One of the most common questions we get from our GlobalBanks USA members is: “What proves I am the owner of my LLC?” This always comes up when they want to open a bank account for their company.
With the right documents, it’s actually quite simple to prove that you’re the owner of your LLC. But without them, it can be very difficult. So, if you need the answer to the question “What proves I am the owner of my LLC?”, we’ve got you covered…
When applying for business bank accounts, you can prove that you’re the owner of your LLC by submitting either your operating agreement or your EIN confirmation letter. If you don’t have either of these documents, you will not be able to open a business bank account. Luckily they are relatively simple to get.
In this article, we‘re going to share how to get both an operating agreement and an EIN confirmation letter. That way you can answer the burning question “What proves I am the owner of my LLC?”.
But, that’s not all.
As a bonus, we’ll share with you the many benefits of opening a bank account for your US LLC today.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Can I Use an Operating Agreement to Prove Ownership of an LLC?
- Can an EIN Confirmation Letter Prove Company Ownership?
- What Happens if My Operating Agreement Is Incorrect?
- What are the Benefits of a US Limited Liability Company?
- How Can You Open Bank Accounts for Your US Limited Liability Company?
- Frequently Asked Questions From LLC Owners
- Do You Want Help Opening Bank Accounts?
Can I Use an Operating Agreement to Prove Ownership of an LLC?
If you need to provide proof that you’re the owner of your US LLC to open a US bank account, purchase property on behalf of your business, or sell your company, there are two specific documents that can help you do so.
The first is an operating agreement.
An operating agreement is a document outlining the basic information about your business. For instance, it outlines how your US LLC operates, including the day-to-day operations, the purpose of the business, and the primary products or services that are sold.
It also outlines the following: the company’s legal name, address, and registered agent. And, not to mention, the names, addresses, and duties of all the owners.
Overall, it’s a good idea to have an operating agreement for your LLC to clarify your tax relationship. But also, to avoid being subject to default state LLC rules that you may not be aware of.
You can prepare a written operating agreement on your own, and you’ll find many free templates for this online. But, it’s best if you hire legal aid. That way, you can make sure that all the necessary clauses are included and that the document is legally sound.
Some incorporation services may include operating agreements directly in their packages or as an add-on. If your main goal is just to set up a bank account, then these will typically be sufficient. Not to mention, very cost-effective.
So, if you need to answer the question “What proves I am the owner of my LLC?” one option is through an operating agreement.
Your second option to prove ownership of your LLC is with an EIN confirmation letter. More on this below.
If this is your first time visiting GlobalBanks, download your free copy of the US Banking Starter Guide. It’s designed to help non-residents and foreigners successfully open bank accounts in the United States 100% headache-free and 100% remote.
Can an EIN Confirmation Letter Prove Company Ownership?
When opening a business bank account for your US LLC, an alternative way to prove ownership of your LLC would be to submit an EIN confirmation letter.
But, what exactly is an EIN and how can a business obtain one?
An EIN, also known as an employer identification number, is used by the state to identify a business entity for tax reporting purposes.
And, not only is it helpful to have an EIN when opening a US business bank account, but it can also be beneficial to have if you’re looking to obtain a US business credit card. Not to mention, when you need to prove you’re the owner of your US LLC for other purposes.
Now, obtaining an EIN confirmation letter isn’t always an easy process. This is especially true since the IRS is the only institution that can issue this type of document.
But, if you’re able to provide and submit the right information, you’ll receive an official letter from the IRS confirming your LLCs EIN immediately after being assigned an EIN.
If you have an ITIN, you’ll be able to directly apply for an EIN online. If you don’t, you’ll have to call, fax, or mail your application in. However, the standard processing time for mailed EIN applications is four weeks.
Once received, you can use the confirmation letter to prove you’re the owner of your US LLC. But also, to open a US bank account for your company.
Now, if either your operating agreement or EIN confirmation letter has the wrong information, it may be rejected by banks. Find out what to do to fix errors in your documents in the next section.
What Happens if My Operating Agreement Is Incorrect?
As mentioned, an operating agreement is used to verify the name of the owner or owners of the LLC.
Unfortunately, these documents can sometimes have typos, misspelled names, or incorrect information. Which can cause them to be rejected by bank representatives.
Luckily, since operating agreements are internal documents and are kept for personal records, modifications can be made to the agreement at any point in time.
So, whether you need to modify a misspelled name, add a new owner, or update details on the ownership of the company, you can do so by simply downloading your operating agreement and making the necessary proper amendments.
That said, for it to be valid, all owners of the company must sign the new and updated operating agreement.
That way, all owners will be up to date on how the LLC currently operates. These amendments don’t need to be filed with the state, they simply need to be documented and kept internally.
Now, in addition to the question “What proves I am the owner of my LLC?” we often get asked why foreign business owners are so interested in creating a US LLC.
What are the Benefits of a Limited Liability Company?
Having a US LLC as a foreign business owner can open endless doors of opportunities.
For instance, US LLCs offer foreign business owners liability protection, tax benefits, and better opportunities to grow their businesses.
But, that’s not all.
We explain the three main reasons why a foreign business owner would benefit from creating a US LLC below.
An important factor in any business’s success is having a bank account to manage the company’s financials. This is especially true for many US LLCs that need to keep personal and business accounts separate for legal liability reasons.
Fortunately, if you operate a US LLC, you’re eligible to open a US business bank account.
In fact, unlike many other banking jurisdictions, US banks don’t require proof of ties to the US or proof of residency to open an account as a foreign business owner.
With a US bank account not only can you access a wide range of banking products and services, but you can build a US credit history to access credit cards, financing, and mortgages.
One of the top services that your foreign-owned US LLC would benefit from is to be able to tap into low-cost payment processing.
2. US Payment Processing
Hands down one of the primary reasons why foreign business owners are attracted to US LLCs is to access US payment processing.
For any business, having the right payment processor is key. In fact, it’s critical to your business’s success. This is especially true if you sell products and services to customers internationally.
But, what’s so great about US payment processing in particular?
Well, compared to other countries, the payment processors in the US are much more cost-effective. Not to mention, there is a much wider variety of payment processing options to choose from.
Best of all, with US payment processing you can target US customers and accept USD transactions.
So, if you’re looking for low-cost payment processing, have a large US customer base, or want to handle transactions in USD, a US LLC might be for you.
But, if you’re curious about what else a US LLC can offer, keep reading.
Last but definitely not least, foreign-owned US LLCs with zero US Effectively Connected Income (ECI) –as in no US operations, or employees– are not liable for US taxes.
That means that with a US LLC, foreign business owners not only can reach more customers but actually save more money in the process.
Note, if you fit this category, you’ll still be required to file an informational return to the IRS on an annual basis.
But, if you’re a foreigner with no US business operations, there’s a good chance that your US LLC can operate at an effective tax rate of 0% in the USA.
Watch out, because some US service providers will try to charge you thousands of dollars to file these informational returns. But, if you choose to hire someone to do it for you, it should only cost a couple hundred dollars.
Of course, you can also file these forms yourself. That is if you’re willing to brave the US tax code on your own.
Now, to unlock these benefits, you first need to know how to answer “What proves I am the owner of my LLC?”, but also how to successfully open a US bank account for your US LLC.
How Can You Open Bank Accounts for Your US Limited Liability Company?
Not surprisingly, if you’re looking to open a bank account for your US LLC, you’re going to need to identify the specific banks that will accept your client profile.
Not to mention, understand and overcome the account opening challenges foreign business owners often face. Including navigating the strict onboarding process, providing an acceptable US address, and meeting bank-specific requirements.
And, like banking anywhere, overcoming these challenges can be very difficult if you’re not well prepared.
But, opening a bank account for your US LLC in the United States is possible. And, if you can properly navigate the opening process, you can open accounts with real banks 100% remotely!
In fact, we help members of GlobalBanks USA open bank accounts for their US LLCs on a regular basis. Not to mention, our GlobalBanks USA members get direct support from our team of banking experts where we answer your difficult banking questions. And, we suggest specific banks that match your specific client profile.
Additionally, we also make direct introductions to banks in the USA to help start the process of opening a bank account for your US LLC.
So, if you’re ready to learn more about how to answer “what proves I am the owner of my LLC?” to open a US bank account today, here’s how…
Frequently Asked Questions From LLC Owners
Below are two of the most common questions we receive from people exploring what proves you are the owner of your LLC. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
How Do I Prove Ownership of My Business?
You can prove ownership of your business through your operating agreement, EIN confirmation letter, stock certificates, or articles of incorporation. Depending on who requires the proof of ownership, the type of documents that are accepted will vary.
What Is an Example of Proof of Ownership Documents?
An example of proof of ownership documents include articles of incorporation, EIN confirmation letters, operating agreements, and stock certificates. That said, when submitting these documents, additional documents including proof of identification, proof of address, and more will likely be required.
How Do You Show Business Ownership?
How you show business ownership will depend on the reason why. For example, if you are looking to open a business bank account, the documents accepted by the bank will depend on the bank you choose to open an account with. That said, generally, most banks will accept an operating agreement and an EIN confirmation letter.
Do You Want Help Opening Bank Accounts?
If so, you can get access to GlobalBanks USA (our dedicated US account opening service) in just a few clicks.
GlobalBanks USA is a 100% personal account opening solution. It provides direct access to our team of US banking experts.
When you join, you receive…
+ Expert suggestions on where to open US bank accounts.
+ Step-by-step support to navigate US account opening.
+ Direct introductions to helpful and responsive bankers.
+ Plus, detailed guides to maximizing the value you get from your new US bank account.
And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
To learn more about opening accounts with GlobalBanks USA, just click here now. Or, contact us directly with any questions!