Management refers to the process of planning, organizing, leading, and controlling resources and activities within an organization to achieve its goals and objectives efficiently and effectively.
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Last Updated: February 23, 2026
A business has owners and managers. In many cases, these people are one and the same. Who the company managers are and how they interact with the owners and the public can make or break a business.
If an entrepreneur is starting a limited liability company (LLC) or corporation, the process of choosing managers can be a very formal one shaped by detailed business agreements. This guide explores management for LLCs and corporations, including what management means, how managers interact with owners in each structure, and more.
An LLC’s or corporation’s management, by definition, is responsible for making day-to-day decisions to run the business, such as:
Business managers also normally have access to the business’s accounts.
Related: Micromanagement: Necessary evil or just plain evil?
The owners of LLCs are called members. Members can manage their own LLC, or they can hire non-members to handle the management of their company. A member-managed LLC is often the default.
Some states require new LLCs to list whether the business will be member-managed or manager-managed on the company formation documents. Business owners would be wise to double-check their state’s requirements before filing formation documents.
Whether a company chooses to have its members run the LLC or hire other managers to do so, it’s important for the company to lay down ground rules for its management team. Many LLC members write their business management rules in their LLC’s Operating Agreement. In an Operating Agreement, the company can lay out rules about:
If a business doesn’t create its own terms for these rules in a customized operating agreement, the business will have to follow its state’s default management rules. The state’s default rules are rarely ideal because they weren’t written specifically for one business.
ZenBusiness offers a helpful Operating Agreement Template for entrepreneurs who need help drafting their own agreement.
Corporations choose boards of directors and corporate officers when they form. The directors and officers are often the ones to handle the daily operations of a corporation. Corporations can also hire employees who aren’t officers or directors to manage the business. A corporation’s managers can be owners (also called shareholders), or they can be non-owner employees.
A newly-formed corporation will need to adopt bylaws after the company is formed. Bylaws dictate how a company is run and managed, who runs it, and more.
Whether a business owner chooses to have owners or non-owners manage their business depends on their specific needs. Non-owner management benefits can include:
The impact of these advantages also depends on whether the business operates as an LLC or a corporation.
If an LLC’s management structure isn’t working out, it can be much harder to get rid of a manager who is also a member than to fire a manager who has no ownership rights. And with corporations, ownership can change so frequently that it’s often easier to have management that doesn’t also own the business.
Whether the company is an LLC or a corporation, good delegation is also key to running the business well. Business owners might find it easier to have others handle daily operations while they grow the business and protect their interests.
A potential disadvantage of non-owners running a business is that they’re typically not as invested in the business’s success as the owner would be. It can also be hard to find managers who work well with ownership to achieve business goals.
In short, the management structure that works best for a particular business won’t match the management structure for another company; good management is business-specific since every business has its own priorities, business owners, and goals. Every company’s owners will need to work together to create a management team that works for the business.
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An operating agreement template isn’t the only way ZenBusiness can help new entrepreneurs. The brand’s business formation services make it easy to start an LLC or corporation quickly and easily. Once the business is up and running, Worry-Free Compliance Service can help keep that company compliant, making business ownership easier for everyone.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
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