LLC definitions and structure

Let's learn about the players of an LLC

Registered Agent 

This is who collects the mail. You can be your own registered agent, or have a service that provides that for you. This is where important documents from your state will be sent for example Compliance Documents, so make sure it is a person/service that will be checking the mail often. PO Boxes are a no go for your Registered Agent's address.


Managers manage the day to day operations of the business along with any employees they hire. Managers can be individuals or other businesses such as an LLC or a Corporation.


A Member is an owner of the business and receive the profits the business generates. Members can also be individuals or other businesses. They can elect Managers and vote on major decisions, but otherwise do not play a role in the day to day operations of the LLC.

Can someone be both?

One person or business can be the sole Manager and Member, but there can also be any number of mixing and matching of Managers and Members. An LLC can have one individual Manager and another business Manager along with two individual Members and one business Member.


BetterBuilders LLC builds houses as their main business, John and Charlie are both Managers and Members of that company with 50/50 ownership. Sometimes they build spec homes where they invest 100% in a project where others, they take outside investment from people or businesses. To make things easy and also remove liability from BetterBuilders, they form an LLC for each home they build. BetterBuilders is about to build two new houses, John is going to oversee one while Charlie the other, they create 325 Riverdale LLC and 5962 Falcon LLC with the following structure:

325 Riverdale LLC


  1. BetterBuilders LLC
  2. Charlie Smith


  1. BetterBuilders LLC - 100% ownership - $300,000 investment

5962 Falcon LLC


  1. BetterBuilders LLC
  2. John Sno


  1. BetterBuilders LLC - 25% ownership - $0 investment
  2. Outside Investment Inc. - 50% ownership - $200,000 investment
  3. Sally Jane - 25% ownership - $100,000 investment

As you can see above, both LLCs have individuals and companies managing and owning each. 325 Riverdale LLC is wholly owned by BetterBuilders LLC, while being managed by both BetterBuilders LLC and Charlie individually since he is overseeing that project. 

5962 Falcon LLC is a bit more complicated. We still have BetterBuilders LLC and John as an individual running this project, but we have three owners this time. BetterBuilders LLC is earning 25% ownership in the business without any physical investment because they're providing a major discount on their labor. Outside Investment Inc is getting 50% ownership because they're putting in 2/3ds of the capital whereas Sally Jane invests in real estate as an individual and put $100k into this project.

*BetterLegal's LLC Multi-Member form supports up to 3 Managers and 5 Members

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