Due to latest crop of regulations, a particular financial institution is requiring a share member break down for a single-member LLC, an odd step in verification since there is only one share member and that would be me. (not even getting into the fact that LLC's dont have shares)

To federal regulators, single member LLCs are largely indistinct from personal ownership and sole proprietorships, which is why this would be a personal finance question.

What exactly would the financial institution need to see to make them comfortable with these regulations, I've never encountered this before, I told them I am the owner, my name is also on the account but apparently that isn't enough for their compliance interpretation of latest regulations, they want something in writing? In a particular format? Not really sure

Otherwise they won't accept a fund transfer from my personal account to the business account due to a prohibition on "third party deposits", makes me wonder how anyone can fund businesses initially if this is a widespread practice.

  • 1
    Have you tried showing them your state-issued LLC registration document? Usually this lists the members on it.
    – Icydog
    Jun 3, 2014 at 16:28
  • @Icydog I'll check that, they have articles of organization, I'll look to see what other stuff I have
    – CQM
    Jun 3, 2014 at 16:50
  • @Icydog even that wasn't enough for their compliance department, but their other departments are working with me (money talks). I don't think their compliance department yet realizes how onerous their company's response to regulations have become
    – CQM
    Jun 3, 2014 at 19:45
  • 2
    is this in the USA? If they won't even accept articles of organization, I would look at moving to a different bank. Banking with them in the future is likely to continue being painful even if you get past this hurdle.
    – Icydog
    Jun 4, 2014 at 16:53
  • 1
    @Icydog articles of organization are meaningless in this context. The OA is what they want. Articles, at most, state who the members are (in many States - not even that). OA defines which member can do what. That's what the compliance is after.
    – littleadv
    Jun 5, 2014 at 5:51

1 Answer 1


What exactly would the financial institution need to see to make them comfortable with these regulations

The LLC Operating Agreement. The OA should specify the member's allocation of equity, assets, income and loss, and of course - managerial powers and signature authorities. In your case - it should say that the LLC is single-member entity and the single member has all the managerial powers and authorities - what is called "member-managed".

Every LLC is required to have an operating agreement, although you don't necessarily have to file it with the State or record it. If you don't have your own OA, default rules will apply, depending on your State law. However, the bank will probably not take you as a customer without an explicit OA.

  • Which financial institutions require an OA? Also, not every LLC is required to have one. According to the link you posted, "many" states in the US require one. My home state of WA does not, and I had no issue opening an account at BofA without one. A bank requiring explicit documentation of share allocation seems odd for a single-member LLC.
    – Icydog
    Jun 5, 2014 at 7:06
  • @Icydog check the WA statute. Simple search shows (apps.leg.wa.gov/rcw/default.aspx?cite=25.15.050) that an agreement is required. "In addition to agreeing among themselves ...". As I said - the agreement doesn't need to be filed or recorded, but it has to exist, and banks require it. If your bank didn't - they can get themselves in trouble if at a later date the LLC members or creditors claim that you didn't have the authority to conduct business on the LLC behalf.
    – littleadv
    Jun 5, 2014 at 7:09
  • @Icydog and another explicit mention of OA in the WA statute (apps.leg.wa.gov/rcw/default.aspx?cite=25.15.170): "manager who fails to perform in accordance with, or to comply with the terms and conditions of, the limited liability company agreement" - so if you're a manager of your LLC, even if it is a single-member LLC, you must follow the OA, by law. That is exactly why the banks want it - because that's how they know what you can and cannot do.
    – littleadv
    Jun 5, 2014 at 7:14
  • Both of those statutes say "may." I'm not a lawyer, but a Google search seems to agree that OA is not required in WA.
    – Icydog
    Jun 5, 2014 at 8:38
  • @Icydog neither of the lines I quoted says may. You may agree to whatever else you want, but some things must be agreed upon. You may be confusing between "requiring an agreement" and "requiring a formalized agreement". That's a common confusion.
    – littleadv
    Jun 5, 2014 at 16:11

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