Delegate LLC management authority with a usable record of its limits

Retrieve the LLC agreement and the appointment record for the person proposing to delegate authority. Identify whether the company is managed by members, managers or a combination established by the agreement. A title in an email signature does not show which powers that person holds.

Delaware section 18-402 makes the LLC agreement central to management and authority. Section 18-407 permits delegation subject to the agreement and addresses the relationship between delegation and the delegator's continuing role. Ask counsel to confirm that the proposed grant is within the person's powers and follows the required approval process.

Tell counsel what the delegate must do: execute specified contracts, supervise a defined operation or approve a stated category of decisions. Identify financial or duration limits, excluded matters and actions requiring another approval. A general instruction to help manage the business leaves colleagues uncertain about which signatures they can accept.

Specify whether authority applies to one transaction or a continuing category. If it depends on another person's approval, describe the evidence the delegate must obtain. Keep commercial limits consistent with the systems and workflows the delegate will use so the company can administer the written grant.

Ask counsel to state when the delegation begins, when it ends and how it may be changed or revoked. Section 18-407 includes rules concerning delegations stated to be irrevocable, subject to the LLC agreement. Do not use an irrevocable template casually for a temporary operational assignment.

Record what happens when the delegating manager or the delegate changes roles. The agreement may require specific treatment. Identify who maintains the authority register and who must receive a revocation or replacement instruction, including external recipients that previously relied on the delegation.

Delaware's delegation provision states, subject to the LLC agreement, that delegation does not itself make the delegate a member or manager or end the delegator's existing role. Keep those statuses separate in the company record. An outside operator authorized to perform a task should not be added to the ownership schedule merely because they can sign a specified agreement.

If the company also intends to appoint an officer or admit a member, have counsel prepare that separate action. Give counterparties the authority evidence relevant to their transaction without disclosing unrelated ownership or internal material.

Keep the executed delegation, approvals and any amendments in the authority register. For significant actions taken under it, retain a reference to the grant and the evidence that its conditions were met. Escalate a proposed action outside the scope before the delegate signs.

When the delegation ends, update active instructions and preserve the historical record for transactions completed during its term. The company should be able to answer both who may act today and what authority supported a particular earlier action.