FACTS:                    

Two friends have created an LLC and they intend to have the LLC purchase real estate.  The LLC is “member-managed” and there is no operating agreement in place.  A brokerage submits a buyer/broker agreement to the LLC with the LLC identified as the client.

ISSUE:                      

Who may sign the buyer/broker agreement on behalf of the LLC?

ANSWER:                

See discussion.

DISCUSSION:         

In a “member-managed” LLC, each member has the authority to sign documents on behalf of the LLC unless that authority is removed pursuant to a written operating agreement.  In a “manager-managed” LLC, the manager has the authority to sign documents on behalf of the LLC while the members are generally not.  In a member-managed or manager-managed LLC, the LLC may delegate signing authority to any person by written agreement.  When the LLC’s signatory executes a document, they should sign their own name and the document should reflect the signatory’s role within the LLC.  A signature block might appear as follows:

________________________________ Housebuyers, LLC By: John Doe Its: Manager