What is the Owner of an LLC Called?
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The business world can be confusing, especially if you have just entered it by opening your own LLC. The good news is, navigating the world of owning an LLC can be easy as long as you know what to call yourself and others involved in your LLC.
Read on to learn more about what the owner of an LLC is called, as well as more helpful information for opening your first LLC.
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What is the Owner of an LLC Called?
The owner of an LLC is called a variety of different things depending on the setup of the LLC. This means there is no universal title for the owner of an LLC.
If your LLC is just you, meaning you don’t share ownership of the LLC with anyone else, you are what is known as a Sole Proprietor. Typically, when this is the case, you don’t pay yourself a salary, and the income of the business is the same as your own income. You are responsible for all aspects of running the LLC.
If your LLC has multiple people involved, then you are referred to as a Partner. Partners share the tax burden of having an LLC, and the losses and profits are generally split equally unless otherwise outlined in the operating papers of the business. Partners are often actively involved in the LLC.
If your LLC has partners, one of these must be designated as the Member Manager, or the individual who makes the overall decisions on behalf of your LLC. If you don’t choose one when you outline your operating agreement, the IRS will designate all of the Partners in your LLC as member managers.
Now, there are some other ways people could be involved in an LLC. For example, your LLC could have Passive Members, which are individuals who invested in your LLC but then don’t get a say in the direction your company goes in the future. Angel investors or parents who contribute to their children’s businesses are typically passive members. Passive members receive profits but don’t pay the same self-employment taxes as the other members of the LLC do.
While these are the official titles of LLC owners/members, you can feel free to give yourself another title. For example, if you are in an LLC as a Partner, but all of the partners are passive members, you can feel free to call yourself CEO.
If your business has multiple active partners, however, you may have to split the roles into CEO, Co-CEO, CFO, and maybe even Vice CEO, depending on how many partners you have. This is something that should be outlined prior to forming your LLC.
How to Title an Owner of an LLC
As mentioned above, you can title yourself any way you want when you have an LLC, as long as the other members agree. This means if you want to be the “Big Kahuna,” you can definitely call yourself that.
It is not advised to make up funny or nonsensical names like the “Big Kahuna”, however, as this can confuse people wanting to hire your company as well as scare away potential business. Instead of making up a funny name, you should stick to titles that are socially accepted and dictate your job description.
For example, your company should have a CEO. If you have multiple partners in your LLC, divide up the job of CEO. If there are three of you, make one CEO, one CFO, and the third Vice CEO or Director, ensuring that everyone performs the tasks of the title they are given.
If your business has multiple facets, for example, Joe’s Ship Building and Repair, you can have one partner be the CEO of Ship Building, and another be the CEO of Ship Repair. Then you can put these titles on your website, and people can contact the exact individual they need to talk to.
Remember, your business operating documents give all of the Partners their share of the business. This means that even though one of you may be the CEO, another Co-CEO, and a third CFO, you may all share the exact same controlling interest in the business. The titles do not dictate the individual’s share of the business, only what they may do on day-to-day operations.
Your website should list all members of the LLC, including any passive members. LLC ownership is made public, and if an individual googles your LLC, they will come up with a list of the owners, even if one is your grandfather, that simply made an initial investment and is a passive member.
Listing all members, including passive ones, on your website will cut back on any confusion when someone wishes to hire your company for a job. This way, they can look and see who is active versus passive and the name of the exact person they need to contact.
Here are some titles you can consider as the sole owner of your LLC:
- Business Owner
- Sole Proprietor
Here are some titles you can consider when you are a Partner of an LLC:
- Business Partner
- Co-Managing Member
- Managing Member
- Board Member
- Controlling Partner
Obviously, there are many more, these are just to help you get an idea. You can title your LLC owner anything you want as long as it isn’t one of the titles outlined in the section below. Just know that the IRS will refer to you by the official title of partner, sole proprietor, or passive member for tax purposes.
LLC Owner Titles to Avoid
In this day and age, titles like CEO can sound a little bit scary, especially as more and more articles about corporate greed circulate on social media. But no matter what name you come up with, there are several which are better off avoided when you are naming yourself as the owner of an LLC.
This is just confusing because it is the merging of two official terms. Anyone who knows business lingo will be confused. Choose either Partner, or Managing Member, but not this odd combination of both of the titles.
Some people who are Sole Proprietors decide to put ..Proprietor” on their business card in order not to let others know that they are the sole owner of their business. This trick is well known, however, and you aren’t fooling anyone. Either put Sole Proprietor or CEO or something similar, not this cop-out of a title.
While it may be funny to have an inside joke as your title when your business first begins, if it really takes off, it will be awkward to explain to other people later. For example, “girl boss” is not an appropriate title.
It is also good to avoid culturally inappropriate titles like Big Kahuna (the Hawaiian name for chief), as these can be confusing if your business expands beyond local markets.
Titles that Don’t Apply to Your Job
Because you are the owner of the LLC, you may want to call yourself CEO. But if you have two lesser partners that do all the work (and, frankly, make all the decisions), then it is better to call yourself a shareholder or investor.
If you take the title CEO when you are not intending to be involved in the job on a daily basis, you could find yourself being called by potential customers, solicitors, and other individuals simply because they need to speak to the actual CEO. To avoid confusion, it is best to take the name of the job you truly intend to perform, whatever it may be.
Other Things to Know About Naming LLC Members
Anyone that is involved in your LLC should be given a title. Even if they don’t have any controlling interest in the business, if their name is on your LLC paperwork, they get a title. This title could be something simple like “member” or “shareholder.”
Remember that the titles you give people in your LLC do not dictate the power that they have to control the interests of the business and that you should take the time to iron out these details before you incorporate your LLC. A Registered Agent is an individual who can help with the paperwork of an LLC that does not appear on the LLC documents.
Final Thoughts on What the Owner of an LLC is Called
Overall, the owner of an LLC can choose to be called anything they please, as long as it is not the wrong title or one which will confuse potential customers. You should take the time to think out what the titles of you and all your partners will be before you turn in the operating documents. This way, you can have an idea of what role all of the members will plan in advance.
One final word of advice is to remember that titles don’t give power, but rather the operating agreement put in place by the LLC is what gives power over the LLC.
Reference Legal Explanations
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"What is the Owner of an LLC Called?". Legal Explanations. Accessed on November 24, 2022. https://legal-explanations.com/blog/what-is-the-owner-of-an-llc-called/.
"What is the Owner of an LLC Called?". Legal Explanations, https://legal-explanations.com/blog/what-is-the-owner-of-an-llc-called/. Accessed 24 November, 2022
What is the Owner of an LLC Called?. Legal Explanations. Retrieved from https://legal-explanations.com/blog/what-is-the-owner-of-an-llc-called/.