AL
Alabama Senate Bill SB104

Alabama 2022 Regular Session

Alabama Senate Bill SB104 Compare Versions

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11 1 SB104
2-2 216352-3
2+2 216352-1
33 3 By Senators Givhan and Smitherman
44 4 RFD: Fiscal Responsibility and Economic Development
55 5 First Read: 18-JAN-22
66
7-Page 0 SB104
8-1 SB104
9-2
10-3
11-4 ENROLLED, An Act,
12-5 Relating to business and nonprofit entities; to
13-6 amend Section 10A-2A-6.04, Code of Alabama 1975, to revise the
14-7 requirements for a corporation to issue or transfer fractional
15-8 stock; and to prohibit a corporation from issuing a
16-9 certificate representing scrip in bearer form.
17-10 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
18-11 Section 1. Section 1. Section 10A-2A-6.04, Code of
19-12 Alabama 1975, is amended to read as follows:
20-13 "§10A-2A-6.04.
21-14 "(a) A corporation may issue fractions of a share of
22-15 stock or in lieu of doing so may:
23-16 "(1) pay in cash the value of fractions of a share
24-17 of stock;
25-18 "(2) issue scrip in certificated or uncertificated
26-19 registered or bearer form entitling the holder to receive a
27-20 full share of stock upon surrendering enough scrip to equal a
28-21 full share of stock; or
29-22 "(3) arrange for disposition of fractional stock by
30-23 the holders of that stock.
31-24 "(b) Each certificate representing scrip must be
32-25 conspicuously labeled "scrip" and must contain the information
33-Page 1 SB104
34-1 required by Section 10A-1-3.42(c). A corporation shall not
35-2 issue a certificate representing scrip in bearer form. Within
36-3 a reasonable time after the issuance or transfer of scrip
37-4 without certificate, the corporation shall comply with the
38-5 notice requirements of Section 10A-1-3.45.
39-6 "(c) The holder of a fractional share of stock is
40-7 entitled to exercise the rights of a stockholder, including
41-8 the rights to vote, to receive dividends, and to receive
42-9 distributions upon dissolution. The holder of scrip is not
43-10 entitled to any of these rights unless the scrip provides for
44-11 them.
45-12 "(d) The board of directors may authorize the
46-13 issuance of scrip subject to any condition, including that:
47-14 "(1) the scrip will become void if not exchanged for
48-15 full stock before a specified date; and
49-16 "(2) the stock for which the scrip is exchangeable
50-17 may be sold and the proceeds paid to the scripholders."
51-18 Section 2. This act shall become effective on the
52-19 first day of the third month following its passage and
53-20 approval by the Governor, or its otherwise becoming law.
54-Page 2 SB104
55-1
7+Page 0 1 216352-1:n:01/13/2022:AP/bm LSA2022-141
568 2
579 3
5810 4
59-President and Presiding Officer of the Senate
60-
6111 5
62-6 Speaker of the House of Representatives
63-SB1047
64-8 Senate 08-FEB-22
65-9 I hereby certify that the within Act originated in and passed
66-10 the Senate.
67-11
68-12 Patrick Harris,
69-13 Secretary.
70-14
71-15
72-16
73-17 House of Representatives
74-18 Passed: 03-MAR-22
75-19
76-20
77-21 By: Senator Givhan
12+6
13+7
14+8 SYNOPSIS: Under existing law, a corporation in the
15+9 State of Alabama may issue fractions of a share of
16+10 stock in registered or bearer form. A scrip in
17+11 bearer form is a certificate representing a
18+12 fraction of a share of stock that is not registered
19+13 in the issuing corporation's books.
20+14 This bill would prohibit a corporation from
21+15 issuing scrip in bearer form, thereby requiring a
22+16 corporation to register all issued scrip of
23+17 fractional stock.
24+18 This bill would also provide that a
25+19 corporation that issues or transfers scrip in
26+20 uncertificated form shall comply with the
27+21 appropriate notice requirements.
28+22
29+23 A BILL
30+24 TO BE ENTITLED
31+25 AN ACT
32+26
33+Page 1 1 Relating to business and nonprofit entities; to
34+2 amend Section 10A-2A-6.04, Code of Alabama 1975, to revise the
35+3 requirements for a corporation to issue or transfer fractional
36+4 stock; and to prohibit a corporation from issuing a
37+5 certificate representing scrip in bearer form.
38+6 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
39+7 Section 1. Section 1. Section 10A-2A-6.04, Code of
40+8 Alabama 1975, is amended to read as follows:
41+9 "§10A-2A-6.04.
42+10 "(a) A corporation may issue fractions of a share of
43+11 stock or in lieu of doing so may:
44+12 "(1) pay in cash the value of fractions of a share
45+13 of stock;
46+14 "(2) issue scrip in certificated or uncertificated
47+15 registered or bearer form entitling the holder to receive a
48+16 full share of stock upon surrendering enough scrip to equal a
49+17 full share of stock; or
50+18 "(3) arrange for disposition of fractional stock by
51+19 the holders of that stock.
52+20 "(b) Each certificate representing scrip must be
53+21 conspicuously labeled "scrip" and must contain the information
54+22 required by Section 10A-1-3.42(c). A corporation shall not
55+23 issue a certificate representing scrip in bearer form. Within
56+24 a reasonable time after the issuance or transfer of scrip
57+25 without certificate, the corporation shall comply with the
58+26 notice requirements of Section 10A-1-3.45.
59+Page 2 1 "(c) The holder of a fractional share of stock is
60+2 entitled to exercise the rights of a stockholder, including
61+3 the rights to vote, to receive dividends, and to receive
62+4 distributions upon dissolution. The holder of scrip is not
63+5 entitled to any of these rights unless the scrip provides for
64+6 them.
65+7 "(d) The board of directors may authorize the
66+8 issuance of scrip subject to any condition, including that:
67+9 "(1) the scrip will become void if not exchanged for
68+10 full stock before a specified date; and
69+11 "(2) the stock for which the scrip is exchangeable
70+12 may be sold and the proceeds paid to the scripholders."
71+13 Section 2. This act shall become effective on the
72+14 first day of the third month following its passage and
73+15 approval by the Governor, or its otherwise becoming law.
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