Filing Certificate of Formation for a LLC.

I am planning on filing a Certificate of Formation (COF) which will have one Member and one Manager. I will be the Member and my brother will be the Manager of the entity, hence it will be a Manager managed entity. I was curious to know if I should mention that I am the Member of the LLC in the Supplemental Provisions/Information area of COF; or the Company's Operating Agreement and other internal documents would suffice the need for me being Member of the entity. Please advise. Thank you.

Dallas, TX -

Attorney Answers (3)

Samuel Watson Eastman

Samuel Watson Eastman

Business Attorney - Austin, TX
Answered

In a manager-managed LLC, only the manager(s) need to be listed in the Certificate of Formation, and the member(s) must only be indicated in the LLC's internal documents, including the company agreement (in TX, an operating agreement is called a company agreement). You may indicate the member(s) in the supplemental provisions if you choose, however, this would be atypical. Just to confirm, do you intend on the company to be owned entirely by yourself and managed entirely by your brother? I ask only because in the situation you have described would make the LLC owned entirely by yourself, and managed entirely by your brother. Please note that you may be both a manager and a member in the company, so if joint ownership or joint management is desired, you should name yourself and brother as joint managers and/or members, as desired.

While you are obviously free to file the Certificate of Formation by yourself, if you are not familiar with the process, you should seek the guidance of an attorney, as it shouldn't cost very much to do so. In addition, you will need a company agreement, which is typically much better to have an attorney draft than on your own. These are rather simple tasks for an attorney experienced in these matters, but can be difficult and lead to negative consequences if you are not familiar with doing so. Best of luck with your new business.

This advice is for INFORMATIONAL PURPOSES only and should not be relied upon as legal advice.
Robert Neil Newton

Robert Neil Newton

Business Attorney - Frisco, TX
Answered

The Operating Agreement alone will suffice. However, there's no statutory reason you can't be both manager and member. Unless your brother really will be a manager getting paid, it seems odd. If your looking to just avoid being the manager, there are other ways to accomplish the task without putting your brother at risk.

Contact an attorney to review your options.

The above statements are provided as general information and not intended as legal advice. Each matter has its own... more
John Alvin Hay III

John Alvin Hay III

Business Attorney - Austin, TX
Answered

Only the manager is required to be listed, but it is very important that you take the time and resources to get the company operating agreement, resolution and other items completed by an attorney to be sure you are operating within the full spectrum of the business and organizations code in Texas. Small expense and will help in the future with any needs of the LLC.

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