E-2 Visa LLC Operating Agreement: What It Must Include

The E-2 visa requires the investor to demonstrate controlling interest in the enterprise and a genuine role in developing and directing it. For an LLC, the operating agreement is the primary legal document that establishes who owns what percentage, how decisions are made, and who has the authority to hire, fire, enter contracts, and run day-to-day operations.

Officers are specifically trained under 9 FAM 402.9-8(A) to evaluate whether the investor holds real operational control or merely holds equity without management authority. An operating agreement that gives the investor 60 percent of profits but reserves all management decisions to a third-party manager creates exactly that problem. The ownership percentage and the management authority must both point to the investor.

The operating agreement must clearly state each member's ownership percentage. For an E-2 investor who is the sole owner, this is straightforward: 100 percent ownership by a named individual who is a national of the treaty country. For multi-member LLCs, the percentage attributable to treaty-country nationals must total more than 50 percent when the nationality is traced to the individual level.

Officers do not take ownership percentages at face value when the members include entities rather than individuals. If a member is a holding company or trust, the officer will look through it to the actual beneficial owners to confirm the nationality requirement is met. The operating agreement should identify all members as natural persons where possible, or the application package should include documentation tracing ownership through any intermediate entities to named individuals and their nationalities.

For investors who will hold between 51 and 99 percent, the percentage should be stated precisely. Vague language like "majority ownership" without a specific figure is not sufficient. Some attorneys include a membership ledger or certificate of membership as an exhibit to the operating agreement, which reinforces the ownership documentation.

The operating agreement must establish that the E-2 investor has clear authority to manage the enterprise. There are two main structures: member-managed and manager-managed. For E-2 purposes, member-managed LLCs where the investor is the managing member are generally simpler to document. In a manager-managed structure, the investor must be designated as the manager and the agreement must define the manager's authority broadly enough to demonstrate real operational control.

Provisions to watch for and correct before filing include: supermajority voting requirements that give a minority member veto power over ordinary business decisions; restrictions that require unanimous consent for hiring or firing employees; and clauses that delegate management authority to someone other than the investor for day-to-day operations.

The agreement should explicitly give the managing member authority to: sign contracts on behalf of the LLC, open and operate bank accounts, hire and terminate employees, enter leases, and make purchasing decisions within defined dollar limits or without limit. These are the kinds of operational decisions officers expect an E-2 investor to be making.

A two-member LLC with 50/50 ownership creates a controlling-interest problem for E-2 purposes. Neither member has majority control. Officers have denied applications where the investor owned exactly half the LLC, even when the investor was clearly the more active partner, because the legal documents showed equal ownership without a mechanism that gave one person final authority.

The fix is typically done at the operating agreement level. One option is to adjust the ownership split to 51/49 or another unequal distribution. A second option, used when both partners want equal economic participation, is to give one member a contractual tie-breaking vote or a designated role as managing member with authority that supersedes the other member's voting rights on operational decisions. The State Department guidance under 9 FAM 402.9-8(A) does allow for operational control through non-equity means, but the agreement must explicitly establish that control in writing.

If the investor holds a minority stake, the develop-and-direct requirement can still be met if the investor's role as manager or officer is clearly documented and the operating agreement gives that manager broad unilateral authority over day-to-day operations. However, strategic decisions such as dissolving the company or selling its assets typically remain subject to member vote, which is acceptable as long as operational authority is clearly vested in the investor.

The operating agreement should name the E-2 investor as managing member or manager and include a description of their duties. Some attorneys also include a separate officer designation or written resolution appointing the investor as President or CEO, particularly when the LLC will be managed by a person with a specific professional title that is relevant to the business type.

Compensation provisions matter as well. Officers look at whether the investor will draw a salary and whether that salary is consistent with the scale of the enterprise. An operating agreement that allows the investor to draw an unlimited salary from a business with $80,000 in projected revenue may raise marginality questions. The compensation language should be consistent with what appears in the business plan.

Provisions that prohibit the investor from drawing any compensation at all are also problematic, as they suggest the investor has no ongoing stake in the business's financial performance. The standard approach is to allow the managing member to draw a reasonable salary or guaranteed payment, defined either as a fixed amount or as an amount approved annually by the members.

Certain boilerplate provisions in standard LLC operating agreements create problems in E-2 review even though they are legally unremarkable in a domestic business context. Officers look for these because they suggest the investor's control is nominal rather than real.

Dead-hand provisions that automatically transfer management authority to a successor designated by another member if the investor leaves or dies are sometimes interpreted as limiting the investor's current control. Officers may question whether an investor who can be removed by the other member without cause actually "develops and directs" the enterprise.

Outsized veto rights held by a passive investor or a silent partner can also raise questions. If the operating agreement requires the passive investor's consent before the managing member can make significant operational decisions, the officer may conclude that the active investor does not actually control the business.

• Remove or limit veto rights held by passive or minority members over day-to-day decisions
• Avoid automatic manager-succession clauses triggered by events outside the investor's control
• Confirm that any supermajority voting thresholds apply only to extraordinary events (dissolution, merger, major asset sale), not routine operations
• If a third-party management company is involved, document clearly that the E-2 investor retains ultimate authority and can terminate the management contract

The operating agreement should be reviewed by an immigration attorney before the E-2 application is submitted. A business attorney drafts operating agreements for state law purposes; they are usually not focused on federal immigration standards. Common provisions that are perfectly fine for business law purposes can undermine an E-2 application.

If the operating agreement was drafted years before the E-2 application, it may need to be amended. Amendments are routine and are accepted by officers as long as they are properly executed and signed by all members. Include the original agreement and any amendments together in the application package. Do not submit only the amendment without the original, as officers need to see the complete governing document.

The agreement should also be consistent with all other documents in the application. If the business plan describes the investor as CEO with authority over hiring and budgets, the operating agreement must actually give the investor that authority. Internal consistency across documents is one of the things officers specifically check.