Alabama LLC Operating Agreement

Key Takeaways

• Alabama law does not mandate an LLC to have an operating agreement.
• Creating one helps you define the internal operations, ownership structure, and member responsibilities, reducing potential conflicts. Use our free Alabama LLC Operating Agreement template to comply with the state laws.
• Forming an LLC in Alabama involves filing Articles of Organization with the Secretary of State, designating a registered agent, and paying the required filing fee.

Alabama LLC Operating Agreement Templates by Type

Single Member LLC

Single Member LLC Operating Agreement Template

Used 4,920 times

Are you required to uphold your limited liability corporation status in accordance with state law? If the business is sued, the owner’s assets may be safeguarded by this agreement.

Use Single Member LLC Operating Agreement Template

Use this operating agreement template in Alabama when there is only one owner of the LLC.

Multi Member LLC

Multi-Member LLC Operating Agreement Template

Used 4,872 times

Ensure that your newly formed LLC is run the right way by having a multi-member operating agreement in place.

Use Multi-Member LLC Operating Agreement Template

Utilize this operating agreement template in Alabama when multiple individuals or entities co-own the LLC.

50/50 LLC

50/50 LLC Operating Agreement Template

Used 4,872 times

This free 50/50 LLC Operating Agreement template for businesses with equal ownership.

Use 50/50 LLC Operating Agreement Template

Employ this operating agreement template in Alabama when two equal partners equally share ownership and management responsibilities within the LLC.

Member-managed LLC

Member-Managed LLC Operating Agreement Template

Used 4,919 times

A manager is chosen by the firm owners to oversee day-to-day operations in a manager-managed LLC. Use this Member-Managed LLC Operating Agreement Template right away.

Use Member-Managed LLC Operating Agreement Template

Opt for this operating agreement template in Alabama when the LLC’s management responsibilities are delegated to appointed members.

Legal Requirements

While it’s not a legal necessity under Alabama law (§ 10A-5A-1.08), an operating agreement is crucial for single-member LLCs to maintain their corporate shield and establish ownership. For multi-member LLCs, an operating agreement is essential to provide operational guidance, define voting rights, and outline contributions.

How to Form LLC in Alabama

Establishing a Limited Liability Company (LLC) in Alabama requires a series of actions. Here’s a simple guide to navigating through the process.

1. Choose a Name for Your LLC: The first step is to select a unique name for your LLC. The selected name for your entity should incorporate the phrase “Limited Liability Company” or a shortened form such as “LLC.”
2. Reserve Your Business Name: After choosing a name, you must ensure it’s available in Alabama. You can check the Secretary of State’s Government Records Inquiry System. You must file a Name Reservation Request form if the name is available.
3. Assign a Registered Agent: A registered agent is responsible for receiving and handling important legal documents on behalf of your LLC. You can be your agent as long as you are 18, have a physical Alabama address, and are available during business hours.
4. File Your LLC Certificate of Formation: This involves filing the original and one copy of the Certificate of Formation with the Secretary of State. The filing fee for domestic LLCs is $200.
5. Create Your Alabama LLC Operating Agreement: This legal document outlines your LLC’s operational procedures.
6. Apply and receive an EIN: If you’re running a business with employees, you’ll need to apply for an IRS Federal Employer Identification Number (EIN) through the IRS website. This also applies if your LLC has multiple members. So, ensure to comply with all federal tax withholding regulations.
7. Apply for a Business and Tax Account: After establishing your LLC in Alabama, fulfill state and federal obligations. Then, determine the necessary tax accounts at the federal, state, and county levels. You also need to submit an Initial Business Privilege Tax Return within 2.5 months of forming your LLC. Finally, a business privilege license from the Alabama Department of Revenue is required. 

Depending on your business type, you might need to secure licenses, permits, or registrations at the local, state, or national levels. It’s advisable to consult with the appropriate regulatory bodies to ensure your business adheres to all necessary rules and requirements.

Alabama LLC Laws

• Understanding the Challenges of Forming an LLC: LLCs have two main advantages: tax benefits and liability protection. As pass-through entities, LLCs have a lower tax burden than traditional corporations. LLCs also protect personal assets against business debts and liabilities. However, knowing the potential drawbacks specific to your business situation is important.
• Registering Your LLC with the State of Alabama: Registration involves several steps, including choosing a unique business name that reflects the nature of your business while being easy to remember and spell. A certificate of formation must be submitted to the state authorities. Each state has its rules, so you’ll need to keep them in mind as you get your LLC up and running.
• Obtaining Licenses and Permits: Depending on your type of business, you might need to secure licenses, permits, or registrations at local, state, or national levels. It’s advisable to consult with the appropriate regulatory bodies to ensure your business adheres to all necessary rules and requirements.
• Important Legal and Tax Considerations: Several legal and tax considerations must be considered when forming an LLC. These may include issues related to employment law, contract law, tax law, and more.
• Maintaining Compliance with State Regulations: Once your LLC is established, it’s essential to maintain compliance with state regulations. This can involve filing annual reports, paying necessary taxes, and more.