Manager-Managed LLC Operating Agreement – Free for Download
Operating agreement template for a manager managed LLC
LLCs can be managed two different ways: either manager managed or member managed.
We have provided a free manager managed LLC operating agreement template above for you to use. You can also use the free member managed LLC operating agreement if you so desire.
Download: Manager managed LLC operating agreement
Why should my LLC be manager managed?
The biggest benefit of having a manager managed LLC, is that a manager does not have to be an owner. So if someone looks up your LLC on the secretary of state website, they will more than likely see your name as either a member or manager.
In most states you will need to tell the state whether you are “member managed” or “manager managed.” You then have to list the members or managers. If you are manager managed, the odds are that you won’t have to publicly disclose the members on the articles and it won’t show up on the state secretary of state website who the members are. You could also list another LLC as the manager, to further keep your information off the public records.
Biggest reason for a manager managed LLC:
If you have silent investors or an investor that isn’t going to be a part of the day to day running of the LLC, you’ll want to be manager managed. If you’re starting an LLC, and it’s your idea, but you need 5 family members to chip in some cash to get it going, you’ll want to be the only manager, and list the 5 family members and yourself as members. That way the members (your family) won’t be in the way of you running your LLC. Members vote who is going to be the manager, so your members can always replace the manager, but as you’ll see on the operating agreement, the manager would have to be replaced by a vote of the members, formalized in writing, and signed by all the members. This creates a layer of formalities. If you and your 5 family members were all members and the LLC was member managed, you could very easily create disputes amongst yourselves. Let’s say you have an argument at Thanksgiving dinner and all of a sudden 2 of the members decide they are going to close the bank account… If you were member managed, they could do so, but if you’re manager managed, they would have to go through the manager, or have to vote someone else into a manager role, or replace you as the manager to make such a change.
There should almost always be a manager if multiple people are involved in the funding of your LLC.
What’s the difference with a manager managed LLC operating agreement?
The biggest difference with your manager managed LLC operating agreement should be the added complexity of how the members will stay out of the managers operational duties. The members still need strict guidelines as to how the membership percentages will be given, how the LLC will breakup, and how the members could buy each other out. But with a manager managed LLC operating agreement, the point is to give the authority only to a manager to run the LLC.
Still confused? You can quickly read through all the different LLC operating agreement templates we have in your free online account. There’s the llc operating agreement. Here’s the bottom line, though:
For LLCs with multiple owners, where one of the owners doesn’t work at the LLC: manager managed LLC operating agreement.
Multiple owners who will both work in the day-to-day operations of the business: multiple member managed operating agreement.
Single member (one owner) LLC: single member LLC operating agreement.
Multiple members and you think you’re invincible: don’t even worry about the LLC operating agreement. Hopefully nothing will ever go wrong in your life and you’ll never need it! But we recommend you think twice before selecting this option, especially since our operating agreements are free.
More LLC Forms:
Articles of Organization
EINs for LLCs
LLC Bank Accounts
LLC Membership Certificate
LLC Capital Contribution
LLC Annual Minutes