An operating agreement records how your LLC is owned and run. For a foreign-owned LLC, it should explain who can sign, how owners fund the company, and how decisions and distributions work.
Start with your formation record and actual ownership arrangement. Then prepare terms that match those facts. A bank may request the agreement, but its value goes beyond opening an account: it gives you a written reference when money, ownership or responsibilities change.
Is a written agreement legally required?
For ordinary Wyoming and Delaware LLCs, neither state requires every operating agreement to be written. Their legal approaches still need a distinction.
Under Wyoming’s LLC Act, section 17-29-102 recognizes oral, recorded and implied agreements, including a sole member’s agreement. Section 17-29-110 supplies statutory rules where the agreement is silent. A signed written document is a practical recommendation, not a universal Wyoming formation requirement.
In Delaware, section 18-201(d) says an LLC agreement must be entered into or otherwise exist before, after or at formation. But section 18-101(9) allows written, oral or implied agreements. “Delaware requires an agreement” does not mean “Delaware requires a signed written agreement filed with the state.”
For both states, keep the operating agreement with the company’s records rather than submitting it as the formation filing. Delaware’s official FAQ expressly confirms that agreements and amendments are not filed with the Division of Corporations.
Match the document to the number of members
A member is an LLC owner. A single-member agreement should identify the sole member, ownership, management structure and authority to act for the company.
A multi-member agreement needs more work. Record each member’s interest, contributions, voting rights and economic rights. Do not assume that the person contributing the most cash automatically gets the largest vote.
| Issue | Single-member LLC | Multi-member LLC |
|---|---|---|
| Ownership | Identify the sole owner | Record each owner’s interest |
| Decisions | State who has authority | Define voting and approval rules |
| Money | Track owner funding and withdrawals | Define contributions and distribution rights |
| Continuity | Plan for incapacity or death | Also address departures and deadlocks |
For example, two members may agree on 60% and 40% ownership but require both to approve borrowing. Write both rules clearly. An ownership percentage alone does not explain every decision.
Record capital, loans and distributions separately
Capital contributions are money or property put into the LLC as an owner. A loan is funding intended to create a repayment obligation. A distribution is money or property paid out because of ownership.
The agreement should explain how contributions are recorded and whether future contributions can be required. Keep dated supporting records rather than relying on a single figure written at formation.
Suppose a sole owner transfers money for software and formation costs. Record whether it is a contribution, reimbursement arrangement or documented loan. If it is a loan, keep terms explaining repayment and any interest, plus evidence of the transfer. Calling every deposit “capital” and every withdrawal “salary” obscures what happened.
A label alone does not determine tax treatment. A transaction recognized under company law may be disregarded for some federal tax purposes.
Distribution provisions should address approval and cash retained for company obligations. They cannot override statutory limits on distributions. Our related-party transaction guide explains why foreign-owner transfers also need tax records.
Make signing authority usable
State whether members manage the LLC directly or appoint a manager. Then identify who can open accounts, sign customer contracts, approve payments and borrow money.
Separate ordinary decisions from decisions needing additional approval. A remote team might let its manager sign routine software contracts but require member approval for new debt or selling company assets.
Keep bank authorizations and written member decisions consistent with the agreement. A bank may request the signed agreement, a resolution or other evidence of authority. That request is the bank’s documentation requirement, not proof that state law requires every LLC to use that document.
The person who files the formation paperwork is not automatically the owner or ongoing manager. Likewise, a registered agent receives legal notices; that appointment alone does not authorize it to run your business.
Plan for transfers, disputes and closure
Before signing, discuss how an owner can leave and who can join. Address transfer approvals, valuation, payment terms and what happens if members disagree.
Distinguish transferring an economic interest from admitting a new member with management rights. Have a lawyer review those terms rather than assuming that selling a percentage transfers every right.
For a solo owner, consider continuity after death or incapacity. For equal owners, agree on a deadlock process while you still agree on the business.
Also identify who can approve dissolution and manage winding up: settling obligations and distributing remaining assets. Closing an account does not complete state dissolution and final tax filings. These are review topics, not a universal contract to copy and sign.
Keep the agreement separate from tax classification
The IRS classification guidance generally treats a domestic single-member LLC as disregarded for federal income tax and an LLC with two or more members as a partnership, unless a corporate election applies.
Writing “corporation” in the agreement does not make that election. Nor does a clause promising pass-through treatment settle how another country taxes the company.
An LLC with a nonresident alien shareholder cannot qualify for S corporation status under the IRS eligibility rules. An operating agreement cannot change that restriction.
When a second owner joins, review the effective date and Form 1065 partnership obligations. Profit allocations and cash distributions are not the same thing. Give your preparer the signed agreement, amendments and actual transaction records.
Frequently asked questions
Can I use a free template?
It can organize your questions, but check the state, management model and ownership terms. Remove irrelevant provisions only after understanding them. Multiple owners, unequal rights or cross-border succession deserve tailored legal review.
When should I update the agreement?
Review it when members, management or economic terms change. Follow its amendment rules, record the effective date and retain earlier versions. Update related ownership schedules and bank permissions as needed.
Does Nonresident Tax provide one?
Our formation service includes an operating agreement for a single-member LLC. Ask about any special terms before ordering. Multi-member formation is available by request; our pricing page currently lists multi-member tax returns as coming soon. We do not currently file Form 1065, so arrange a partnership preparer separately.
Sources checked October 2026
- Wyoming Legislature: Title 17, sections 17-29-102, 110 and 201.
- Delaware Code: Section 18-101 and section 18-201.
- Delaware Division of Corporations: Agreement filing FAQ.
- IRS: Single-member LLCs and classification.
- IRS: S corporation eligibility.
