Assistant Manager

One of the things I recommend to Single Member LLC clients is an “assistant manager” for the LLC. This option is raised in the Pre-Organization Questionnaire Letter.

An assistant manager can in certain circumstances when the single owner/member is not available provide needed stability and viability to Single Member LLC. Having an assistant manager also adds a level of sophistication to the Single Member LLC that can bolsters a defense against attempts to set aside LLC asset and liability protection.

The assistant manager has power with respect to the LLC when and to the extent described in the LLC Operating Agreement. The assistant manager has no ownership interest in the Single Member LLC. I suggest the assistant manager only be involved in the LLC upon the occurrence of 1) a request by the single member LLC owner/member, 2) physician determined mental disability of the single member LLC owner/member, or 3) the death of the single member LLC owner/member.

In each of these scenarios, the assistant manager becomes “acting” manager if, and only if, the assistant manager contemporaneously consents to become “acting” manager of the Single Member LLC. I also recommend modifying fiduciary duties and adding alternative dispute resolution in the LLC Operating Agreement to protect the “assistant manager” (see Single Member LLC Fiduciary Duties and Alternative Dispute Resolution).

When I organized "Form" LLCs I did not offer an assistant manager provision.