What is a managing member?

"Managing member" is a hybrid title given to someone who's both a member of a company and an elected manager of the same company. As a result, this person is more than just an employee. This management structure mainly exists in limited liability companies.

This type of active owner assumes management duties such as making key policy decisions, amending bylaws, setting salaries, maintaining the company's bank accounts, handling the LLC's transactions, creating manager committees and creating employee benefit plans. A managing member also receives a portion of the company's bottom-line profits, and that portion is subject to self-employment tax.