What Is an Alabama LLC Operating Agreement?
An Alabama LLC operating agreement is an internal document that defines aspects of your LLC’s governance. It covers the ownership structure, operating rules, and management. You can use it to establish your LLC’s unique rules for voting, dissolution, and profit and loss distribution.
In Alabama, it’s officially called a limited liability company agreement. This agreement can be written, oral, or implied (AL Code § 10A-5A-1.02), though it’s easiest to enforce in written form.
Alabama is one of several states that allow for series LLCs, which lets a master LLC separate operations into separate, individual series. However, AL Code § 10A-5A-11.01 only allows a series LLC to exist if the operating agreement explicitly permits it.
Does Alabama Require an LLC Operating Agreement?
No, Alabama does not require an LLC operating agreement. Even though your LLC doesn’t have to have one, it’s highly recommended to create one. It clarifies rules for multi-member LLCs, preventing disputes about operational procedures. Without an operating agreement, your LLC will be subject to the default rules found in the Alabama Limited Liability Company Law.
Even if your entity is only a single-member LLC, an operating agreement proves that it is a separate entity. This reduces the risk of personal liability for any debts that your business incurs. Plus, banks or investors may want to see this document before letting you open a business bank account or providing you with funding.
How to Form an LLC in Alabama
Even though an LLC operating agreement in Alabama is not required, you must file the certificate of formation with the Secretary of State. This document lets you legally form your LLC in the state.
Alabama LLC Operating Agreement Sample
View an example of our Alabama LLC operating agreement to see how this agreement governs relations among members and between the members and the LLC. Create your own with custom terms so you can operate your LLC how you’d like. Then, download it in PDF or Word format to distribute among members and keep in your company’s internal records.
