Limited liability companies come in two flavors. What’s the difference between them? It’s who is authorized to make the company’s decisions. In member-managed companies the members have this authority; in manager-managed companies the managers have it. It’s important to know which type of LLC your company is so that important decisions will be authorized by the correct people and that contracts will be signed by the people who actually have authority.
This distinction is so important that it’s one of the few pieces of information that are required to be included in every LLC’s articles of organization. But it’s often overlooked — or misunderstood — by business owners.