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To create a manager-managed SMLLC, you should complete two steps: specifically state that you're choosing a manager-management structure for your SMLLC?either in your articles of organization or your operating agreement, and. choose a manager or managers for your SMLLC.
Since you both are actively involved in operating the business, you should opt for a member-managed LLC. Member-managed LLCs are more common than manager-managed LLCs. In fact, in most states, member-managed LLCs are the default management structure.
As stated above, members don't participate in the day-to-day management of a manager-managed LLC. Instead, managers make these business decisions. It's important to note that a member can also act as a manager, just as a shareholder can be one of a corporation's directors.
When LLC members and managers owe a duty of loyalty to the LLC, that duty requires them to act in the best interests of the LLC and not in their personal interests. If your business partner is competing against your LLC, they may be violating this duty of loyalty.
The two most important titles to keep in mind within the context of an LLC are members (in a member-managed LLC) and managers/managing members (in a manager-managed LLC), as these two titles indicate who has the duties and obligations of the management of the company as well as the authority to bind the company.