Did you know that most states do not require that a limited liability company adopt a formal operating agreement?  In fact, only five states, including California, Delaware, Maine, Missouri and New York, require that an LLC maintain an operating agreement. Therefore, the question often arises as to whether a customer needs or should have an operating agreement.  The answer under most state limited liability statues is NO.  However, this does not mean that a bank or financial institution should not require one from its customers. 

While operating agreements are not required under the law of 45 states, it is not prudent from a risk standpoint to provide a blanket waiver of this requirement.  In short (and unfortunately), such waiver analysis should be done on a case-by-case basis when taking into account the sophistication of the transaction, the complexity of the company involved and other factors that may play into the bank or financial institution’s risk analysis.