Operating Agreement for a Single-Member LLC Owned from Abroad

When you form an LLC, the state files the articles of organization, but the document that records how the company is run is the operating agreement. Most states do not ask to see it. Banks, payment providers and partners often do. If you are a foreign owner of a single-member LLC, it is one of the cheapest ways to keep the company and your own money clearly separate. This is part of the steps in our guide to registering an LLC in the USA online.

What an operating agreement is

It is a written agreement among the owners (the members) about the company. For a single-member LLC, it is a statement by you that you own the company and how it will be run.

Do you have to have one?

Most states do not require you to file it. A few states require an LLC to have one in writing, and New York asks for one within a set time after formation. Check the state you formed in. Even where it is optional, a bank usually asks for it when you open an account, so prepare it right after the state approves the LLC.

What it covers

• The LLC's name, state and address.
• Who owns it and in what percentage. For a single member, 100%.
• Who manages it: the member, or a named manager.
• How money is put in and taken out.
• What happens if the owner dies or wants to sell.

Why it matters for a foreign owner

• Banks and payment providers. They ask for it to confirm who the owner is.
• Liability protection. A court is less likely to treat the LLC as a front when it has its own paperwork and its own bank account.
• The IRS form. The money you put in and take out is what Form 5472 reports, so clear rules on contributions and distributions make the yearly filing easier. See our Form 5472 guide.

Single-member or multi-member

If you add a second owner, the LLC becomes a partnership for tax and files a different return, Form 1065. Rewrite the agreement before the second owner joins, and read which tax form your LLC files.

How to write one

1. Start from a template for your state.
2. Fill in the names, ownership and management.
3. Sign and date it, and keep a copy with the formation documents.
4. Give a copy to the bank when asked.

Our Standard and Premium formation packages include an operating agreement. See LLC formation for what each package covers.

Common mistakes

• Never writing it, then scrambling when the bank asks.
• Copying a template for another state without checking.
• Never updating it when ownership changes.

Where to go next

Next, get an EIN and open a bank account; see how long each step takes. If you live in India, read LLC registration in the USA from India. From another country, see open a US LLC from any country. This is general information, not legal advice.