There is a common misconception among solo founders: “If I am the only owner of my company, why do I need a contract with myself?”
It is a logical question. An Operating Agreement is typically used to settle disputes between partners. If you have no partners, you have no disputes.
However, for a non-resident founder forming a US LLC, the Operating Agreement serves a completely different purpose. It is not about dispute resolution. It is about proof of ownership and asset protection.
Without this document, your LLC is vulnerable to legal challenges, and you may find it impossible to open a US business bank account.
Here is the technical breakdown of why every single-member LLC needs an Operating Agreement in 2026.
1. It Is Your Only Proof of Ownership
This is the most critical factor for international entrepreneurs.
In popular states like Delaware and Wyoming, the public formation documents (Articles of Organization) do not list the names of the owners. They only list the Registered Agent and the organizer. This is great for privacy, but it creates a major problem for banking.
When you apply for a business account with Mercury or Brex, they need to know who actually owns the company.
Since your name is not on the state’s website, the bank will ask for your Operating Agreement. This is the only official legal document that connects you (the individual) to the LLC (the entity). Without it, the bank cannot verify that you have the authority to open an account.
2. Protecting the “Corporate Veil”
The main reason you formed an LLC was to protect your personal savings from business lawsuits. This is called the “Corporate Veil.”
However, this protection is not automatic. Courts can ignore your LLC status and seize your personal assets if they believe your company is just an “alter ego” of you. This is called “piercing the corporate veil.”
If you do not have an Operating Agreement, a court may argue that you are not treating your business like a separate legal entity. They may claim you are running it like a sole proprietorship, which has zero liability protection.
A signed Operating Agreement is your first line of defense. It proves to the court that your business is a distinct legal structure governed by written rules.
3. Avoiding State Default Rules
If you do not create your own rules for your business, the state has a set of default rules waiting for you.
These “default statutes” are general laws designed to fit every business, which means they rarely fit yours perfectly.
The Succession Problem: Consider what happens if you, the sole owner, become incapacitated or pass away.
- With an Operating Agreement: You can designate a successor or a specific process for transferring control to your heirs.
- Without an Operating Agreement: Your LLC will likely be subject to the state’s default probate laws. This can freeze your business assets for months or even years while courts decide who has the authority to manage the company.
4. In Some States, It Is Required by Law
While many states (like Texas or Wyoming) do not explicitly require you to have an Operating Agreement, several major states make it mandatory by law.
If you form your LLC in any of the following states, you must have an Operating Agreement:
- New York: Section 417 of the NY LLC Law requires members to adopt a written Operating Agreement within 90 days of formation.
- California: The California Revised Uniform Limited Liability Company Act requires an Operating Agreement (though it can technically be oral, a written one is safer).
- Missouri: State statutes require an Operating Agreement.
- Maine: An Operating Agreement is required for all LLCs.
Even in states like Delaware where it is not strictly “mandatory” for valid formation, the statute is written with the assumption that one exists.
Final Thoughts: Do Not Skip the Fine Print
For a non-resident founder, the Operating Agreement is not optional paperwork. It is the key to opening your bank account and the shield that protects your personal liability.
Get Your Operating Agreement with Clemta: We understand that drafting a legal contract can be intimidating. That is why Clemta includes a customized, compliant Operating Agreement with every LLC formation package. We ensure your documentation satisfies both state laws and US banking requirements so you can operate with confidence.
