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View Full Version : What is the head of an LLC called?


toadspittle
02-26-2007, 08:25 AM
For an owner-managed LLC, that is. I'm doing my second LLC now, and I have yet to come up with a good-sounding title. (I'm partial to "Overlord," but clients might balk at that.) Previously, my business partner and I were simply "Partners" or "Creative directors." But as I'm pretty well heading up the whole shebang this time through, I want something more high-falutin'. I know that "Member" is the technical term, but it sounds pretty low on the totem pole.

"CEO" and "President" have very specific meanings when applied to Corporations. Can I use either of them when referring to an LLC? Or is there some other convention? Am I stuck with a simple "Owner?" Or should I stick with the vague (at least from a hierarchical standpoint) "Creative Director?"

Gfactor
02-26-2007, 09:37 AM
Managing member is the official term. Principal works. CEO (or Chief Executive) is still ok, IMO. Ditto creative director (here you aren't using director in the sense of officers and directors). What about Fearless Leader?

Polycarp
02-26-2007, 09:44 AM
To paraphrase the old joke about where the 800-gorilla sets, whatever he wants to be called, so long as it's not misleading regarding his role in the LLC. The three I last dealt with, one had a "Manager," one a "Member," and one a "Managing Director." (The one with "Member" was one of those odd single-member LLCs permitted under some states' law.)

GomezK
02-26-2007, 09:49 AM
Managing Director

The Chao Goes Mu
02-26-2007, 10:02 AM
Managing Partner in my LLC. The two other partners are called General Partners.

toadspittle
02-26-2007, 10:10 AM
Managing Partner in my LLC. The two other partners are called General Partners.

Managing Partner. Not bad. I'll have to ruminate on that.

ZipperJJ
02-26-2007, 10:15 AM
For what it's worth, the IRS sends our tax coupons to:

Zipper's Company
Zipper's Partner, Member
123 Zipper Street
Ohio

So either at one point we signed up with the IRS naming my partner as "Member" or that is what the IRS decided he is as the 51% shareholder in our LLC.

Gfactor
02-26-2007, 10:32 AM
The principals of LLCs use many different titles -- e.g., member, manager, managing member, chief executive officer, president, partner -- some of which are not correct. As such, it can be difficult to determine who actually has the authority to enter into a contract on the LLC's behalf. http://en.wikipedia.org/wiki/Limited_liability_company

This is a legitimate problem.

So either at one point we signed up with the IRS naming my partner as "Member" or that is what the IRS decided he is as the 51% shareholder in our LLC.

You probably named him as "partner," which is a term that is not legally meaningful in the context of an LLC, although it does get used. Anyone with an ownership interest (LLCs don't have shareholders because they don't have shares like corporations) in an LLC is a member, with a few exceptions. http://delcode.state.de.us/title6/c018/index.htm

From the Ohio Revised Code:

(G) "Member" means a person whose name appears on the records of the limited liability company as the owner of a membership interest in that company.

(H) "Membership interest" means a member's share of the profits and losses of a limited liability company and the right to receive distributions from that company. http://onlinedocs.andersonpublishing.com/oh/lpExt.dll/PORC/ca35/ce99/ce9b?f=templates&fn=document-frame.htm&2.0#JD_170501

toadspittle
02-26-2007, 10:40 AM
You probably named him as "partner," which is a term that is not legally meaningful in the context of an LLC, although it does get used. Anyone with an ownership interest (LLCs don't have shareholders because they don't have shares like corporations) in an LLC is a member, with a few exceptions.


Although, for Federal tax purposes, LLC members (at least of the LLCs I've been in ) are Partners (in a Partnership ... vs. Sole Proprietorships or Corporations, which are other ways that LLCs can be classified for Federal tax purposes). Since the Feds don't quite recognize LLCs the way states do.

Humble Servant
02-26-2007, 10:43 AM
It is a bad idea to use the term "Partner" or "General Partner." An LLC provides limited liability for its members and managers which a general partnership does not provide. You do not want to muddy the waters about what type of entity you are or provide any ammunition in the event of an attempt to "pierce the corporate [LLC] veil." Such a challenge should not be successful unless you are also lax in things like LLC/personal accounts and taking actions in the LLC's name, but it is better to avoid accumulating issues.

I know lots of LLCs and corporations use the term "partners," but I say don't do it. Overlord works for me, though.

Gfactor
02-26-2007, 11:00 AM
Although, for Federal tax purposes, LLC members (at least of the LLCs I've been in ) are Partners (in a Partnership ... vs. Sole Proprietorships or Corporations, which are other ways that LLCs can be classified for Federal tax purposes). Since the Feds don't quite recognize LLCs the way states do.

It's not quite that simple:

For Federal tax purposes, an LLC business entity must file as either a corporation, partnership or sole proprietorship tax return. http://irs.gov/businesses/small/article/0,,id=137016,00.html

Some LLCs are automatically classified as corporations. Others must make an election on Form 8832. You are correct that an LLC that does not file form 8832 is taxed as a partnership, though.

If an LLC does not File Form 8832, it will be classified, for Federal tax purposes under the default rules. The default rules provide that if the LLC has at least two members and is not required to be classified as a corporation, it will automatically default as a partnership, and be required to file a partnership return. An LLC that has only a single member and is not required to be classified as a corporation will automatically default to the classification of disregarded entity. The disregarded entity files as a sole proprietorship and completes the appropriate schedules as part of the single owners Form 1040.

Yorikke
02-26-2007, 11:10 AM
My ultimate boss is "General Manager."

Joe

Cervaise
02-26-2007, 11:20 AM
Managing member is the official term.Interesting. Now if you'll excuse me for a moment, I have to go manage my member.

Billdo
02-26-2007, 05:04 PM
The general answer is the whatever the LLC agreement says the head is called.

The hallmark of US LLCs is their flexibility of organization. Most LLC statutes permit the overall governance to be vested in the members or the managers (which need not be members) or some combination of both, and neither the members nor the managers need to be individuals. They also permit the appointment of any officers and agents that the members/managers appoint in accordance with the agreements among the parties.

In practice, a small LLC will have one or more "managers" as the leading officers, and a larger one will have officers with similar titles to corporations.

But, if your fellow members (if any) prefer "overlord", there should be no problem.

FRDE
02-27-2007, 03:05 AM
I was a bit alarmed seeing members of a LLC being called 'partners'

The 'Limited' in Limited Liability is a warning that its owners and managers are not personally liable for company debts.

A partnership means that the partners are personally liable, so describing someone as a 'partner' is misleading, it is like describing them as a 'guarantor'.

Fairly recently Limited Partnerships have turned up, which strikes me as an oxymoron.

As far as titles go, when I had my software Ltd company, I called myself 'Technical Director', a guy who worked for me has a thriving company only partly involved with software and he calls himself the same.

We both found/find it rather useful as sales people tend to be a bit leery of hassling a technical geek - and those that need to know tend to catch on pretty quickly.

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