LLC with outside management

If LLC were to higher a management team to run the operations of LLC, say an Operations Manager, Treasurer/book keeper, Attorney(s) and a Secretary, they would be paid as employees of LLC or what if this team was hired, under a contract to execute day to day operations of LLC?

Members would be solely responsible for upfront contributions and then collecting monthly member allocations?

What would members have to do, other than put up the initial contributions?

I’m just thinking out loud…

no one can tell you how to pay your employees or contractors. Many management companies operate for a % of the monthly rent. whatever works.

some form of agreement or contract would be advised, that details specifically how the compensation is based, rights, duties, obligations, authority, etc.

how hands off can members be when it comes to managing the business operations of LLC?

another words, let’s say 20 members contribute 10k

their op fund is 200k

in the op agreement - it states that members will hire a management team to run the business.

the op agreement would provide a specific dissolution date - say 10 years, upon which any assets (business itself) would be sold.

basically, in the op agreement it would spell out that members will not have to run anything or do anything, other than have an annual meeting and meet any other obligations of the state as an LLC.

how hands off can it be?

what are the factors that might impact the LLC for members to take a more active role in the LLC and what could be put in the op agreement that restricts member meddling?


as hands off as you want it. the management agreement will say what you want it to say. no one tells you how to run the business except the owners, who can change their minds at any time.


Would it be best that your operating agreement simply state the limitation of your liability in regards to personal attachment to the LLC and the general structure of the company? Nothing to do with your actual operating procedures?

Your internal operating procedures are governed seperate and when using a third party your contract with that company is totally seperate.

It seems that there is confusion between a companies operating agreement and an operating agreement/contract with a 3rd party company and/or contractor.

at a minimum you should have an operating agreement with the LLC granting you authority to act on behalf of the entity (eg “president”), general governance, allocations and distributions of profits, transfers of membership (incl upon death, etc), and probably a few other things I could think of.

If you are acting as manager, you’d also include management rights, responsiblities, fudiciary duties, etc.

if you have a TPM, then that seperate agreement would include their rights, responsibilities, etc.