Alabama: LLC Operating Agreement Requirements
The short answer
Alabama law says a domestic LLC's limited liability company agreement shall be entered into, but it may be written, oral, or implied and may be adopted before, at, or after the certificate filing; the statute states no separate deadline or invalidity penalty. A sole member may have an enforceable agreement, the LLC and later members are bound without separate assent, and the Act supplies member-direction, per-capita voting, equal-distribution, unanimous-admission, and economic-only transfer defaults. Through July 31, 2026, members may inspect company records on 10 days' written notice for a proper purpose; an enacted change effective August 1 creates separate 10- and 30-day tracks and additional demand, redaction, denial, and enforcement rules.
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This is the general rule in Alabama. Ezel applies current Alabama law to your specific facts and answers with citations to the statutes.
| Governing law and document name | Alabama Limited Liability Company Law of 2014; 'limited liability company agreement,' including an operating agreement (§§ 10A-5A-1.01, -1.02(l)) |
|---|---|
| Required or optional | Required in statutory wording: an agreement 'shall be entered into,' but no separate deadline, invalidity consequence, or dissolution penalty is stated (§ 10A-5A-2.01(d)) |
| Permitted form and signatures | Written, oral, or implied; no general LLC-Act signature, witness, acknowledgment, or notary rule. Duty or liability changes require a written agreement (§§ 10A-5A-1.02(l), -1.08(b)) |
| Adoption timing and effect | May be entered before, at, or after certificate filing and made effective as of filing or another agreement-stated time; preformation terms become the agreement on formation (§§ 10A-5A-1.09(c), -2.01(d)) |
| Single member and assent | Sole-member agreement enforceable; LLC is bound without manifested assent, and an admitted member becomes a party and assents (§§ 10A-5A-1.02(l), -1.09) |
| Management and authority defaults | Agreement may choose members, managers, or another structure; otherwise members direct and oversee. Ordinary matters need a majority of members, outside-course acts need all; title alone does not create binding authority (§§ 10A-5A-3.02, -4.07) |
| Voting, economic, and transfer defaults | Per-capita majority for ordinary matters; equal pre-dissolution distributions; admission by agreement or all-member consent; transferee receives distributions, not direction, oversight, or records rights (§§ 10A-5A-4.01, -4.05, -4.07, -5.02) |
| Nonwaivable rules and duties | Written agreement may expand, restrict, or eliminate duties and liability, but not the good-faith covenant or bad-faith-violation liability; outsider rights, judicial dissolution, winding up, and specified statutory protections remain (§ 10A-5A-1.08(b)–(c)) |
| Amendment, filing, and records | Agreement method controls; otherwise amendment is unanimous. Agreement controls internally, effective filed writing controls relying outsiders. Keep the effective agreement and listed records; inspection procedure changes August 1, 2026 (§§ 10A-5A-1.10, -4.07, -4.09) |
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Requirements one by one
Alabama requires an agreement but does not require a signed paper document
Alabama Code § 10A-5A-2.01(d) says a limited liability company agreement “shall be entered into.”
The same sentence allows it before, at, or after filing the certificate of formation. The Act states
no separate deadline, invalidity consequence, or dissolution penalty for failing to document one by
a particular date.
The agreement may be written, oral, or implied under § 10A-5A-1.02(l). Chapter 10A-5A imposes no
general signature, witness, acknowledgment, or notary condition. A separate transaction may still
need a signed or recorded writing under other law. Changes to duties or liability under § 1.08(b)
must be in a written agreement.
Preformation and sole-member terms take effect on formation
Section 10A-5A-1.09 permits prospective members to agree that their terms will become the LLC
agreement when the company forms. One prospective member may do the same. The LLC is then bound
without separately manifesting assent, and a person admitted later becomes a party and assents.
The agreement may state an effective time as of the certificate filing or another time. It cannot
make the LLC a legal entity before the certificate itself becomes effective under § 2.01(b).
Members direct the company unless the agreement chooses another structure
Section 10A-5A-4.07 lets the agreement place direction and oversight with members, one or more
managers, or another governance structure. If it says nothing, the members direct and oversee.
Ordinary-course matters default to a majority of members, while an agreement amendment and an act
outside the ordinary course require every member's consent.
Alabama does not give every member or manager automatic agency power merely from the title.
Section 10A-5A-3.02 requires authority under the agreement, the listed statutory governance or
winding-up provisions, or other law before a person can bind the LLC.
Equal distributions and economic-only transfers are the defaults
Before dissolution, § 10A-5A-4.05 defaults distributions to equal shares. After formation, a new
member is admitted as the agreement provides or, if it supplies no route, with all members' consent.
A sole member may be admitted without making a contribution or acquiring a transferable interest.
Section 10A-5A-5.02 separates economics from governance. A transferee receives the transferred
distribution right but does not thereby receive direction, oversight, or records access. Since
August 1, 2025, an agreement may also create a transfer-at-death mechanism subject to charging
orders and creditor rights.
Written terms can alter duties, but the contract has statutory floors
People with direction and oversight owe loyalty and a care duty measured by gross negligence,
recklessness, intentional misconduct, or knowing law violations under § 10A-5A-4.08. A member
without that authority principally owes the good-faith covenant and a duty not to misuse company
information merely by being a member.
A written agreement may expand, restrict, or eliminate duties and liability. It cannot eliminate
the implied contractual covenant of good faith and fair dealing or liability for a bad-faith
violation. It also cannot impair statutory rights of outsiders or remove the court's specified
judicial-dissolution power and the statutory winding-up requirement.
The records-demand procedure changes on August 1, 2026
Through July 31, § 10A-5A-4.09 requires the LLC to maintain its member list, formation filings,
three years of tax returns and financial statements, and the effective agreement and amendments.
A member may inspect the listed records and other books and records on 10 days' written notice for
a proper purpose, subject to reasonable restrictions and confidentiality protections.
Starting August 1, 2026, enacted HB 248 keeps 10 days for the required subsection (a) records but
uses 30 days for other books and records. It also requires written authority when an agent or
attorney will inspect, permits purpose-based redaction and a two-year improper-use denial, narrows
“proper purpose” for specified adversarial proceedings, and creates expedited court enforcement
with expense-shifting rules.
Amendment of the private agreement is distinct from a public filing
If the agreement states an amendment method, § 10A-5A-1.10 requires that method. Otherwise,
§ 10A-5A-4.07 defaults amendment to every member's consent. The agreement itself is not the public
formation filing.
If an effective filed writing conflicts with the agreement, the agreement controls members,
dissociated members, and transferees. The filed writing controls other people to the extent they
reasonably rely on it. The current effective agreement and its amendments must remain in the LLC's
records.
Practical effects
- Do not read “written, oral or implied” as “optional.” Alabama separately says the agreement
“shall be entered into.” - State the governance structure and authority chain expressly; a management title alone does not
automatically bind the LLC. - Replace equal distributions, per-capita ordinary voting, unanimous major-action approvals, and
economic-only transfer defaults deliberately rather than assuming percentage ownership does so. - Use a written agreement for any duty or liability modification and preserve the good-faith floor.
- Update records-demand language for the August 1, 2026 transition instead of carrying forward a
single 10-day period for every category of records.
Statutes and sources
- Ala. Code § 10A-5A-1.01, § 10A-5A-1.02(l), §§ 10A-5A-1.09 to -1.10. Act name,
agreement definition and form, sole-member validity, preformation effect, assent, amendment,
and filed-writing conflicts. Official 2014 HB 2 enactment
and official 2025 HB 200 amendment
(accessed July 26, 2026). - Ala. Code § 10A-5A-1.08(a)–(c), §§ 10A-5A-2.01(b), (d)–(e), and
10A-5A-3.02. Agreement scope and limits, required timing, formation, filing, and authority.
Official 2024 SB 112 amendment
(accessed July 26, 2026). - Ala. Code §§ 10A-5A-4.01, -4.05, § 10A-5A-4.07(a)–(c), and
§ 10A-5A-4.08(a), (d)–(g). Admission, equal distributions, governance, voting, and duties.
Official 2014 HB 2 enactment
(accessed July 26, 2026). - Ala. Code § 10A-5A-5.02(a)–(b), (g), §§ 10A-5A-7.01 and -9.01. Transfer
effects, transfer at death, dissolution, and direct actions. Official 2014 HB 2 enactment
and official 2025 HB 200 amendment
(accessed July 26, 2026). - Ala. Code § 10A-5A-4.09(a)–(g); 2026 HB 248. Records retained and the
inspection procedures through July 31 and beginning August 1, 2026. Retired official ALISON
section via Internet Archive
and official enrolled HB 248
(accessed July 26, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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