Alabama LLC operating agreement

What Alabama’s LLC act says

The quotes behind this section come from the act as the legislature passed it; later amendments may differ.

Alabama calls the document a limited liability company agreement. The definition in section 10A-5A-1.02 says it can also be referred to as an operating agreement. ⁴

Alabama defines the agreement as written, oral or implied. It may be called an operating agreement or by another name. ⁴

What Alabama’s act does not let an agreement change:

• Treat the company as anything but a separate legal entity ¹
• Restrict the rights of people who are not members ¹
• Eliminate the implied covenant of good faith and fair dealing ¹

One-member company. Alabama says an agreement is not unenforceable just because only one person is a party to it, so a one-member company can have one. ⁴

What happens with no agreement

In Alabama, when the agreement does not say who directs and oversees the company, the members do. ²

Alabama's default is that all members share equally in distributions made before dissolution, whatever each put in. An agreement can provide differently. ³

What the template covers in Alabama

• Company Details. The company's name, state, effective date and principal office.
• Members & Management. Who the members are, whether there is one or several, and who runs the company.
• Capital & Distributions. What each member puts in and how profit is paid out.
• Taxes. The federal tax treatment the company reports under.
• Transfers & Buyout. What happens when a member sells, leaves or is bought out.
• Governance & Legal Terms. How votes, outside work, confidentiality and disputes are handled.
• Succession. Who takes over a single-member company if its member cannot act.
• Notarization. An optional notary acknowledgment page.

Alabama’s default management and profit rules are in the sections above. In the template you pick member-managed or manager-managed, and ownership share or equal shares for profit.

You also choose single-member or multi-member. The text is built in the Document Builder, not printed here.

Where it fits when you form an Alabama LLC

You form an Alabama LLC by filing with Alabama’s Secretary of State.

Alabama has no annual report for LLCs.

Alabama uses "registered agent" and "registered office." Ala. Code § 10A-1-5.31(a) requires each filing entity, including LLCs, to "designate and continuously maintain in this state" both. ⁵

Search the Alabama business records at the Secretary of State before you file: Alabama entity search.

The operating agreement for an Alabama LLC is separate from the Alabama formation filing. Alabama's LLC law lists the effective agreement and its amendments among records each company must keep. The cited section does not say the agreement is filed with the state. ⁶