Managed Managed LLCs vs. Member Managed LLCs-Naperville

Today's topic is the difference between a manager managed LLC and a member managed LLC. A manager managed LLC is run and operated by the managers, which are elected by the members. A member managed LLC is run and operated by the owners. This past week, I had an interesting situation. I have a client that was appointed as a manager of an LLC, which was previously owned by another person. Apparently, the LLC was sold because another contractor owed my client around $100,000. My client never hired an attorney to draft an asset sale agreement. An asset sale agreement is a written contract that distributes the assets of one business to another business. In contrasts, a stock purchase agreement purchases the stock of a business, which means that the new business owns the assets and liabilities of the old business. An asset sale agreement, means that you purchase only the assets of the old business and not the liabilities. In my client's situation, the old business owner only transferred the right to manage his LLC. My client thought that this meant that he owned the entire LLC. Thus, this is an example of why it is important to hire a qualified business attorney to assist you. In conclusion, a member managed LLC is managed by the owners or members and a managed managed LLC is owned and operated by the Managers, which are appointed by the Member(s).

Sean Robertson is a business and tax attorney that concentrates in LLC, business, and partnership law. Sean Robertson is the Principal of Robertson Law Group, LLC, which is headquarted in Naperville, Illinois, which is near Lisle, Illinois and Plainfield, Illinois along with Downers Grove, Illinois. Sean Robertson may be reached at (630) 364-2318 or (312) 498-6080.