The business entity of choice for most small businesses in Washington these days is the LLC (limited liability company).  But, in my experience with many new small business owners, there are terms unique to LLCs that can be unfamiliar without context, only because the words are different than what you would use in the context of a corporation or partnership.  So, I’ve listed and defined several terms below you should be familiar with in the context of your LLC.

1. Member:  A Member is an owner of the LLC, like a shareholder in a corporation or a partner in a general partnership.  A Member typically has voting rights and rights to receive distributions or profits or losses.  A Member may or may not have managerial control over the day-to-day operation of the business depending on how the management of the company is structured in its governing documents–whether as a Member-Managed LLC or Manager-Managed LLC (discussed more fully below).
2. Manager:  Only Manager-Managed LLCs have a manager.  A Manager is a person or persons appointed by Members to manage the day-to-day operation of the company’s business.
3. Manager-Managed LLC:  A Manager-Managed LLC is an LLC intended to operate more like a corporation, wherein there are often many Members that are financially invested in the success of the business but not necessarily actively involved in the day-to-day operation.  That task is delegated to one or more Managers.  The role of the Manager is comparable to the role of directors and officers in a corporation, unless the managers delegate the business management to other persons as directors delegate to officers.
4. Member-Managed LLC:  A Member-Managed LLC is structured like a partnership where each Member retains authority to manage the day-to-day affairs of the Company.  The Members are all principles and agents of one another and on behalf of the LLC.
5. Operating Agreement:  An Operating Agreement is the primary governing document executed by the Members to form the LLC and sets forth the terms by which it will be managed.  For example, it contains Articles of Formation, outlines the rights of Members, and specifies whether the company will be a Manager-Manged LLC or Member-Managed.  It may also contain other provisions governing confidentiality between Members as to the business, or non-competition provisions.  Perhaps the most important provisions are those governing what would happen if the worst occurs, such as the death or divorce of a Member, or in the event a Member is compelled to sell his or her ownership interest in the LLC.  It is recommended to work closely with an attorney to make sure this Operating Agreement correctly reflects how you would like your business to be structured and managed.
6. Articles of Formation:  Articles of Formation are typically contained in the LLC’s Operating Agreement and sets for the basic provisions and information governing the LLC, such as the name of the LLC, the purpose of the business, its duration, its Registered Agent, its principle place of business, etc.  These are all topics addressed in the application to register the LLC with the Secretary of State.
7. Certificate of Formation:  Once the application to register the LLC is submitted and approved by the Secretary of State, it will issue to the LLC a Certificate of Formation formally recognizing the existence of the LLC.
8. Registered Agent:  The registered agent is a person designated by the Members as the point of contact for the public with respect to all legal paperwork, such as service of process of documents if the LLC is (heaven forbid) sued.  Often, the Members prefer the Registered Agent to be the LLC’s attorney.

It seems to me these are the most significant terms to keep in mind when forming an LLC, but certainly, if you have any other terms you would like defined, please comment and we will work to supplement this list as appropriate.