Do US Companies Need Bylaws or an Operating Agreement?

Bylaws (corporations) set the internal operating rules: number of directors and how they are elected, board and stockholder meeting procedures, notice and quorum, officer titles and duties, how shares are issued and recorded, indemnification of directors and officers, and the fiscal year.

Operating agreement (LLCs) is broader, because it is also the ownership contract. It records the members and their percentages, capital contributions, how profits, losses and distributions are allocated, whether the LLC is managed by its members or by managers, who may sign and borrow, restrictions on transferring interests, and what happens on death, exit or dissolution. For a multi-member LLC it also carries the partnership tax provisions.

Delaware's corporation statute assumes bylaws exist: the incorporator or initial directors adopt them at the organization stage, and the statute allocates the power to amend them. New York goes further for LLCs, requiring members to adopt a written operating agreement, with a 90-day window after the articles of organization are filed.

Many other states do not strictly mandate an operating agreement. In those states, the absence of one does not dissolve the LLC — it means the state's default rules apply. Those defaults were written for generic domestic businesses and rarely reflect what a foreign owner or a group of co-founders actually agreed.

A one-person LLC can feel too small for a formal agreement. For a non-US owner it does several jobs no other document does:

• Proves ownership. The articles usually do not name the member; the operating agreement does. Banks and payment processors ask for it for that reason.
• Supports liability separation. A signed agreement treating the LLC as a distinct business, combined with separate bank accounts and books, helps preserve the owner's limited liability.
• Documents money in and out. Capital contribution and distribution clauses give a framework for the related-party transactions reported on Form 5472.
• Plans for succession. It can say who takes control if the owner dies or is incapacitated — otherwise heirs abroad may face a slow process to gain authority over the US company and its bank account.
• Satisfies home-country reviewers such as a parent company's auditor or a foreign tax authority asking what the US entity is.

Reviewers read these documents for specific points, so check them before submitting:

1. The company name matches the filed articles exactly.
2. The document is signed and dated by the members or adopted by board or incorporator consent.
3. Signing authority is clear — who may open accounts, sign contracts and borrow.
4. Ownership percentages match the EIN responsible party, Form 5472 and bank KYC forms.
5. Amendments are signed and kept with the original, so the current version is unambiguous.

An unsigned draft in a shared folder does not prove anything. For a corporation, bylaws are adopted by the incorporator or the initial board, usually by written consent recorded in the minute book. For an LLC, every member signs the operating agreement, or the agreement is adopted in the way the LLC's articles and state law allow. Date the document, keep the signed PDF with the formation certificate and EIN letter, and send that version — not a template — to banks and auditors. If the agreement is later amended, keep each signed amendment with the original so anyone reviewing it can follow the history.

Once there are several owners, a template is not enough. Multi-member LLCs need capital-account and allocation provisions that work with partnership tax rules, a designated partnership representative for IRS audits, and, where members are foreign, clarity on withholding on their share of US business income. Corporations with investors typically add a stockholders' or voting agreement, an equity incentive plan and board-approved option grants. These are legal documents and should be prepared or reviewed by counsel.