The Operating Agreement for a Non-Resident LLC: What It Is, What It Must Contain, and Why the Bank Reads It First

Short answer: the operating agreement is your LLC’s internal contract: who owns it, who runs it, how profit is distributed and what happens when something changes. It is not filed with the state, not sent to the IRS, and needs no notary. And it is still the single document that sinks the most bank applications, because Mercury, Relay and any traditional bank read it as the proof that the company is real and that you have the authority to open the account. This guide sets out what a non-resident LLC’s agreement must contain and the mistakes that get files declined.

This is part of how to form a US LLC as a non-resident.

What it is, and what it is not

When you form an LLC, the state records one minimal public document: the Articles of Organization (in some states, a Certificate of Formation). It carries the name, the registered agent and little else. It does not say who owns the company or how it works internally.

That is the job of the operating agreement: a private contract between the LLC’s members (or between the sole member and the LLC itself, when there is one of you) that sets the rules of governance. In a European company these would be the articles of association; the difference is that here they go through no notary and no registry.

Three things it is not:

• It is not a state document. Wyoming, New Mexico and Florida neither require nor file it. Delaware requires an “LLC agreement” to exist, but does not file it either.
• It is not a tax document. The IRS never asks for it. The LLC’s tax classification follows the default rules and, if you want to change it, Form 8832.
• It is not optional in practice. Without it, no serious fintech will open an account, and in litigation the separation between your assets and the company’s (the “corporate veil”) is easier to pierce, because there is no evidence the LLC operated as an entity distinct from you.

Why the bank reads it before anything else

A compliance analyst at Mercury or Relay receives your application and has to answer three questions: who is the beneficial owner of this company, who has authority to open and operate the account, and is the company genuinely organised or just a shell? The Articles answer none of them. The EIN does not either. The operating agreement answers all three, if it is properly drafted.

That is why generic templates fail so often: the bank does not want a long document, it is looking for specific clauses, and when it cannot find them the application goes to manual review or gets declined. Mercury vs Relay vs Wise covers the rest of the file; this is what the bank looks for in this document.

The clauses a non-resident LLC’s agreement must contain

1. Identification. The exact LLC name (identical to the Articles and to the EIN letter, CP 575, “LLC” suffix included), state and date of formation, principal address and registered agent.
2. Member and interest. Your name as it appears in your passport, your real address (in your home country; a foreign address is perfectly valid) and your percentage: 100% if you are the sole member.
3. Capital contribution. What you contribute at formation, even if nominal. It documents the origin of the first funds that land in the account.
4. Management and authority. Whether the LLC is member-managed (the norm for a single-member company) or manager-managed, and who can sign contracts, open accounts and incur debt on the company’s behalf. Name a manager who does not exist and the bank will ask for their ID, and the application stalls.
5. Banking resolution. A paragraph expressly authorising the LLC to open bank and payment accounts and naming the person authorised to operate them. It is the clause free templates leave out and the one the bank asks for most.
6. Distributions and accounting. How and when profit is distributed, who keeps the books and where the records are held.
7. Tax classification. A statement that the LLC is treated as a disregarded entity for federal purposes unless it elects otherwise. It helps the bank, and your adviser at home, understand what the company is.
8. Liability and indemnification. The standard clauses on the member’s limited liability and indemnification for acts on the company’s behalf.
9. Transfer of interest and admission of members. What it takes to sell or assign the interest or to admit a partner.
10. Succession. What happens if the sole member dies or becomes incapacitated: who inherits the interest and who has interim authority to operate the account and decide whether the company continues or is wound up. For a non-resident, with heirs in another country under other laws, it is the clause that prevents the most trouble and the one almost nobody includes.
11. Dissolution. How the decision to close is taken and in what order debts are settled, contributions returned and the remainder distributed. Covered in how to close a US LLC.
12. Governing law, amendments and signature. The law of the state of formation (not another state’s, copied from a template), how the agreement is amended, and a dated signature.

The mistakes that get applications declined

• Unsigned or undated. The most frequent and the most absurd. An electronic signature is fine.
• Dated before formation. The agreement cannot be signed before the LLC exists.
• Another state’s template. An operating agreement “under the laws of the State of California” for a Wyoming LLC is an immediate red flag.
• Blanks left unfilled. “[MEMBER NAME]” on page 4. It happens more than you would think.
• The phantom manager. Ticking manager-managed because it sounded more serious, naming nobody, or naming a third party who then cannot be identified to the bank.
• A name that does not match. “Acme Digital LLC” in the Articles, “Acme Digital, LLC” in the agreement and “ACME DIGITAL L.L.C.” on the EIN letter. To a person they are the same; to a verification system they are not.
• No banking resolution. The bank needs to find the authority to open accounts inside the document.
• The registered agent’s address as the member’s address. Your address is yours, in your country. The agent’s address is the company’s address for service, not the owner’s.

Multi-member LLCs: what changes

With two or more members the operating agreement stops being a formality and becomes the contract that prevents the dispute. It has to fix percentages, contributions, profit allocation (which need not be proportional), voting rules, which decisions require unanimity, how a departing member’s interest is valued and bought (buy-sell), and what happens when a member stops contributing. For tax, the LLC becomes a partnership: still transparent, but it files its own information return and issues a K-1 to each member. Before signing with a partner, this document deserves the professional review the single-member version does not need.

How we do it at Cheq

Every LLC we form leaves with an operating agreement drafted for its state, with the banking resolution, the succession clause and the tax classification included, electronically signed and dated on the day of formation, and with the name checked against the Articles and the EIN letter before a bank ever sees it. Not because the document is complex, but because it is the one that decides whether the bank application passes first time. The decision remains the bank’s; the file is what we control.

If you already have an LLC formed by another provider and the bank has said no, reviewing this document is the first thing we do under switch your LLC. And if you do not have one yet, the free assessment tells you whether an LLC is your structure before anything gets drafted.