Clients also ask:
Laws surrounding LLCs require you to name a president or CEO.
Having a designated head may help clarify the roles and duties.
As with most issues concerning the law, the “right” answer depends on the circumstances.
Although state laws vary concerning LLC formation, typically, LLC owners—also called members—may choose the kind of leadership structure they wish to employ for the business.
Your LLC is required by law to have a board of directors and named officers such as a president and treasurer.
If you have a single-member LLC, which means that you are the sole member, you can choose any title you like to signify that you are in charge.
You can name yourself the CEO and/or president.
A good practice is to choose a name that reflects the impression you want to portray for the LLC.
You may use the title while signing contracts and otherwise performing official business on behalf of the LLC.
For a multi-member LLC, you may decide that the company should have one specific person responsible for administrative decisions.
This choice may make sense for a variety of reasons. Possibly one member primarily runs the business, while others are silent members who have invested money in the venture.
No matter the reason behind the decision, you may decide to name one member as president or CEO.
Related: LLC Officer Titles Explained
A president or CEO may have various duties, from creating the final calls on tough business decisions to providing a larger, overall strategy for pushing forward the business’ goals.
Notably, a president or CEO does not have to be the one in control of daily operations, and many such leaders do not want to be. For this reason, if you are president or CEO, you may hire leaders who take care of such tasks. These managers may even be given the title of vice president.
The Importance of the Operating Agreement
If you decide on one leader, regardless of the corporate structure and titles you choose, your LLC’s operating agreement should include all information related to any member designations.
All states permit LLCs to establish a CEO or president work so long as you create the office and define it in the operating agreement.
The state must know who has the authority to sign official and legal documents on behalf of the LLC.
Aside from state filing requirements, though, it is a good idea to have individual members’ duties and responsibilities outlined in your operating agreement. In addition to being president or CEO, you may also choose to name other positions, such as treasurer, financial manager, or budget director.
Establishing this type of clarity in the business structure is smart to ensure that everyone knows and understands their roles and the expectations other members have of them.
If you’re forming an LLC, deciding on the management structure is one of the most important decisions you can make.
If you want to have someone in charge of the final say on important decisions, having a specifically named CEO or president is probably a good idea.
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