HB267 is a comprehensive bill that revises the Alabama Nonprofit Corporation Law to align with the Model Nonprofit Corporation Act of 2021 and the Delaware General Corporation Law. It introduces a new Chapter 3A to Title 10A of the Code of Alabama 1975 and makes conforming changes throughout the Alabama Business and Nonprofit Entity Code. The bill includes key insertions such as the establishment of the Alabama Nonprofit Corporation Law, definitions pertinent to nonprofit corporations, and provisions for the management and oversight of nonprofit activities and affairs. It also specifies the application of the chapter to all nonprofit corporations organized under the new or previous laws, as well as foreign nonprofit corporations conducting affairs in Alabama. The bill outlines the rights and privileges of nonprofit corporations, including the YMCA of Mobile, and defines terms such as "certificate of incorporation," "board of directors," "bylaws," "distribution," and "fundamental transaction."

The bill also addresses defective corporate actions, stating that they shall not be void or voidable if ratified or validated in accordance with specified sections. It clarifies that ratification or validation is not the exclusive means of ratifying or validating a defective corporate action, and the absence or failure of ratification does not affect the validity or effectiveness of any corporate action properly ratified under common law. The bill outlines the process for ratifying defective corporate actions, including the requirements for board of directors' action and member approval. It also details the requirements for filing a certificate of validation with the Secretary of State, including the name of the nonprofit corporation, the unique identifying number, the nature of the defective corporate action, and a statement that the action was ratified in accordance with the relevant section. The bill provides for judicial proceedings to determine the validity of corporate actions or ratifications and sets a 120-day period for claims challenging the effectiveness of a ratification to be brought after the validation effective time.

Statutes affected:
Introduced: 10A-1-1, 10A-1-1, 10A-1-3, 10A-1-8, 10A-1-8, 10A-1-9, 10A-2A-1, 10A-2A-1, 10A-2A-1, 10A-2A-2, 10A-2A-2, 10A-2A-7, 10A-2A-7, 10A-2A-7, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-10, 10A-2A-10, 10A-2A-10, 10A-2A-11, 10A-2A-11, 10A-2A-12, 10A-2A-14
Engrossed: 10A-1-1, 10A-1-1, 10A-1-3, 10A-1-8, 10A-1-8, 10A-1-9, 10A-2A-1, 10A-2A-1, 10A-2A-1, 10A-2A-2, 10A-2A-2, 10A-2A-7, 10A-2A-7, 10A-2A-7, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-10, 10A-2A-10, 10A-2A-10, 10A-2A-11, 10A-2A-11, 10A-2A-12, 10A-2A-14
Enrolled: 10A-1-1, 10A-1-1, 10A-1-3, 10A-1-8, 10A-1-8, 10A-1-9, 10A-2A-1, 10A-2A-1, 10A-2A-1, 10A-2A-2, 10A-2A-2, 10A-2A-7, 10A-2A-7, 10A-2A-7, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-8, 10A-2A-10, 10A-2A-10, 10A-2A-10, 10A-2A-11, 10A-2A-11, 10A-2A-12, 10A-2A-14