From Advising the Small Business: Forms and Advice for the Legal Practitioner, Second Edition, Chapter 7.
7.1 What Is the Basic Structure of a Limited Liability Company?
The owners of the LLC are the “members” as defined in your state’s Limited Liability Company Act (the “Act”). The LLC may be managed by its members, or it may be managed by one or more managers elected by the members (the “managers”). The governing agreement for the LLC is called an “Operating Agreement” or “LLC Agreement.” In a member-managed LLC, each member has the power to bind the LLC. However, in a manager-managed LLC, no member has the power to bind the LLC (just as no shareholder of a corporation can bind the corporation); only a manager or authorized officer of the LLC can bind the manager-managed LLC.