It is quite common for members of a recently formed LLC accustomed to a corporate governance structure (that is, one having directors, a board of directors and officers versus members and managers) to direct their attorney to draft their operating agreement so that the LLC will have a corporate governance structure too. The intention being to permit the members to continue to use the governance structure with which they are most familiar. (Some clients even enjoy holding board of directors meetings and the formalities of decision making.) Ordinarily, this is accomplished by a provision inserted into the operating agreement that states, more or less, that:
The members agree that the company shall be governed by a board of directors [or managers] (the board) acting collectively; and not by its members. The board shall be comprised of three (3) directors appointed by the members [or by the company’s managers if the company is manager-managed] designated on the attached Exhibit A. The foregoing is an express delegation to the board by the members of their individual right to manage the company including all powers and authority necessary for, ancillary to, or implied by such delegation to direct, manage and control the company’s business and affairs. The board may appoint one or more officers having such titles, rights and duties as are commonly given to them and as prescribed in Chapter 1701 of the Ohio Revised Code. . .
The Ohio Limited Liability Company Act (the Act), Revised Code Chapter 1705, …