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  • Wendi Gundersen

Does my LLC need a board of directors?



When helping clients form businesses, many ask whether they need a board of directors for their limited liability company.

The answer—strictly speaking—is no.

How you end up running the LLC is really up to you and your fellow members. Within certain limits—depending on what state you are in—freedom of contract is the principle that governs.

In California, for example, the LLC could be managed by all the members, or it could be run by one or more managers who may or may not be members. The operating agreement could also require that certain decisions or actions can only occur upon the vote of a third-party who is not a member or manager.

If you want something similar to a board of directors, you could have a board of managers. But you are not required to have that.

Alternatively, if you'd like the advice of business leaders, but don't want them to have a final say, you could have a board of advisers. Their job could be to give advice to the members or managers, without being binding.

Working with an attorney in the company formation process can help you navigate these important strategic decisions about how to set up the management of your company.


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