Alabama LLC Operating Agreement

Single-member or multi-member operating agreement under your state's LLC act: ownership, management, capital, distributions, transfers and dissolution.

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Alabama rules that this document follows

LLC statuteAlabama Limited Liability Company Law of 2014Source: Ala. Code § 10A-5A-1.01 et seq.
Operating agreement required?Not required by statute, but strongly recommended (may be oral; written is far safer)Source: Ala. Code § 10A-5A-1.08 (LLC agreement may be oral, implied, in a record, or any combination)
Formation fee$200.00
Annual report$50.00 — Business Privilege Tax return (Form PPT) due with the entity's income-tax return (Mar. 15 partnership / Apr. 15 disregarded SMLLC); no separate SOS annual reportSource: Ala. Code § 40-14A-22 (minimum $50; entities owing ≤ $100 exempt from 2024)
State LLC / franchise taxBusiness Privilege Tax: $0.25-$1.75 per $1,000 of net worth, minimum $50 (waived if ≤ $100)
Charging order exclusive remedy (SMLLC)unclearSource: Ala. Code §§ 10A-5A-4.04 (majority of members), 10A-5A-4.06 (distributions per agreed value of contributions), 10A-5A-5.03 (charging order)

Rules current as of 2026-09-07. Statutes change; verify before relying on them.

How to use this LLC Operating Agreement in Alabama

Sign the agreement as soon as the LLC is formed and before opening the bank account. Fill Schedule A with actual contributions — the percentages drive profits, votes and buy-outs. Multi-member LLCs should agree on the buy-out formula now, while everyone is friendly.

Review annually and whenever a member joins, leaves, marries, or the tax election changes. Keep it with the articles, EIN letter and annual report receipts.

Frequently asked questions

Is an operating agreement required in Alabama?

Not by statute (Ala. Code § 10A-5A-1.08 (LLC agreement may be oral, implied, in a record, or any combination)). Banks, investors and courts expect a written agreement, and a single-member LLC without one is easier to pierce.

What are the ongoing state fees for an LLC in Alabama?

Annual/periodic report: $50.00 (Business Privilege Tax return (Form PPT) due with the entity's income-tax return (Mar. 15 partnership / Apr. 15 disregarded SMLLC); no separate SOS annual report; Ala. Code § 40-14A-22 (minimum $50; entities owing ≤ $100 exempt from 2024)). Business Privilege Tax: $0.25-$1.75 per $1,000 of net worth, minimum $50 (waived if ≤ $100).

Does the operating agreement get filed with the state?

No. It is an internal document. Keep the signed original with the Company records; banks and the IRS may ask for a copy.

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FormsByState provides self-help document templates and general information, not legal advice. We are not a law firm. For advice about your situation consult a licensed attorney in your state.