Defining the Role of a Member in Different Business Structures
A member is a natural or legal person who is part of the governing body of a business. Depending on the type of organization, a member may be an individual shareholder, a partner, a limited liability company (LLC) member, or a board member. The members of a business are responsible for the decisions taken and the liabilities assumed by the business.
The rights and responsibilities of members vary across different business structures. Generally speaking, members are liable for the obligations and debts of their business. In addition, members have the right to a share in the business’s profits and can influence the decision-making process.
Responsibilities and Liabilities of Members
It is important for members to understand their roles and the responsibilities they must fulfill. The most important responsibility of a member is to act in the best interests of the business. Members are expected to take into account the legal and administrative considerations while making decisions, which should also be in accord with the goals and objectives of the business.
Members are also responsible for the liabilities of their business and may be held personally liable in certain cases. In an LLC, for example, members are not generally personally liable for debts and obligations of the business, but they may be held responsible in cases where the LLC has engaged in wrongful or illegal activities.
The Process of Becoming a Member in a Business
The process of becoming a member varies depending on the type of business. In a partnership, for instance, potential members must work out the details of their membership and sign a partnership agreement. In an LLC, members may join through a written operating agreement. They may also submit or file documents, such as Articles of Incorporation for a corporation, to become a member.
For corporations, the process of becoming a member usually involves submitting the required documents to the appropriate government agency, such as the state secretary or department of commerce. Additionally, members of a business may also be required to pay fees in order to become a member.