1 SB96
2 208922-2
3 By Senators Givhan, Elliott, Jones and Singleton
4 RFD: Judiciary
5 First Read: 02-FEB-21
6 PFD: 01/27/2021
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1 SB96
2
3
4 ENROLLED, An Act,
5 Relating to the Alabama Business and Nonprofit
6 Entities Code; to amend Sections 10A-1-1.02, 10A-1-1.03, and
7 10A-1-4.02, as amended by Act 2020-73, 2020 Regular Session,
8 Code of Alabama 1975; to add Section 10A-1-5.18 to the Code of
9 Alabama 1975; to amend Sections 10A-2A-1.40 and 10A-2A-1.41,
10 as amended by Act 2020-73, 2020 Regular Session, Section
11 10A-2A-2.01, as added to the Code of Alabama 1975 by Act
12 2019-94, 2019 Regular Session, Sections 10A-2A-2.02 and
13 10A-2A-7.20, as amended by Act 2020-73, 2020 Regular Session,
14 Sections 10A-2A-8.30, 10A-2A-8.31, 10A-2A-8.42, 10A-2A-8.43,
15 10A-2A-8.59, 10A-2A-9.01, 10A-2A-10.06, 10A-2A-10.07,
16 10A-2A-10.08, 10A-2A-11.01, 10A-2A-13.01, and 10A-2A-16.01, as
17 added to the Code of Alabama 1975 by Act 2019-94, 2019 Regular
18 Session, and Section 10A-3-1.02, Code of Alabama 1975; to add
19 Section 10A-3-1.05 to the Code of Alabama 1975; to amend
20 Sections 10A-3-2.02, 10A-3-2.03, 10A-3-2.09, and 10A-3-2.21,
21 Section 10A-5A-1.02, as amended by Act 2018-125, 2018 Regular
22 Session, Sections 10A-5A-2.01, 10A-5A-2.02, and 10A-5A-7.02,
23 as amended by Act 2020-73, 2020 Regular Session, Section
24 10A-5A-7.04, Section 10A-5A-7.05, as amended by Act 2020-73,
25 2020 Regular Session, Sections 10A-5A-7.06, 10A-5A-7.07,
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1 10A-5A-11.10, and 10A-5A-11.12, Section 10A-5A-11.13, as
2 amended by Act 2020-73, 2020 Regular Session, Sections
3 10A-5A-11.14 and 10A-5A-11.15, Section 10A-8A-1.02, as amended
4 by Act 2019-304, 2019 Regular Session, Section 10A-8A-4.10, as
5 added to the Code of Alabama 1975 by Act 2018-125, 2018
6 Regular Session, Section 10A-8A-8.02, as amended by Act
7 2020-73, 2020 Regular Session, Section 10A-8A-8.06, as added
8 to the Code of Alabama by Act 2018-125, 2018 Regular Session,
9 Section 10A-8A-8.07, as amended by Act 2020-73, 2020 Regular
10 Session, Sections 10A-8A-8.09, 10A-8A-8.10, and 10A-8A-9.01,
11 as added to the Code of Alabama 1975 by Act 2018-125, 2018
12 Regular Session, Section 10A-9A-1.02, Sections 10A-9A-2.01 and
13 10A-9A-2.02, as amended by Act 2020-73, 2020 Regular Session,
14 Sections 10A-9A-4.06 and 10A-9A-4.07, Section 10A-9A-8.02, as
15 amended by Act 2020-73, 2020 Regular Session, Section
16 10A-9A-8.06, Section 10A-9A-8.07, as amended by Act 2020-73,
17 2020 Regular Session, and Sections 10A-9A-8.09, 10A-9A-8.10,
18 and 10A-9A-10.01, Code of Alabama 1975; to clarify the
19 relationship between the general provisions of Chapter 1 and
20 the other chapters contained within the Alabama Business and
21 Nonprofit Entities Code; and to amend Section 40-9-12, Code of
22 Alabama 1975, to revise the definition for certain nonprofit
23 entities exempt from taxation.
24 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
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1 Section 1. Sections 10A-1-1.02, 10A-1-1.03, and
2 10A-1-4.02, as amended by Act 2020-73, 2020 Regular Session,
3 of the Code of Alabama 1975, are amended to read as follows:
4 "10A-1-1.02.
5 "(a) All provisions of this chapter shall apply to
6 all entities formed pursuant to or governed by Chapters 2A to
7 11, inclusive, and Chapter 17, except to the extent, if any,
8 that any provision of this chapter is inconsistent with or as
9 otherwise provided by the provisions of this title or other
10 statutory or constitutional provisions specifically applicable
11 to the entity as set forth in this chapter and except as set
12 forth in subsections (c), (d), and (e).
13 "(b) The provisions of this chapter shall apply to
14 entities formed pursuant to or governed by Chapter 16, Chapter
15 20, and Chapter 30 only as provided therein or expressly
16 provided in this chapter.
17 "(c) If a provision of this chapter conflicts with a
18 provision in another chapter of this title, the provision of
19 the other chapter, to the extent of the conflict, supersedes
20 the provision of this chapter.
21 "(d) Provisions in another chapter may provide that
22 the provisions of this chapter do not apply by specifically
23 providing which provisions in this chapter do not apply.
24 "(e) Provisions in another chapter may provide that
25 the governing documents of an entity governed by that other
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1 chapter may supersede the provisions of this chapter by
2 specifically providing which provisions in this chapter may be
3 superseded by those governing documents.
4 "10A-1-1.03.
5 "(a) If a term, including a term that is defined in
6 subsection (b) of this section, is defined in a chapter of
7 this title, then, when used in that chapter, the term shall
8 have the meaning set forth in that chapter.
9 "(b) As used in this title, unless except as
10 provided in subsection (a) of this section or where the
11 context otherwise requires, the following terms mean:
12 "(1) AFFILIATE. A person who controls, is controlled
13 by, or is under common control with another person. An
14 affiliate of an individual includes the spouse, or a parent or
15 sibling thereof, of the individual, or a child, grandchild,
16 sibling, parent, or spouse of any thereof, of the individual,
17 or an individual having the same home as the individual, or a
18 trust or estate of which an individual specified in this
19 sentence is a substantial beneficiary; a trust, estate,
20 incompetent, conservatee, protected person, or minor of which
21 the individual is a fiduciary; or an entity of which the
22 individual is director, general partner, agent, employee or
23 the governing authority or member of the governing authority.
24 "(2) ASSOCIATE. When used to indicate a relationship
25 with:
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1 "(A) a domestic or foreign entity for which the
2 person is:
3 "(i) an officer or governing person; or
4 "(ii) a beneficial owner of 10 percent or more of a
5 class of voting ownership interests or similar securities of
6 the entity;
7 "(B) a trust or estate in which the person has a
8 substantial beneficial interest or for which the person serves
9 as trustee or in a similar fiduciary capacity;
10 "(C) the person's spouse or a relative of the person
11 related by consanguinity or affinity within the fifth degree
12 who resides with the person; or
13 "(D) a governing person or an affiliate or officer
14 of the person.
15 "(3) ASSOCIATION. Includes, but is not limited to,
16 an unincorporated nonprofit association as defined in Chapter
17 17 and an unincorporated professional association as defined
18 in Article 1 of Chapter 30.
19 "(4) BENEFIT CORPORATION. A benefit corporation as
20 defined in Chapter 2A.
21 "(5) BUSINESS CORPORATION. A corporation or foreign
22 corporation as defined in Chapter 2A. The term includes a
23 benefit corporation as defined in Chapter 2A.
24 "(6) BUSINESS TRUST. A business trust as defined in
25 Chapter 16.
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1 "(7) CERTIFICATE OF DISSOLUTION. Any document such
2 as a certificate of dissolution, statement of dissolution, or
3 articles of dissolution, required or permitted to be filed
4 publicly with respect to an entity's dissolution and winding
5 up of its business, activity, activities, not for profit
6 activity, or affairs.
7 "(8) CERTIFICATE OF FORMATION.
8 "(A) The document required to be filed publicly
9 under this title to form a filing entity; and
10 "(B) if appropriate, a restated certificate of
11 formation and all amendments of an original or restated
12 certificate of formation.
13 "(9) CERTIFICATE OF OWNERSHIP. An instrument
14 evidencing an ownership interest or membership interest in an
15 entity.
16 "(10) CERTIFICATED OWNERSHIP INTEREST. An ownership
17 interest of a domestic entity represented by a certificate.
18 "(11) CERTIFICATION or CERTIFIED. Duly authenticated
19 by the proper officer or filing officer of the jurisdiction
20 the laws of which govern the internal affairs of an entity.
21 "(12) CONTRIBUTION. A tangible or intangible benefit
22 that a person transfers to an entity in consideration for an
23 ownership interest in the entity or otherwise in the person's
24 capacity as an owner or a member. A benefit that may
25 constitute a contribution transferred in exchange for an
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1 ownership interest or transferred in the transferor's capacity
2 as an owner or member may include cash, property, services
3 rendered, a contract for services to be performed, a
4 promissory note or other obligation of a person to pay cash or
5 transfer property to the entity, or securities or other
6 interests in or obligations of an entity. In either case, the
7 benefit does not include cash or property received by the
8 entity:
9 "(A) with respect to a promissory note or other
10 obligation to the extent that the agreed value of the note or
11 obligation has previously been included as a contribution; or
12 "(B) that the person intends to be a loan to the
13 entity.
14 "(13) CONVERSION. A conversion, whether referred to
15 as a conversion, domestication, or otherwise, means:
16 "(A) the continuance of a domestic entity as a
17 foreign entity of any type;
18 "(B) the continuance of a foreign entity as a
19 domestic entity of any type; or
20 "(C) the continuance of a domestic entity of one
21 type as a domestic entity of another type.
22 "(14) CONVERTED ENTITY. An entity resulting from a
23 conversion.
24 "(15) CONVERTING ENTITY. An entity as the entity
25 existed before the entity's conversion.
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1 "(16) COOPERATIVE. Includes an employee cooperative
2 as defined in Chapter 11.
3 "(17) CORPORATION. Includes a domestic or foreign
4 business corporation, including a benefit corporation, as
5 defined in Chapter 2A, a domestic or foreign nonprofit
6 corporation as defined in Chapter 3, a domestic or foreign
7 professional corporation as defined in Chapter 4, and those
8 entities specified in Chapter 20 as corporate.
9 "(18) COURT. The designated court, and if none, the
10 circuit court specifically set forth in this title, and if
11 none, any other court having jurisdiction in a case.
12 "(19) DAY. When used in the computation of time,
13 excludes the first day and includes the last day of the period
14 so computed, unless the last day is a Saturday, Sunday, or
15 legal holiday, in which event the period runs until the end of
16 the next day that is not a Saturday, a Sunday, or a legal
17 holiday. When the period of time to be computed is less than 7
18 days, intermediate Saturdays, Sundays, and legal holidays
19 shall be excluded.
20 "(20) DEBTOR IN BANKRUPTCY. A person who is the
21 subject of:
22 "(A) an order for relief under the United States
23 bankruptcy laws, Title 11, United States Code, or comparable
24 order under a successor statute of general application; or
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1 "(B) a comparable order under federal, state, or
2 foreign law governing insolvency.
3 "(21) DESIGNATED COURT. The court or courts that are
4 designated in the (i) certificate of incorporation or bylaws
5 of a corporation as authorized by Chapter 2A, (ii) limited
6 liability company agreement of a limited liability company
7 formed pursuant to or governed by Chapter 5A, (iii)
8 partnership agreement of a partnership formed pursuant to or
9 governed by Chapter 8A, or (iv) limited partnership agreement
10 of a limited partnership formed pursuant to or governed by
11 Chapter 9A.
12 "(22) DIRECTOR. An individual who serves on the
13 board of directors, by whatever name known, of a foreign or
14 domestic corporation.
15 "(23) DISTRIBUTION. A transfer of property,
16 including cash, from an entity to an owner or member of the
17 entity in the owner's or member's capacity as an owner or
18 member. The term includes a dividend, a redemption or purchase
19 of an ownership interest, or a liquidating distribution.
20 "(24) DOMESTIC. With respect to an entity, means
21 governed as to its internal affairs by this title.
22 "(25) DOMESTIC ENTITY. An entity governed as to its
23 internal affairs by this title.
24 "(26) EFFECTIVE DATE OF THIS TITLE. January 1, 2011.
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1 "(27) ELECTRONIC. Relating to technology having
2 electrical, digital, magnetic, wireless, optical,
3 electromagnetic, or similar capabilities.
4 "(28) ELECTRONIC SIGNATURE. An electronic signature
5 as that term is defined in the Alabama Electronic Transactions
6 Act, Chapter 1A of Title 8, or any successor statute.
7 "(29) ELECTRONIC TRANSMISSION or ELECTRONICALLY
8 TRANSMITTED. Any form or process of communication not directly
9 involving the physical transfer of paper or another tangible
10 medium, which (i) is suitable for the retention, retrieval,
11 and reproduction of information by the recipient, and (ii) is
12 retrievable in paper form by the recipient through an
13 automated process used in conventional commercial practice.
14 "(30) ELECTRONIC WRITING. Information that is stored
15 in an electronic or other nontangible medium and is
16 retrievable in paper form through an automated process used in
17 conventional commercial practice.
18 "(31) ENTITY. A domestic or foreign organization.
19 "(32) FILING ENTITY. A domestic entity that is a
20 corporation, limited partnership, limited liability limited
21 partnership, limited liability company, professional
22 association, employee cooperative corporation, or real estate
23 investment trust.
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1 "(33) FILING INSTRUMENT. An instrument, document, or
2 statement that is required or permitted by this title to be
3 delivered for filing by or for an entity to a filing officer.
4 "(34) FILING OFFICER. An officer of this state with
5 whom a filing instrument is required or permitted to be
6 delivered for filing pursuant to this title.
7 "(35) FOREIGN. With respect to an entity, means
8 governed as to its internal affairs by the laws of a
9 jurisdiction other than this state.
10 "(36) FOREIGN ENTITY. An entity governed as to its
11 internal affairs by the laws of a jurisdiction other than this
12 state.
13 "(37) FOREIGN FILING ENTITY. A foreign entity that
14 registers or is required to register as a foreign entity under
15 Article 7.
16 "(38) FOREIGN GOVERNMENTAL AUTHORITY. A governmental
17 official, agency, or instrumentality of a jurisdiction other
18 than this state.
19 "(39) FOREIGN NONFILING ENTITY. A foreign entity
20 that is not a foreign filing entity.
21 "(40) GENERAL PARTNER.
22 "(A) Each partner in a general partnership; or
23 "(B) a person who is admitted to a limited
24 partnership as a general partner in accordance with the
25 governing documents of the limited partnership.
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1 "(41) GENERAL PARTNERSHIP. A partnership as defined
2 in Chapter 8A. The term includes a limited liability
3 partnership as defined in Chapter 8A.
4 "(42) GOVERNING AUTHORITY. A person or group of
5 persons who are entitled to manage and direct the affairs of
6 an entity pursuant to this title and the governing documents
7 of the entity, except that if the governing documents of the
8 entity or this title divide the authority to manage and direct
9 the affairs of the entity among different persons or groups of
10 persons according to different matters, governing authority
11 means the person or group of persons entitled to manage and
12 direct the affairs of the entity with respect to a matter
13 under the governing documents of the entity or this title. The
14 term includes the board of directors of a corporation, by
15 whatever name known, or other persons authorized to perform
16 the functions of the board of directors of a corporation, the
17 general partners of a general partnership or limited
18 partnership, the persons who have direction and oversight of a
19 limited liability company, and the trust managers of a real
20 estate investment trust. The term does not include an officer
21 who