Phil, Stu, Alan, and Doug want start a fish farming business in Georgia. They plan to operate the business on land owned by Phil's Uncle Sid. Uncle Sid will act as the manager of the fish farm because of his life-long experience in the business. Phil will contribute $200,000 capital to start the business. Stu, Alan, and Doug will each contribute $50,000.
They have already determined that they want to operate as a limited liability corporation. They approach you for advice on whether they should operate as a member-managed LLC or a manager-managed LLC. Explain the distinctions between the member-managed LLC and the manager-managed LLC. Present your recommendation for the structure they should use. Include the rationale for your determination supported by concepts from your textbook.