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Starting an LLC - a "dummie" question Iowa

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  • Starting an LLC - a "dummie" question Iowa

    The LLC we are looking to start is the Manger-Managed LLC because it sounds to be the best form for us. However, my partner and I are confused on one part:

    If we do manager-managed LLC than if/when we to get be larger and to the point we need to hire a non-member manager (such as a customer support manager) by what I'm understanding they would have equal say in something regarding the business that we would want only LLC-members to have a say in. Basically we don't want to get to the point where a non-member will have the same rights as a member. I hope I am making sense here. Is this something we could clarify in the Operating Agreement? or should we go with a member-manager LLC and just leave my partner and I to be the members?

    We are in the very beginning stages of making decisions about the LLC. We have not filed papers for it at all (advice on where to go for that would be awesome) We're both college students and want as little liability as possible and this seemed to be the best for us. The business we want to start is a web-hosting service -- which is all done on the internet. We plan on filing here in Iowa and I would like to just do it ourselves and not have to pay someone else to set it up for us.
    Ashley Atwood
    [email protected]

  • #2
    Iowa Manager-Managed LLC

    A manager-managed LLC does not necessarily mean that the person you hire to manage your business has to be a "manager" as that term is used in the LLC Act of your state. The two of you could continue to be the managers of the LLC and he could report to you. You can also make him the manager of the LLC but require that certain types of action require the approval of the members. Being a manager-managed LLC does not mean that the members have no rights to control key decisions.

    You can easily form an LLC. All the basic information can be found at How to Form an Iowa LLC. However, the two of you should also have an operating agreement that spells out such things as voting rights, management powers and duties, capital contributions, cash distributions, allocations of profits and losses, restrictions on transfer of the LLC interests, admitting new partners, withdrawal from the LLC, dissolution and liquidation of the LLC and many other important questions. Those are very difficult to do without the assistance of an attorney familiar with drafting operating agreements. I strongly suggest that if you are going to put much effort or money in this venture that you talk to an attorney.
    David K. Staub (
    Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.