Bill > SB187

This bill amends various sections of the Alabama Business and Nonprofit Entities Code to clarify procedures, make technical corrections, and codify common law, aiming to make the laws governing domestic entities clearer and more comprehensible. Key changes include refining the definition of a "disinterested person" in business transactions, clarifying that state law governs the formation and internal affairs of domestic entities, and specifying what constitutes "internal affairs" for entities. The bill also updates rules regarding the inspection of books and records by owners and members, including requirements for proper purpose and good faith, and introduces provisions for correcting or nullifying filed instruments. It further clarifies requirements for registered agents, ensuring they cannot operate solely through virtual offices or mail forwarding services. For corporations, the bill revises rules on corporate opportunities, director and officer liability, and the conditions under which contracts and transactions involving directors or officers are not voidable. It also introduces new provisions for controlling stockholder transactions and going private transactions, and clarifies the process for dissolving corporations. For nonprofit corporations, the bill introduces similar clarifications regarding corporate opportunities, director and officer liability, and defines terms like "conflicting interest transaction" and "controlling person." It also explicitly prohibits derivative actions in nonprofit corporations and clarifies the conditions for approving acts or transactions involving membership and non-membership nonprofit corporations. Finally, the bill repeals and incorporates provisions related to financial statements for stockholders and members, and sets an effective date of August 1, 2026, with no retroactive application to civil actions completed or pending before that date.

Business and Industry

https://alison.legislature.state.al.us/bill-search