While laws across the United States do not require LLCs to have officers, the flexible structure of LLCs allows them to have officers to manage their daily operations. In this guide, we will look into the kind of officers that an LLC can employ and their duties and rights.
INTRODUCTION TO LLC OFFICERS
The members of an LLC generally hire LLC officers, and they work under the members or managers. If an LLC has a board of advisors, LLC officers will also be responsible for following what the board assigns to every officer. Furthermore, LLC members and managers can also be LLC officers themselves, and it will make the management structure of an LLC very simple.
Since there is no legal requirement to have officers within an LLC, there is no restriction on how many officers an LLC can have and how many offices one officer can hold. Even one officer can keep all the offices if outlined in an LLC’s operating agreement.
While having a board of directors, officers, and managers is mandatory for corporations, LLCs are an option, and they can very well choose not to have any of them or have all of them. The flexibility of this kind is what makes LLCs a very lucrative option for many entrepreneurs.
TYPES OF LLC OFFICERS
If an LLC appoints more than one officer, the secretary, and the president can’t be the same person; they need to be different people, and one officer can’t hold the office of the president and the secretary simultaneously.
On top of president and secretary, an LLC can choose to have the following officers for everyday operations:
- Vice president
- Assistant secretary
- Chief operating officer
- Chief technology officer
- Chief administrative officer
While these are the titles of what we can define as ‘corporate officers,’ the real power in LLCs still belongs to LLC members.
The specific role of a vice president and every other officer in an LLC is defined by the operating agreement of the LLC. Still, the general position of a vice president is to fill in for the president/CEO in meetings mainly.
An LLC can also appoint more than one president for different roles. For example, the board of an LLC can appoint two vice presidents – one for attending meetings in place of a president, and another VP can work as marketing lieu of the president. Similarly, an LLC can appoint a VP for every venture if it has multiple ventures.
Furthermore, if an LLC is small, it can assign multiple roles to a vice president. For example, a smaller LLC can use its vice president to handle roles like maintaining financial records, secretarial duties, taking meeting notes, making all kinds of information available at meetings, and sending notices of appointments to the members of the LLC board.
The role of secretaries is usually maintaining corporate records. Furthermore, an LLC can assign multiple duties to secretaries and assistant secretaries if outlined in its operating agreement. The role of the assistant secretary is to fill in for the secretary in duties and presence. However, it is a position for relatively more significant LLCs, as smaller LLCs can do without appointing an officer in such a position.
CHIEF OPERATING OFFICER
It is a slightly newer role to corporate culture and even more to LLCs. However, some bigger LLCs have adopted this position in recent times, and every LLC can use it after outlining the role and responsibilities of a COO in its operating agreement.
The chief operating officer (COO) in an LLC is a senior executive assigned the role to oversee the day-to-day operations of a limited liability company. The COO is often the second-highest officer in command of an LLC and reports directly to the chief executive officer (CEO).
CHIEF TECHNOLOGY OFFICER
As the name suggests, this role is only valid for your LLC if dealing with technology and engineering. A chief technology officer looks after the R&D of an LLC, designs policies and processes for the future use of technology to enhance the products and services.
While if your LLC is not related to the technology or does not use technology, it is a dud role, but if your LLC is about technology or can use technology to enhance the quality and quantity of products and services, you should seriously consider hiring an officer to fill this role.
A treasurer is almost part of every corporate structure, be it a corporation or an LLC. Treasurers are responsible for keeping the accounts of an LLC and managing the financial and tax information of all kinds.
Smaller LLCs often assign the role of treasurer to one of their members, but LLCs that deal with more considerable finances have to hire a treasurer. Unless there is an expert person to keep the accounts and manage financial reports, an LLC can often find itself in trouble with IRS and other tax and financial watchdogs.
CHIEF ADMINISTRATIVE OFFICER
Many LLCs appoint a chief administrative officer for working with executives to identify gaps in everyday operations. However, it is not the only job of chief administrative officers, and you can outline what else you want from your CAO in your LLC.
Usually, on top of working with executives, CAOs are responsible for drafting, reviewing, and approving the budgets of an LLC. They also design critical metrics, develop tracking methods for budgets of an LLC, and then evaluate the status reports and design solutions to improve upcoming budgets.
Some LLCs also use their chief administrative officer to develop and negotiate contracts for internal employees and third-party vendors. Since it is an executive role with a vast spectrum, only your operating agreement can accurately define the role of the CAO of your LLC.
Frequently Asked Questions
In this section, I will answer some of the frequently asked questions regarding LLC officers:
CAN A SINGLE-MEMBER LLC HAVE OFFICERS?
Since appointing officers in your LLC is not required by law, you are the sole member in a single-member LLC, and you can assume multiple roles for yourself. Furthermore, you can hire officers in your single-member LLC to manage various operations of your LLC.
CAN I BE A CEO OF AN LLC?
Yes, you can appoint yourself as a chief executive officer in your LLC or nominate someone else for the CEO role in your LLC. There is no legal limitation on the appointment of a CEO in an LLC.
WHO IS HIGHER IN AN LLC, CEO, OR OWNER?
Unless the owner/member is not the CEO themselves in an LLC, a CEO always works under the owner/owners of an LLC. The owners/members of an LLC are the highest authorities in an LLC, as they own all the capital interest in an LLC.