What Is an Operating Agreement? The Document Your Bank Needs Even When Your State Doesn't
Only four states legally require an operating agreement. That number is misleading. Mercury asks for one. Stripe assumes one exists the moment it links you to a bank. Any serious counterparty will ask for one eventually. The gap between "not legally mandated" and "unworkable without it" is exactly what catches non-resident founders off guard. This guide covers what the document actually is, who legally requires it, and why your bank asks for it regardless.
The part that surprises people: an operating agreement is never filed with any government body. But without one, Mercury and most banks simply won't open your account — regardless of what your state requires.
What an Operating Agreement Actually Is
An operating agreement is an internal governance document that spells out how the LLC runs: who owns it, who makes decisions, how profits split, and what happens if a member sells their stake or the company dissolves. Unlike the Articles of Organization — filed with the Secretary of State and part of the public record — the operating agreement stays private, kept with your company records, and never reaches a government body. This is general information, not legal advice — confirm the specifics with a licensed attorney.
Which States Actually Require One
Only four states impose a clear statutory mandate: California, New York, Missouri, and Maine. New York is the outlier in requiring the agreement to be in writing, within 90 days of formation (New York Department of State). Even Delaware, the most common formation state for non-residents, permits an agreement "before, after or at the time of" formation without mandating that one exist at all (Delaware LLC Act).
| State | Status |
|---|---|
| California | Statutory requirement — written or oral. |
| New York | Statutory requirement — must be in writing, within 90 days of formation. |
| Missouri | Statutory requirement — written or oral. |
| Maine | Statutory requirement — written or oral. |
| Delaware, Wyoming & most others | Permitted, not mandated — but every LLC still needs one to open a bank account. |
Why Your Bank Will Ask for One Anyway
Mercury tightened its requirements starting in 2025 and now expects a real US address and a clear business description, alongside the standard document set: your EIN confirmation (ideally the original CP-575 letter), Articles of Organization, an operating agreement, and a valid passport. Mercury doesn't open accounts for non-residents as individuals — you need a registered US entity, typically an LLC or C-Corp.
Stripe works through Mercury, Wise Business, or Relay accounts linked to a US LLC, and supports foreign-owned LLCs as long as the bank account itself is US-based, even if the owner is outside the country. Without an operating agreement, you generally can't receive payouts from Stripe, Shopify, or Amazon, pay US vendors, or demonstrate that your LLC is the kind of real, functioning entity a bank is actually looking for.
What Needs to Be in Yours
Generic templates exist, and plenty of founders use one as a reasonable starting point. As a non-resident owner, three elements deserve particular attention:
Ownership & management
Each member's percentage ownership, and whether the LLC is member-managed or manager-managed — the state filing and the agreement should match.
Authority delegation
For a non-resident owner, a clause naming who can sign on the LLC's behalf inside the US — this is often what a bank actually reads for.
Capital & distributions
How much each member contributed, and how profit is split — the numbers a bank or the IRS may cross-check against your filings.
Single-Member vs Multi-Member Agreements
The same underlying principle applies to both structures, but the content differs: a single-member agreement focuses on authority delegation and separating you personally from the company for liability purposes, while a multi-member agreement needs more detailed voting, profit-split, and dispute-resolution clauses — and the federal tax treatment can differ sharply between the two. See our full single-member vs multi-member comparison for the details, including how a multi-member LLC can trigger up to 37% federal withholding on a foreign co-founder's share of profit.
What OpenEntity's Plan Covers
OpenEntity's plan includes your LLC formation, EIN, registered agent, and an operating agreement built for your structure — single-member or multi-member — ready to submit to Mercury or whichever US bank you choose. OpenEntity is a formation and consulting service, not a law firm, so we recommend a licensed attorney review any custom clauses your situation needs.
FAQ
Is an operating agreement filed with the state?
No. Unlike Articles of Organization, an operating agreement is an internal document — you keep it with your company records, and it is not submitted to the Secretary of State. This is general information, not legal advice — confirm your state's specific filing requirements with a qualified advisor.
Which states legally require an LLC operating agreement?
California, New York, Missouri, and Maine have a statutory requirement, and New York specifically requires it to be in writing. Most other states, including Delaware and Wyoming, permit — but don't mandate — an operating agreement, whether oral, implied, or written. This is general information, not legal advice — always confirm the current rule for your formation state.
If my state doesn't require one, do I still need an operating agreement?
For opening a US bank account or a payment processor account like Stripe, effectively yes. Banks including Mercury generally ask for the operating agreement alongside your EIN confirmation and Articles of Organization, regardless of what your formation state legally requires. This is general information, not legal or banking advice — confirm current documentation requirements with your chosen bank.
Does a single-member LLC need an operating agreement?
Yes, even with one owner. It documents your authority to act for the company, which matters for banking, and it separates you personally from the LLC for liability purposes — a factor courts weigh if your LLC's status is ever challenged. See our single-member vs multi-member comparison for how the document differs between the two structures. This is general information, not legal advice.
Can I write my own operating agreement, or do I need a lawyer?
Templates exist and many founders use one as a starting point, but a foreign-owned LLC often benefits from a few added clauses — authority delegation for a non-resident owner, and how the agreement interacts with your Form 5472 and tax filings. This is general information, not legal advice — a licensed attorney can review your specific facts.
Does an operating agreement need to be notarized?
Generally no. An operating agreement is a private contract among the LLC's members (or the sole member), and standard practice is a signed document kept with company records — notarization is not typically required. This is general information, not legal advice — confirm with a qualified advisor if your situation is unusual.
Start Your LLC With a Bank-Ready Operating Agreement
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Check if I qualify — free, 60 secondsDisclaimer: OpenEntity is a private business formation and consulting firm and does not provide legal or tax advice. Everything in this article is general information for educational purposes only and may not reflect your specific facts or your state's latest rules. Consult a licensed attorney before acting on anything here.