An Indiana LLC can be managed by either their members, or by a board of managers (board of managers is the term used in Indiana – some states differ slightly).  This is something that needs to be specified in the articles of organization for the Indiana LLC, and although the articles can obviously be amended at any time to change how the Indiana LLC is managed, it is an important decision nevertheless.

A Member Managed Indiana LLC

A member managed Indiana LLC is exactly what it sounds like – an Indiana LLC with its daily business managed by its members.  This is obviously not a big deal if you have one, or even two members.  Problems arise when an Indiana LLC has multiple members.  Typically, except as otherwise spelled out in a written LLC operating agreement, all of the members will have the authority to act on behalf of the Indiana LLC (sign checks, execute agreements…etc).   This is not an ideal situation.

A Manager Managed Indiana LLC

A manager-managed Indiana LLC, on the other hand, has its daily business matters managed by a board of managers.  This would be analogous to a board of directors or even officers in a corporation. Members elect the board of managers, and become much more passive in the operation of the Indiana LLC.  Members, of course, can also serve as managers.  The flip side of this, and another advantage to having a manager managed Indiana LLC is that you can elect managers that are not members.  This can become an important factor as a company grows and may want to bring in outsiders to help manage the business affairs of the Indiana LLC.

Any Indiana LLC, regardless of whether it is managed by its members of its managers, should clearly define the authority of its members and managers in a written operating agreement executed by all the members and the Indiana LLC.