An LLC’s authorized representative is any person the company has empowered to act on its behalf — signing contracts, opening bank accounts, filing tax paperwork, or handling a specific transaction. It isn’t a formal title like “member” or “manager.” It’s a functional designation: this person has been given authority to bind the LLC in defined ways. Where that authority comes from, how far it reaches, and when it ends depends on the operating agreement, decisions by the members or managers, and the default rules in the LLC’s home state.
Where the Authority Comes From
Three sources create and shape the role, and the order matters.
The operating agreement is the primary source. This internal contract among the members spells out who has authority, what they can do with it, and where the limits are. A well-drafted agreement addresses signing contracts, managing bank accounts, hiring employees, and the relationship among members, managers, officers, and the LLC itself. Members are bound by its terms whether or not they physically signed it.
State law fills the gaps. When the agreement is silent, state statutes supply default rules. Many states have adopted a version of the Revised Uniform Limited Liability Company Act. Under that model act, holding a membership interest does not by itself make someone an agent of the LLC. General agency principles decide who can bind the company, the same way they govern corporations.
Member or manager resolutions handle the specifics. When the LLC needs to authorize someone for a particular transaction, or expand an existing representative’s reach, a formal resolution does the job. Resolutions commonly designate authorized signers on bank accounts, approve major contracts, or grant temporary authority for a single deal.
How the Role Differs From Other LLC Positions
People routinely confuse an authorized representative with other LLC positions. The distinctions matter because each carries different powers, obligations, and exposure.
Members and Managers
In a member-managed LLC, every member shares management and typically has authority to conduct day-to-day business. In a manager-managed LLC, designated managers run operations while the remaining members function more like passive investors. Under the model act, membership alone does not make someone an agent. An authorized representative may be a member, a manager, or neither. What counts is whether specific authority has been granted, not the size of the ownership stake.
Officers
Some LLCs appoint officers — president, treasurer, secretary — similar to a corporation. Officers derive their authority through delegation from the managers or members, and the operating agreement usually defines what each officer can do. An authorized representative might hold an officer title, or might simply be a person granted authority for a narrow purpose without any title at all.
Registered Agents
This is the most common point of confusion. A registered agent is the person or service designated to receive legal documents and official government correspondence for the LLC. The role is purely administrative. A registered agent has no authority to sign contracts, make business decisions, or bind the company. Every LLC must maintain one, but the job begins and ends with accepting service of process and forwarding mail.
How Someone Is Appointed
The process depends on the LLC’s structure and what the operating agreement requires. Most agreements set criteria for who may serve and lay out a procedure, typically a vote of members or managers. The decision should be documented in meeting minutes or a written resolution.
Some LLCs go further and file a statement of authority with the state. This public filing declares who may act for the LLC and what transactions they can handle. Under the model act, the statement can name a specific person or reference a position within the company, so a new filing isn’t required every time someone new steps into the role. The statement affects dealings with outside parties, not internal governance.
A filed statement of authority has real legal weight. For transactions other than real property transfers, a grant of authority in a filed statement is conclusive in favor of anyone who gives value in reliance on it, unless that person actually knew the authority had been revoked or limited. For real property, the statement must also be recorded in the county land records to carry the same conclusive effect.
What an Authorized Representative Actually Does
Day-to-day responsibilities track whatever authority has been granted. Common functions include:
- Signing contracts — leases, vendor agreements, customer contracts, and other binding commitments.
- Managing finances — opening and operating bank accounts, authorizing payments, applying for credit, and handling investments.
- Handling legal matters — engaging attorneys, responding to regulatory inquiries, and managing litigation.
- Filing government paperwork — state annual reports, tax elections, and licensing applications.
Scope controls everything. A representative authorized to sign contracts up to $50,000 cannot commit the LLC to a $500,000 deal. One authorized to handle banking cannot unilaterally sell company real estate. Third parties increasingly check the scope of authority before closing, and exceeding it can expose the representative personally.
How Third Parties Confirm the Authority
Banks, lenders, title companies, and sophisticated counterparties don’t take someone’s word that they can act for an LLC. They ask for documentation.
Incumbency Certificates
An incumbency certificate confirms that specific individuals currently hold positions authorizing them to act for the LLC. It typically lists names, titles, and specimen signatures of the people executing the transaction documents. For an LLC without formal officers, a manager or managing member usually signs it. These are routinely delivered at closings.
Banking Certification Forms
Banks require their own verification before granting account access. Under federal regulations, when a legal entity opens an account, the bank must obtain identifying information for the entity’s beneficial owners through a completed certification form. The person opening the account certifies that the information is accurate. Banks verify each beneficial owner’s identity using either documentary methods, like government-issued identification, or non-documentary methods, following the institution’s customer identification program.
Statements of Authority
A statement of authority filed with the secretary of state provides publicly accessible proof of who can bind the LLC. It is particularly valuable for real property transactions, where title companies want ironclad evidence that the signer has the power to convey.
Fiduciary Duties
Anyone exercising authority on behalf of an LLC owes fiduciary duties to the company and its members. Most legal trouble starts here.
The duty of loyalty requires the representative to put the LLC’s interests ahead of their own. Self-dealing, taking business opportunities that belong to the LLC, and competing with the company all violate it. Negotiating a contract on the LLC’s behalf and steering the deal to benefit yourself or a side company is a breach.
The duty of care requires informed, reasonably prudent decisions. You don’t have to be right every time, but you do have to do the work. Approving a major contract without reading it, or committing company funds to an investment you didn’t research, can breach this duty. The standard isn’t perfection; it’s what a reasonable person in a similar position would do with the information available.
Most states also impose a duty of good faith and fair dealing — a baseline obligation to act honestly and not sabotage the LLC’s interests even in areas where the operating agreement gives you discretion.
Operating agreements can modify fiduciary duties to some degree. Many states allow the agreement to narrow or define them more specifically, but virtually no state lets an agreement eliminate them entirely. The duty of good faith and fair dealing is almost universally non-waivable.
Personal Liability
The whole point of an LLC is to shield members from personal liability for business debts. An authorized representative can lose that protection in a few predictable ways.
Acting outside your authority is the most direct path. If the operating agreement limits your signing authority to contracts under a certain amount and you exceed it, the LLC may not be bound, and you could be personally on the hook. Third parties who relied on your apparent authority may have a claim against you directly.
Breaching fiduciary duties opens another door. A representative who engages in self-dealing, makes grossly negligent decisions, or commits fraud can be held personally liable for the resulting damages. Members can bring a derivative action on the LLC’s behalf to recover them, with any recovery going to the company rather than the member.
Many operating agreements include indemnification clauses that protect representatives who act in good faith within the scope of their authority. Under the model act framework, an LLC must reimburse and indemnify a manager or member-manager for debts and liabilities incurred while acting on the company’s behalf, provided the person complied with their fiduciary duties. Indemnification does not cover fraud, willful misconduct, or knowing violations of law. It catches honest mistakes and lets deliberate wrongdoing through.
The IRS Responsible Party Is a Separate Concept
The IRS has its own idea of who speaks for an LLC, and it doesn’t always match the operating agreement’s designations. Every LLC that applies for an Employer Identification Number must name a responsible party, defined by the IRS as someone who owns, controls, or exercises effective control over the entity and directly or indirectly manages its funds and assets. The responsible party must be an individual, not another entity. For a multi-member LLC, this is typically a managing member or someone with similar authority. A nominee — someone with only limited authority during formation — cannot apply for an EIN.
When the responsible party changes, the LLC must report the change to the IRS within 60 days by filing Form 8822-B. Missing this deadline is a common failure, especially when management transitions happen informally.
An LLC can also authorize someone to deal with the IRS directly by filing Form 2848, a power of attorney for tax matters. Who signs that form depends on how the LLC is taxed.
Removal
Removing an authorized representative generally means following the operating agreement’s procedures. Common grounds include breach of fiduciary duty, failure to perform, or conduct that harms the LLC. Removal usually happens through a formal vote by members or managers, documented in a written resolution.
If the operating agreement is silent, state default rules apply. These vary but generally allow members holding a majority interest to remove a manager or officer. Some states require notice to the person being removed and an opportunity to be heard; others don’t.
Once a representative is out, the LLC should immediately update any filed statements of authority so the former representative cannot continue to bind the company through the public filing. If the person was the responsible party for IRS purposes, Form 8822-B must be filed within 60 days of the change. Loose ends are how removed representatives keep causing problems long after their internal authority has ended.