Each Texas LLC must elect to be member-managed or manager-managed in its certificate of formation. Then the LLC's company agreement generally determines if the company may or may not have officers representing the company and how the management rights will be allocated among the officers (if any), managers (if any), and members. The benefits of this flexibility are easy to see: the LLC can choose to slice-and-dice the management and control functions of the company in any number of ways that suit its interests. For example:
- officer(s) might be responsible for day-to-day management of the company in the ordinary course;
- manager(s) approval might be required for more substantial matters, such as taking out a loan or entering into a material contract; and
- member(s) approval might be required for major decisions, such as entering into a merger, accepting a new member, or amending the company agreement.