A limited liability company’s operating agreement or company agreement is similar to a corporation’s shareholder agreement, and provides for the management of the LLC, and the rights and duties of the owners of the LLC (members) and the managers of the LLC, if any.

Specifically, the LLC operating agreement should address the company’s finances, capital contributions, percentages of ownership, voting rights, meetings, notices, buyouts, distribution of profits and losses, officers, and other matters. Limited liability companies generally may be managed by the members or by appointed or elected managers.

In Alabama, a limited liability company (LLC) is governed by the Alabama Limited Liability Company Law. The operating agreement is a key document for an LLC as it outlines the company's structure and the rules for its operation. While not required by state law, it is highly recommended to have one to provide clear guidance on the management of the LLC, and the rights and duties of members and managers. The operating agreement should cover aspects such as the company's finances, capital contributions, ownership percentages, voting rights, procedures for meetings and notices, buyout provisions, and the distribution of profits and losses. It should also detail the roles of officers and the management structure, indicating whether the LLC will be member-managed or manager-managed. Without an operating agreement, the default provisions of Alabama state law will apply, which may not align with the members' intentions. Therefore, drafting a comprehensive operating agreement is beneficial for providing clarity and avoiding potential disputes among members.