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Written by : Donny Cerrano
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what are managers and members all right managers and members specifically relate to llcs or limited liability companies and so let's go into all the elements and how this can all shake out now disclaimer i am not your attorney i am not your cpa i'm just providing common information that you can get on the public open internet anywhere uh let's say we've got hal here and hal is the owner of abc tile llc he is the manager and he is the member a manager is an operator to the business a member is the owner of the business so manager operator of the llc member owner of the llc and hal can be both he can be the single person involved in the business and he is a manager and he is a member that's perfectly fine happens all the time why is it called a manager remember one they just call it operator and owner i don't know it just it is what it is everybody likes to make things complicated don't ask me all right so we've got hal here and like i said hal can be both the manager and the member so we're just going to put him over here and so he's both all right and so he runs a business like this for a few years and let's see things get a little bit more complicated they expand now so how is now just the member so the original operating agreement of the llc and the operating agreement is a separate thing we've got a video on that so you can check that out um but in the operating agreement uh at the beginning hal was the manager and how was the member of the llc through the operating agreement through the legal documents now he's evolving the business and he's going to take more of kind of a passive role in the business because he's been working for 10 years and he's kind of tired of it but he still wants to own the business so he brings in joe here and joe becomes the manager of the business he's now the kind of the general manager of the business and hal is just kind of sipping my ties on the beach and so now the legal documents have been altered the operating agreement has been amended and hal is the is the new member is now the sole member of the llc and joe is the sole manager of the llc that's how this evolved let's go a little further now the business expands because joe's done a great job and joe says to hal he's like hey you know i i want to expand this to you know more vans and you know more shops and whatnot um i like to bring on some investors and so hal says okay let me go and find these people so how goes and finds these investors that they provide an infusion of cash let's say they put in uh 500 000 investment and so now hal is no longer the only member of the business because he has sold some of the business for 500 000 let's just make it easy say that hal is now 50 owner of the business and these uh these investors own another 50 that they bought in for for 500 000 so that money can go directly to hal hal can basically just take that five hundred thousand dollars and and uh because he's the one selling uh uh selling his uh his ownership or that can be pumped back into the business not gonna go into that that's a whole nother thing uh but with that extra cash infusion uh joe hires tiffany and so tiffany is now helping him manage the business and so now in this case the business has expanded again it has evolved it has been amended in the docs in the legal documents and again this is why the legal documents are so important to an llc so now we have joe as a manager and tiffany as a manager there are two managers of the business and there are two members of the business hal and the investors now wait a minute there are a lot of people here how can there be multiple people but only two members well let's just say that these people created a fund called abc tile uh investment fund it's called abc tile investment fund llc and they together became members of this new llc and put in that five hundred thousand and then that llc invested in abc tile and so the abc tile investment fund acts as one member but in abc tile investment fund there can be 5 10 15 members of that business and so that shows you the hierarchy of how not only can you have multiple managers and multiple members but you can also have an individual be a manager a member or another llc or another corporation be a manager or a member so that's the long and short of it if you found this video helpful please like and subscribe if there are things that you would like us to kind of go into more detail on this topic comment below or if there's just other uh things that we haven't discussed yet in our any of our videos comment below and let us know but we're going to be creating many many more videos so please subscribe uh check that out also please check out betterlegal.com for business formation services we are the fastest most affordable in the industry and our goal is to educate as many people as we can and provide the most affordable uh and speedy services for people so again thank you for tuning in have a great day
Thanks for your comment Fredrick Plott, have a nice day.
- Donny Cerrano, Staff Member
Thanks for this interesting article
Thanks Cary your participation is very much appreciated
- Donny Cerrano
About the author
I've studied nematology at Concordia University Texas in Austin and I am an expert in type theory. I usually feel full. My previous job was marking clerk I held this position for 22 years, I love talking about paintball and rafting. Huge fan of Taylor Mills I practice jai alai and collect paper currency.
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