If you’re starting a US LLC, you’ll hear one term again and again: Operating Agreement.
Many first-time founders—especially non-US residents—are confused about whether they actually need one, what it includes, and why it matters if the state doesn’t mandate it.

An operating agreement may not sound exciting, but it’s one of the most important documents for your LLC. It protects your ownership, clarifies how your business runs, and helps you avoid legal and financial trouble later.

Let’s break it down in simple terms.

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What Is an Operating Agreement?

An Operating Agreement for a US LLC is a legal document that defines how your LLC is owned, managed, and operated.

Think of it as the rulebook of your company.
It explains:

• Who owns the LLC
• How decisions are made
• How profits and losses are shared
• What happens if a member leaves

Even if you are the only owner, an operating agreement is still extremely valuable.

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Is an Operating Agreement Mandatory?

In most US states, an operating agreement is not legally required to form an LLC.
However, having one is strongly recommended—and in practice, often necessary.

Banks, payment processors, investors, and even courts frequently ask for it.

Some states (like California and New York) explicitly require LLCs to have an operating agreement, even if it’s not filed with the state.

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Why an Operating Agreement Is Important

1. Protects Your Limited Liability

An operating agreement helps prove that your LLC is a separate legal entity, not just an extension of you personally.
This separation is critical for protecting your personal assets.

2. Prevents Ownership Disputes

If there are multiple members, this document clearly states:

• Ownership percentages
• Voting rights
• Profit distribution

Without it, state default rules apply—and those may not work in your favor.

3. Required for Banking and Payments

Most US banks ask for an operating agreement when opening a business bank account.
Platforms like Stripe, PayPal, and Amazon may also request it during verification.

4. Adds Professional Credibility

Having a proper operating agreement shows that your business is legitimate, structured, and serious.

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What Does an Operating Agreement Include?

A standard operating agreement usually covers:

LLC Ownership Structure

• Names of members
• Ownership percentages
• Capital contributions

Management Structure

• Member-managed or manager-managed
• Roles and responsibilities

Profit and Loss Distribution

• How income and expenses are allocated
• Payment timelines

Voting and Decision-Making

• Voting rights
• Decisions requiring unanimous or majority approval

Member Changes

• Adding new members
• Transfer of ownership
• Exit or death of a member

Dissolution Rules

• How the LLC can be closed
• Distribution of remaining assets

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Do Single-Member LLCs Need an Operating Agreement?

Yes—absolutely.

A single-member operating agreement:

• Strengthens liability protection
• Helps with banking and compliance
• Clarifies tax treatment

For non-US owners, it is often requested during EIN processing or account verification.

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Operating Agreement for Non-US Residents

If you’re a non-US resident owning a US LLC, an operating agreement is even more important.

It helps:

• Prove ownership to US banks
• Support tax filings
• Avoid confusion with IRS classifications
• Establish clear business structure across borders

Many service providers customize operating agreements specifically for foreign-owned LLCs to ensure compliance.

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Can You Change an Operating Agreement Later?

Yes.
An operating agreement can be amended anytime as your business grows.

Common reasons to update it include:

• Adding a partner
• Changing ownership percentages
• Switching management structure

It’s good practice to review it annually.

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FAQs About Operating Agreements for US LLCs

Is an operating agreement filed with the state?

No. It is an internal document and is not submitted to the state.

Can I write my own operating agreement?

Yes, but using a professionally drafted version reduces legal and compliance risks.

Does the IRS require an operating agreement?

The IRS does not require it directly, but it supports proper tax classification and documentation.

Is one operating agreement enough for multiple states?

No. Each LLC should have its own agreement based on its formation state and structure.

What happens if I don’t have one?

State default rules apply, which may not protect your interests or match how you want to run your business.

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Conclusion

An operating agreement for a US LLC is not just paperwork—it’s a foundation for your business.

Whether you’re a solo founder or have partners, and whether you live in the US or abroad, this document protects your ownership, supports compliance, and helps your LLC run smoothly.

If you’re serious about building a long-term, legally sound business, having a clear operating agreement is not optional—it’s essential.