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Create your Alabama operating agreement
Answer a few questions, download the PDF. No card, no account.
Required by state law
No, but recommended
Filed with the state
No, kept with your records
Governing law
Alabama Business and Nonprofit Entities Code (Title 10A)
What Alabama law says
Alabama does not require an operating agreement by law, but every LLC should have one. Without it, Alabama's default LLC rules decide how profits are split and what happens when a member leaves.
Alabama law calls it a limited liability company agreement and allows it to be oral, written or implied.
Alabama law calls the document a limited liability company agreement. Banks, lawyers and most people still say operating agreement; they mean the same thing.
Source: Alabama Business and Nonprofit Entities Code (Title 10A).
The agreement is not filed with the state. Your LLC is created by filing the Certificate of Formation with the Alabama Secretary of State, Business Services; the operating agreement is the private contract between the members that sits alongside it.
How it fits with your Alabama filings
The operating agreement stays private, but it has to agree with what is on the public record. If your Certificate of Formation says the LLC is manager-managed, the agreement should name the managers and say what they can decide.
Alabama has no annual report for LLCs; the yearly filing is the Business Privilege Tax return. When a member joins or leaves, or managers change, amend the agreement first, then update the state's records.
What to include in a Alabama operating agreement
- 01
Ownership
Each member, what they contributed and their percentage.
- 02
Profits and losses
How they are allocated and when money is distributed.
- 03
Management
Member-managed or manager-managed, matching your Certificate of Formation.
- 04
Decisions
Voting rights, and what needs a majority or everyone.
- 05
Transfers
Whether a member can sell their share, and to whom.
- 06
Leaving and closing
What happens when a member leaves, dies or the LLC closes.
Single-member or multi-member
Single-member: short and simple. Its main job is to show the LLC is separate from you: its own money, its own decisions, its own records. Banks often ask for it.
Multi-member: this is where the agreement earns its keep. Spell out ownership percentages, who decides what, how money comes out, and what happens if a member wants to leave. Most disputes between co-owners are about something the agreement did not say.
Create your Alabama operating agreement free
Our generator asks about your members, ownership and management, then writes a Alabama operating agreement you can download as a PDF. If you form your LLC with us, the agreement is included in the $399.
Related
Frequently asked questions
Is an operating agreement required in Alabama?
Alabama does not require an operating agreement by law, but every LLC should have one. Without it, Alabama's default LLC rules decide how profits are split and what happens when a member leaves. Alabama law calls it a limited liability company agreement and allows it to be oral, written or implied.
What is a Alabama limited liability company agreement?
It is what Alabama law calls an LLC operating agreement. The document and its purpose are the same: it sets out ownership, management and how the LLC is run.
Do I file my Alabama operating agreement with the state?
No. The Alabama Secretary of State, Business Services receives your Certificate of Formation, not the operating agreement. Every member signs the agreement and the LLC keeps it with its records.
Does a single-member Alabama LLC need an operating agreement?
It is worth having. It shows the LLC is a business separate from you, which supports your liability protection, and banks often ask for it when you open a business account.
Can I write my own Alabama operating agreement?
Yes. Use our free generator, choose Alabama, answer the questions and download the PDF. For investors, unusual profit splits or a dispute, have a lawyer review it.
Does a Alabama operating agreement need to be notarized?
No. Notarizing is not required. Every member signs it and keeps a copy.
