How to Determine Who Is an Officer or Principal of a Corporation or LLC

bizfluent article image

Darrin Klimek/Digital Vision/Getty Images

Within a corporation or LLC, there can be so many roles and titles that it gets confusing as to which person is in charge of what. While the corporation’s founding documentation is meant to spell this out, anyone looking in from the outside may not be able to figure out the hierarchy easily.

This is also because titles are often used interchangeably from business to business, making it difficult to understand what "president" or "principal" might mean from one company to another. Depending on which individual you are seeking, you may be able to do it via that state's secretary of state website, or it may require additional investigative efforts.

The Principal Officer of a Company

Traditionally, the principal of a corporation or LLC is a person who has been authorized by the governing body of that company to act on its behalf during any legal or tax matters that may arise. What this means in practice is that this person can sign his name on documents that affect the LLC or corporation, and his signature is binding for the entire company body.

Additionally, the principal of the company is usually the individual who has the largest share of the company’s ownership. He is often the largest investor and the one with the most at stake in the company’s operations. The principal would be a controlling voice in its operations in tandem with having the rights to act on the business’s behalf in legal- and tax-related issues.

President of a Corporation or LLC

In comparison, the president of an LLC or corporation is usually the head of the organization; this title often overlaps with the title of "chief executive officer". This person is the one who makes the decisions that direct employees and activities along a key path and directs the company in the way that the governing body sees as key to its success. The president or CEO focuses on the company’s internal actions in order to meet its external goals.

Searching for Principals

Once you have determined whether you are looking for a principal or president, you may be able to identify who fills that role in a corporation or LLC. First, you should reach out to the secretary of state in the state of incorporation. That office should have on file who is the registered agent for that corporation.

It is mandatory for corporations and LLCs to provide the name and address of their registered agent, both when they form their LLC or corporation and, typically, on an annual basis. You may even be able to find this information online depending on your state. Once you’ve found the registered agent, you can contact her to verify who is the principal, president or other officer if this information is not publicly listed or available on the corporation website.

Finding Other Roles in LLCs

Keep in mind that an LLC is a limited liability corporation, and LLCs have a little more freedom in defining the roles of those who will govern their decision making. In an LLC, the owners pay taxes individually on the income, profits or losses that they take from the business, and it’s more likely to have a number of investors who hold similar titles with regard to company decision making.

A corporation must follow its articles of incorporation, which will clearly declare the titles it will use for decision making and which of those individuals will have the power to make particular decisions. In either case, there might be multiple principals, or the company might declare a principal without considering who has the major share of the company’s ownership. In these cases, the governing articles of any business will state clearly which individuals fill what roles.

LLC Principals, Presidents and More

There are other terms that can be used either simultaneously with principal and president or in addition to them depending on the size of the organization. Officers are individuals at the highest level who are responsible for making strategic decisions in their designated areas. You may be able to find this information online, but it is less likely that officers will be listed in state searches offered by the secretary of state.

For example, the chief executive officer makes the executive decisions that direct the company’s path, while the chief operations officer turns these executive strategies into day-to-day tasks that manage strategy down to the individual employee level. A chief financial officer oversees the company’s financial decisions, accounting records, sales numbers and investment situations.

Roles with power inside an LLC or corporation are likely to sit on a board of directors (or other governing body with a different name), which is the collective of executives who make decisions together with regard to the business. This is likely to include the principal and the president, the executive officers and other appointed individuals to whom the company’s documentation has given decision-making executive power. Finding out who is on a board of directors may be as simple as looking at a company’s website, or it may require that you reach out to the company.