Choosing LLC names for your limited liability company (LLC) is not necessary by law, but it is something to think about when defining responsibilities in your organisation.
This document defines an LLC title, provides several examples, and discusses factors to consider when selecting a term.
Table of Contents
What Is the Name of a Limited Liability Company?
An LLC title is a designation that appears on all business papers filed with the state, including contracts and agreements between LLC members. It refers to the titles held by both management and lower-level personnel, including but not limited to:
CEO, CFO, Director, and Project Manager
Why Are Limited Liability Company Names Used?
There are several reasons why limited liability business names are used. Every business has a management hierarchy that assigns certain duties to specific individuals. Here are some more advantages of utilising titles.
The following are some of the advantages of utilising limited liability company titles:
It aids in distinguishing the owners’ functions.
It aids in clarifying the amount of responsibility and authority.
When there is a doubt, it aids in determining who is in authority.
Assists LLC members in determining who to contact with problems or queries.
What Do You Call an LLC Owner?
In many circumstances, the owner of an LLC is referred to as a member. A member might be a company, partnership, trust, estate, or another sort of organisation rather than a person.
What Constitutes an LLC Member?
Members of an LLC are individuals who possess shares in the company. Members often earn dividends depending on the LLC’s profitability.
When a person joins an LLC, he or she is referred to as a general partner. The board of directors is made up of general partners who oversee the day-to-day activities of the LLC.
Certain conditions must be met in order to become a member of an LLC. You must, for example, show confirmation of identification and residence. You must also fill out a membership application, which includes information about yourself and your company.
Before signing any agreement pertaining to your LLC, you should always contact with a lawyer.
Structures of LLC Management
When forming an LLC, you may choose between two management structures: member-managed and manager-managed.
Member-Managed Limited Liability Companies
The owners of a member-managed LLC, also known as a “member-manager,” handle the day-to-day operations of the firm. The members of a member-managed LLC will recruit personnel and make business choices.
LLC controlling members are also individually accountable for any obligations incurred by the firm and are responsible for paying taxes on its behalf. As a result, it is essential to get legal or tax counsel from a reputable law firm that specialises in corporate law. In addition, an LLC managing member is normally required to get tax counsel from a CPA (Certified Public Accountant). Legal or tax assistance often requires competence trained in state law and capable of providing legal counsel to new members.
An annual report offers both financial and legal information to assist LLC members in ensuring liability protection. A single-member LLC has just one member who manages the firm.
Manager-Managed Limited Liability Companies
A manager controls the LLC’s everyday operations in a manager-managed LLC. They recruit people and make choices on how the firm should be operated.
External and internal managers are the two categories of LLC management. External managers are hired by the owner to assist them in running the firm. Internal managers are individuals who work inside the company and are generally members of the executive team.
Manager-Managed vs. Member-Managed LLCs
Both member-managed and manager-managed LLCs have advantages and drawbacks, so the optimal one will depend on the size, budget, and aims of the LLC.
The members of a member-managed LLC have power over the company’s management. Because of its ease of formation, flexibility, and cheap cost, smaller LLCs may find this structure more advantageous.
Manager-managed LLCs, on the other hand, may be better suited for bigger businesses with a large number of owners and investors. However, manager-managed structures are more difficult to establish and, if a professional manager is used, more expensive.
LLC Title Examples
While it is not obligatory for LLCs to assign titles to its members, they may do so in their operating agreements if they so want.
Officer positions are the most popular LLC titles. The president, vice president, secretary, and treasurer are the LLC officials in charge of the company’s day-to-day activities.
The firm is administered by the executives of the LLC. Hiring personnel, paying bills, maintaining records, and ensuring that everything goes properly are all important duties. Officers are also in charge of legal concerns, such as contract preparation, insurance purchases, and dealing with debtors.
The following are the most frequent LLC officer titles and their customary duties:
Chief Executive Official (CEO): The CEO is generally the highest-ranking officer in a company. They are in charge of determining the overall direction and strategy for the firm, and their main purpose is to maximise profit.
Presidents are in charge of making significant choices for the organisation. They are also in charge of day-to-day operations and have the last word on all major decisions.
A vice president often monitors workers’ work and is generally engaged in the day-to-day operations of the organisation.
Secretaries are responsible for keeping track of all official papers and conducting regular communication.
Assistant Secretary: An assistant secretary, like a secretary, conducts regular correspondence and certain administrative chores.
Manager: The manager is in charge of recruiting staff and overseeing the company’s day-to-day operations. They also make operational choices for the company.
Other titles you might use in an LLC are:
Chief Financial Officer: The person in charge of the company’s finances. He or she is in charge of all areas of the company’s finances.
An LLC principle is often the member having the greatest proportion of ownership in an LLC.
A registered agent is someone nominated by the corporation to accept service of process on the company’s behalf. This implies they must accept process, other legal papers, and communications on the company’s behalf. A registered agent might be a lawyer, a legal company, or a government body.
Board of Directors: A board of directors is traditionally a group of directors chosen by corporate shareholders who supervise the corporation’s operations. Although LLCs are not obliged to have a board of directors, they may choose to implement a similar management style in their operating agreement.
Consultants are specialists who are recruited to assist with certain tasks. Lawyers, accountants, and even marketers may work as consultants.
Avoiding LLC Titles
An LLC title is intended to clearly define a person’s function in the firm. With that in mind, the following titles should be avoided:
Managing Partner/General Partner: Titles including the term “partner” may signal that a corporation is a partnership rather than an LLC (Sole) Proprietor: This title, like the one before, denotes that the company is a single proprietorship.
Humorous titles: While titles like “Chief Exciting Officer” may be humorous internally, they lack credibility.
The Benefits and Drawbacks of LLC Job Titles
There are advantages and disadvantages to using LLC job titles.
Titles may assist people understand their positions in the firm. Furthermore, utilising titles other than “member” might improve intelligibility, particularly when communicating with customers.
However, if you use similar-sounding names without defining what each role involves, you risk confusing yourself, your workers, and even your customers.
How to Select an LLC Name
Choosing an LLC title that is both acceptable and simple to grasp might be difficult. Here are some pointers to get you started:
Consider the role you wish to have. If you are the only member of your LLC, a title such as “CEO” or “President” may suffice; however, if you have several owners or roles you may hold, examine your strengths and shortcomings.
Define the title’s responsibilities. This is particularly critical if you have a large number of titles to manage.
Keep an operational agreement in place. Even though LLCs are not subject to bylaws and other formalities like corporations, these titles and responsibilities should be documented in the LLC’s internal records.
Seek legal counsel. If you’re not sure how to create titles in your firm, an attorney may assist you with your operating agreement. What you discover on the internet should only be used for informative reasons.