Job titles and other formalities are the last things on your mind when you’re first starting out and expanding your firm. You might be the CEO, sales manager, and IT support all rolled into one, in fact.
Read More: Eli Bronfman pictures
It makes sensible to begin formalizing your company’s ownership, management, and legal structures as it expands. Should you decide to form an LLC or partnership, you must comprehend the responsibilities of a managing partner.
In an LLC, what is a managing partner?
A corporate structure that is legally separate from the owner or owners of the company is called an LLC. Put another way, the personal assets of the owners of an LLC are not in jeopardy if the LLC is sued or files for bankruptcy.
Because of this, it differs from other business forms like sole proprietorships, which have a single owner who is not legally separate from their company (this is the case for the majority of freelancers). It differs from a company (like Microsoft or Dominos) as well, as the latter has a separate tax system and management structure.
Members of an LLC are its proprietors, and they may be either private citizens or commercial entities. One or more members of an LLC oversee the company. An alternative is to employ a management who is not a member to run the company. We refer to this type of structure as a manager-managed LLC.
An LLC’s members are occasionally referred to as partners. A member and manager of the company is what is meant by the term “managing partner.” They are in charge of carrying out long-term plans and daily operations.
The managing partner of SalesGlobe, a business consulting firm, is Mark Donnolo. Donnolo takes the lead in the LLC, which has a few other partners who are also interested in the firm. He states, “A managing partner is, in my opinion, the first among equals.” “That person is the one strategically leading the charge.”
A company may occasionally have many managing partners. Signify Digital is a digital marketing agency that was co-founded by Beth Hellowell and Nathan Palmer. The agency is a limited company, which is comparable to an LLC in the US in terms of commercial structure in the UK. Palmer and Hellowell both hold managing partner status, and they evenly split managerial and decision-making duties.
Managing joint venture partners
Similar to an LLC, a partnership is a type of company structure. There are several kinds of partnerships, each with its own set of legal ramifications, but in all of them, it is customary for one of the partners to be chosen as the managing partner and take over day-to-day control of the company.
Other partners may not be involved in the day-to-day operations of the company and instead contribute funds, or they may be actively involved but assume a less strategic leadership position than the managing partner.
CEO versus managing partner
Both a chief executive officer (CEO) and a managing partner are top executives with leadership responsibilities. They are often the most senior employee in the company. However, the two are not exactly the same.
Business structure: Only partnerships or LLCs have the managing partner position. Although hiring a CEO is mandated by law for corporations, organizations with different organizational structures are free to choose to do so.
Ownership: A CEO may or may not hold stock in the company, whereas a managing partner is always an owner.
CEO dismissal: A managing partner’s departure from the partnership will follow the procedures outlined in the partnership agreement and result in a transfer of ownership.
Reporting: Depending on the form of the company, a CEO usually answers to the owners, who may be members, partners, or shareholders, as well as the board of directors, if one exists. In the meanwhile, an executive committee consisting of a few partners or the other partners receive reports from a managing partner.
Pay: A managing partner normally receives income through profit sharing, but a CEO normally receives a salary and a performance incentive.
Instead than seeing “managing partner” as a work function with daily obligations, some see it as a legal classification that has to be entered on a government form. In that scenario, an individual may have the title of CEO on their business card in addition to being a managing partner for legal purposes. For some, the designation “managing partner” is a profession in and of itself.
Owner versus managing partner
A managing partner, as previously said, is not only an owner of the company but actively participates in its operation and serves as an executive leader. Owners are not always managing partners.
Some owners only contribute money; they don’t manage anything. While some owners hold executive positions, they are not as senior as an owner with the designation of “managing partner.”
The duties and function of managing partners
Typically, a managing partner’s duties consist of:
Methodical organizing
Taking up fundamental business issues
Money handling
Workers’ management
Communication both inside and outside the company
They could assume new positions or assign portions of their duties to others. Donnolo, for example, is heavily engaged in business development, IP development, and content production since these roles align with his abilities and expertise; however, managing partners from various backgrounds could have different priorities.
Hellowell handles business growth and customer relations at Signify Digital, while Palmer handles work delivery and marketing planning.
Hellowell said, “Having two partners suits our business well.” “Even though our goals and passions are the same, we each bring unique skill sets to the organization.”