and you need some guidance i have multiple videos here on my channel that will help you get started i will link some of them in the description below so we see so many different names lucy member llc shareholder registered agent what do they all mean sometimes you come across titles being used interchangeably which adds more to the confusion so in this video we'll go over various llc roles that you need to be aware of if you are thinking to start your llc by the way in my previous videos uploaded recently we discussed loc tax benefits how you should be paying yourself as an llc owner be sure you watch those videos next if you need some help with those specific questions and let's get started there are several title designations that are specific to llcs understanding what they are and how they function in your organization is essential to successful filing if you recently set up or are considering starting an llc it is a good idea to learn the different titles given to individuals within your llc some of the titles you might choose are corporate titles designating the roles of various corporate officers in the llc for example treasurer or vice president these corporate titles can be helpful in establishing who does what in your company but they aren't required under state laws other titles are covered by your state's laws and are particularly important when it comes time for your llc to enter into contracts with other individuals or other businesses so this knowledge that i will share with you is extremely important if you do want your llc to be a successful business so first things first what is an llc member a member of a limited liability company refers to an llc owner that is anyone who has an ownership interest in the llc generally speaking unless the llc is a manager managed llc which we will discuss in a moment or unless otherwise stated in the llc operating agreement all members of an llc play an active role in the management of the company and have the authority to bind the company contractually your llc operating agreement should set out the specific powers and responsibilities of its members now let's talk about corporate officers or employees while an officer of the company or an employee may also be a member not all officers or employees are members or owners in order to be a member the officer or employee must hold an ownership interest in the llc now what is an llc manager while most llcs are member managed in some cases you will find that a manager managed llc may be the more appropriate choice in the manager managed llc the management of the company i know it is redundant the management of the company is delegated to either a third party manager or to a member or group of members who are known as managing members so when an llc is a manager managed llc members who have not been designated as managing members do not participate in the day-to-day management of the company nor do they have the authority to enter into contracts to bind the company contractually that is a very important key point that you will need to keep in mind these powers and responsibilities belong instead to the llc managers or managing members the rights and obligations of llc managers or managing members should be documented in the llc operating agreement and if you do have a group of individuals who are considered to be managing owners of your company you do want to have the operating agreement in place and you do want to have it written in a very black and white language that way there is no room for interpretation and no room for a misunderstanding or some type of an error that may cause problems down the road there are several other titles that you will run into as an llc owner these titles may not be used in your specific llc but it is a good idea to know what they are and what distinguishes them so let's talk about shareholders llcs have llc members rather than llc shareholders a shareholder is someone who holds stock or shares in a corporation at first glance a shareholder might seem very similar to an llc member or owner however you choose to call that role but in reality the two are very different while a shareholder may have voting rights this will depend on the type of shares held unlike an llc member he or she won't have a right to participate in the management of the company or have the authority to bind the company contractually now let's talk about directors the title of a director applies within the context of a corporation so if your llc is structured as a corporation you may have to have a director or somebody who will play a role of a director and will hold the title corporations are run by a board of directors who are elected by the shareholders within an llc however either members in a member manage llc or managers or managing members if there's a group of people are responsible for the management of the company rather than the board of directors and that is an important distinguishing point between directors shareholders and members who are essentially owners of the company now let's talk about the third group that you will want to know about corporate officers as an llc your company may decide to appoint corporate officers such as president vice president or treasurer to handle certain jobs or certain tasks within the company these corporate titles can be useful in designating who does what within your llc but overall management and the authority to bind the company still rests with the llc members or managing members if there's a group of individuals depending on the structure of your llc now let's chat about a sole proprietor a sole proprietor is someone who owns and operates his or her own business an llc cannot be a sole proprietorship as they are two different business structures with that said however an individual can decide to register as an llc instead of running his or her business and the sole proprietor you can also elect to be taxed as a sole proprietor essentially where all of your profits will be reported on your forum 1040 schedule c um i talked about llc taxation in a separate video so if you want to find out more make sure that you watch the video next now let's chat about a registered agent an llc registered agent is a third party usually registered in the same state in which the llc is established who has been designated to receive official government notices mail documents on the llc's behalf most states will require llcs to have a registered agent but even if one isn't required by your state there are many benefits to having a registered agent which you should consider and by the way there are many legal questions as well that may come up that you wouldn't want to handle as an
Thanks Ronald your participation is very much appreciated
- Cassaundra Clyne
About the author
I've studied collection management policy at New York City College of Technology, CUNY in Brooklyn and I am an expert in epistemology (outline). I usually feel relaxed. My previous job was government service executives I held this position for 19 years, I love talking about whittling and judo. Huge fan of Twenty One Pilots I practice archery and collect disney pin trading.
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