LLC Management Structure Options in Texas

Title: LLC Management Structure Options in Texas | Member vs. Manager-Managed

Description: Texas LLCs default to member-managed but can elect manager-managed in the Certificate of Formation. Learn your options under Tex. Bus. Org. Code § 101.051.

What are the LLC management structure options in Texas?

Texas LLCs offer two management structures: member-managed (default) or manager-managed. You designate your choice in the Certificate of Formation filed with the Texas Secretary of State (Tex. Bus. Org. Code § 101.051). In a member-managed LLC, all members have equal authority to manage and bind the company unless your operating agreement specifies otherwise. In a manager-managed LLC, designated managers—who may or may not be members—hold exclusive operational authority while members function as passive investors.

Member-Managed Structure

By default, Texas LLCs are member-managed under Chapter 101. All members have equal management rights and can act individually on behalf of the company without additional consent (Tex. Bus. Org. Code § 101.052). This structure works well for single-member LLCs or small partnerships where all owners actively participate in operations.

You must list all initial members' names and addresses in your Certificate of Formation. No separate managers are appointed—members themselves make decisions and handle day-to-day business.

Manager-Managed Structure

You can elect manager-managed status by specifying it in your Certificate of Formation (Tex. Bus. Org. Code § 101.051). This centralizes decision-making with designated managers, who may be members or outside parties. Members become passive investors with no default management authority unless the operating agreement grants specific rights.

List initial managers' names and addresses in your Certificate per § 3.005. This structure suits larger LLCs or those with passive investors who want professional management.

Operating Agreement Flexibility

While Texas doesn't require a written operating agreement (§ 101.052), one is strongly recommended. Your agreement can modify default management rules, member voting rights, and profit distribution. Under SB 29 (2025), fiduciary duties may be modified or eliminated by agreement—providing substantial flexibility beyond statutory defaults.

Formation Requirements

Your Certificate of Formation must clearly designate whether the LLC is member-managed or manager-managed. Include names and addresses of initial members (member-managed) or managers (manager-managed). File online with the Texas Secretary of State; the filing fee is $300 with standard processing in 5–7 business days.

Next Steps

Decide your structure based on ownership involvement and operational needs.
Draft an operating agreement to customize management authority and member rights.
File your Certificate of Formation with your chosen structure designation.

This is general information, not legal advice.