The 3 Important Roles in a LLC

There are 3 key players / roles in an LLC. Let's explore those key roles:

Registered Agent

Their job is to collect the mail. You can be your own registered agent, or have a service that provides that for you. This is where important documents from your state will be sent for example Compliance Documents, so make sure it is a person/service that will be checking the mail often. PO Boxes are a no go for your Registered Agent's address.

Manager

Managers manage the day to day operations of the business along with any employees they hire. Managers can be individuals or other businesses such as an LLC or a Corporation.

Member

A Member is an owner of the business and receive the profits the business generates. Members can also be individuals or other businesses. They can elect Managers and vote on major decisions, but otherwise do not play a role in the day to day operations of the LLC.

Can someone be both a Manager and a Member?

One person or business can be the sole Manager and Member, but there can also be any number of mixing and matching of Managers and Members. An LLC can have one individual Manager and another business Manager along with two individual Members and one business Member.

Example

FortitudeInvestments LLC invests and sells real estate as their main business, Fred and Kevin are both Managers and Members of that company with 50 / 50 ownership. Sometimes they rehab homes where they invest 100% in a project where others, they take outside investment from people or businesses. To make things easy and also remove liability from FortitudeInvestments, they form an LLC for each home they rehab and sell. FortitudeInvestments is about to build close on two wholesale purchases, Fred is going to oversee one while Kevin the other, they create 494 Fortdale LLC and 522 Eagle LLC with the following structure:

494 Fortdale LLC

Managers: 
  • FortitudeInvestments LLC
  • Kevin Smith
Members: 
  • FortitudeInvestments LLC - 100% ownership - $300,000 investment

522 Eagle LLC

Managers: 
  • FortitudeInvestments LLC
  • Fred James
Members:
  • FortitudeInvestments LLC - 25% ownership - $0 investment
  • Outside Investment Inc. - 50% ownership - $200,000 investment
  • Erica June - 25% ownership - $100,000 investment

As you can see above, both LLCs have individuals and companies managing and owning each.

494 Fortdale LLC is entirely owned by FortitudeInvestments LLC, while it is managed by both FortitudeInvestments LLC and Fred individually since he is overseeing that project. 


522 Eagle LLC is a bit more complicated. We still have FortitudeInvestments LLC and Kevin as an individual running this project, but we have three owners this time. FortitudeInvestments LLC is earning 25% ownership in the business without any physical investment because they're providing a major discount on their labor. Outside Investment Inc is getting 50% ownership because they're putting in 2/3rds of the capital whereas Erica June invests in real estate as an individual getting 25% ownership and put $100k into this project.

*FortitudeLegal's LLC Multi-Member form supports up to 3 Managers and 5 Members