Managers are those responsible for the overall control of a limited liability company.
The LLC has many flexibilities that make it work well for entrepreneurs. One of those flexibilities is in the way an LLC is managed. It can either be managed by its members (like a partnership, which eliminates the confusion in having members and managers who are the same) or it can be managed by Managers. Being managed by members who operate the business can be helpful as decisions can happen in real time. However, a properly set up management relationship can give a manager (or a board of managers) a lot of flexibility and power in the everyday affairs of the business.
With a manager managed LLC, you can give as much (or as little) authority as you want to an individual manager or a group of managers of the board.
In an LLC, managers are elected by the members. The Operating Agreement should outline how the managers are chosen and what happens if a Manager resigns. Managers manage the business and affairs of the LLC and exercise the LLC’s powers. Managers may either perform these responsibilities themselves or they can delegate the responsibilities to officers or employees under the direction of the managers. In this way, managers can look much like a Board of Directors in a Corporation.
Managers have a fiduciary duty to the LLC and the Members of the LLC. You can make the duty your managers owe to your LLC whatever you want it to be in the Operating Agreement. Common duties required for Managers are: the “duty of loyalty” and the “duty of care”.
It is not uncommon for some of the Members to also serve as managers. Sometimes, investors want a seat on the Board of Managers. Sometimes, using managers to make day-to-day decisions can allow members who have unequal equity to share equally in decision-making on the day-to-day aspect of running a business. Of course, all of this depends on what matters in your company.