What types of ownership structure are possible for a limited liability company?
In Michigan, there are two classes of LLCs: manager-managed LLC and member-managed LLC. The organizers of the LLC elect whether the LLC is to be a member-managed LLC or a manager-managed LLC in the articles of organization. A manager-managed LLC is an LLC whose daily business operations are managed by one or more managers who are elected by the members. This type of LLC may be used in situations where there are some silent investors or partners who contribute capital to the LLC but are not interested in the daily management of the LLC, or in situation where there are several members and it would be inefficient for each member to have a say in the daily management of the LLC. A member-managed LLC is an LLC whose daily business operations are managed by the members. The daily management of this LLC is handled by the members alone. In this case, each member has an equal say in the operation of the business unless the members agree otherwise (such an agreement would typically be outlined in an operating agreement). A member-managed LLC is usually selected in situations where there are a small number of members.