What's the Difference Between Members, Managers, Directors, Officers, and Shareholders?

Short Answer: LLCs and corporations have different ownership and management structures.

Why It Matters: LLCs have members and may be member-managed or manager-managed. Corporations have shareholders, directors, and officers, each with distinct responsibilities. Understanding these roles helps ensure the right people make the right decisions and avoid disputes over authority.

Common Mistakes: Confusing ownership with management; allowing unauthorized people to sign contracts; never documenting authority.

Michelle's Bottom Line: Know who owns the business, who governs it, and who runs it.

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