Alabama 2023 Regular Session

Alabama Senate Bill SB245 Compare Versions

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1	1	SB245INTRODUCED
2	2	Page 0
3	3	AY49Q7-1
4	4	By Senator Givhan
5	5	RFD: Judiciary
6	6	First Read: 25-Apr-23
7	7	2023 Regular Session
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13	13	6 AY49Q7-1 04/03/2023 KMS (L) cr 2023-1323
14	14	Page 1
15	15	SYNOPSIS:
16	16	This bill would make changes to the Alabama
17	17	Business and Nonprofit Entity Code by revising the
18	18	Alabama Nonprofit Corporation Law to reflect the
19	19	national standards set by the Model Nonprofit
20	20	Corporation Act of 2021 and the Delaware General
21	21	Corporation Law, and would make conforming changes
22	22	throughout the Alabama Business and Nonprofit Entity
23	23	Code in order to effectuate the changes to the Alabama
24	24	Nonprofit Corporation Law and conform with the other
25	25	entities governed by the Alabama Business and Nonprofit
26	26	Entity Code.
27	27	A BILL
28	28	TO BE ENTITLED
29	29	AN ACT
30	30	Relating to the Alabama Business and Nonprofit Entity
31	31	Code; to add Chapter 3A to Title 10A, Code of Alabama 1975, by
32	32	revising the Alabama Nonprofit Corporation Law to reflect the
33	33	national standards set by the Model Nonprofit Corporation Act
34	34	of 2021 and the Delaware General Corporation Law; and to make
35	35	conforming changes throughout the Alabama Business and
36	36	Nonprofit Entity Code in order to effectuate the changes to
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66	66	the Alabama Nonprofit Corporation Law and conform with the
67	67	other entities governed by the Alabama Business and Nonprofit
68	68	Entity Code by amending Sections 10A-1-1.03, 10A-1-1.08,
69	69	10A-1-3.32, 10A-1-8.01, 10A-1-8.02, 10A-1-9.01, 10A-2A-1.40,
70	70	10A-2A-1.43, 10A-2A-1.51, 10A-2A-2.02, 10A-2A-2.06,
71	71	10A-2A-7.04, 10A-2A-7.20, 10A-2A-7.32, 10A-2A-8.10,
72	72	10A-2A-8.21, 10A-2A-8.22, 10A-2A-8.24, 10A-2A-10.06,
73	73	10A-2A-10.07, 10A-2A-10.08, 10A-2A-11.02, 10A-2A-11.06,
74	74	10A-2A-12.02, and 10A-2A-14.13, Code of Alabama 1975; adding
75	75	Sections 10A-2A-10.00 and 10A-2A-10.10 to the Code of Alabama
76	76	1975; and amending Sections 10A-5A-2.03, 10A-5A-10.07,
77	77	10A-8A-9.08, 10A-9A-2.02, and 10A-9A-10.08, Code of Alabama
78	78	1975.
79	79	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
80	80	Section 1. A new Chapter 3A is added to Title 10A of
81	81	the Code of Alabama 1975, to read as follows:
82	82	CHAPTER 3A. ALABAMA NONPROFIT CORPORATION LAW.
83	83	ARTICLE 1. GENERAL PROVISIONS.
84	84	DIVISION A. SHORT TITLE AND SAVINGS PROVISIONS.
85	85	§10A-3A-1.01. Short title and application of chapter.
86	86	(a) This chapter and the provisions of Chapter 1 to the
87	87	extent applicable to nonprofit corporations may be cited as
88	88	the Alabama Nonprofit Corporation Law.
89	89	(b) The provisions of this chapter relating to
90	90	nonprofit corporations shall apply to:
91	91	(1) All nonprofit corporations organized hereunder; and
92	92	(2) All nonprofit corporations heretofore organized
93	93	under any act hereby or heretofore repealed, for a purpose or
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123	123	purposes for which a nonprofit corporation might be organized
124	124	under this chapter.
125	125	(c) The provisions of this chapter relating to foreign
126	126	nonprofit corporations shall apply to all foreign nonprofit
127	127	corporations conducting affairs in Alabama for a purpose or
128	128	purposes for which a nonprofit corporation might be organized
129	129	under this chapter.
130	130	(d) Beginning May 1, 2004, the Young Men's Christian
131	131	Association (YMCA) of Mobile which was incorporated by Act 405
132	132	approved on February 18, 1895, shall be subject to this
133	133	chapter. Prospectively from May 1, 2004, the YMCA of Mobile
134	134	shall be entitled to all of the rights and privileges of a
135	135	nonprofit corporation including, but not limited to, the right
136	136	to amend its charter and bylaws as provided by this chapter.
137	137	§10A-3A-1.02. Chapter definitions.
138	138	As used in this chapter, unless otherwise specified or
139	139	unless the context otherwise requires, the following terms
140	140	have the following meanings:
141	141	(1) CERTIFICATE OF INCORPORATION means the certificate
142	142	of incorporation described in Section 10A-3A-2.02, all
143	143	amendments to the certificate of incorporation, and any other
144	144	documents permitted or required to be delivered for filing by
145	145	a nonprofit corporation with the Secretary of State under this
146	146	chapter or Chapter 1 that modify, amend, supplement, restate,
147	147	or replace the certificate of incorporation. After an
148	148	amendment of the certificate of incorporation or any other
149	149	document filed under this chapter or Chapter 1 that restates
150	150	the certificate of incorporation in its entirety, the
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180	180	certificate of incorporation shall not include any prior
181	181	documents. When used with respect to a nonprofit corporation
182	182	incorporated and existing on December 31, 2023, under a
183	183	predecessor law of this state, the term "certificate of
184	184	incorporation" means articles of incorporation, charter, or
185	185	similar incorporating document, and all amendments and
186	186	restatements to the articles of incorporation, charter, or
187	187	similar incorporating document. When used with respect to a
188	188	foreign nonprofit corporation, a business corporation, or a
189	189	foreign business corporation, the "certificate of
190	190	incorporation" of that entity means the document of that
191	191	entity that is equivalent to the certificate of incorporation
192	192	of a corporation. The term "certificate of incorporation" as
193	193	used in this chapter is synonymous to the term certificate of
194	194	formation used in Chapter 1.
195	195	(2) BOARD or BOARD OF DIRECTORS means the group of
196	196	individuals responsible for the management or direction, and
197	197	oversight, of the activities and affairs of the nonprofit
198	198	corporation, regardless of the name used to refer to the group
199	199	or other persons authorized to perform the functions of the
200	200	board of directors.
201	201	(3) BUSINESS CORPORATION, except in the phrase foreign
202	202	business corporation, means an entity incorporated or existing
203	203	under the Alabama Business Corporation Law.
204	204	(4) BYLAWS means the code or codes of rules (other than
205	205	the certificate of incorporation) adopted for the regulation
206	206	or management of the affairs of the nonprofit corporation,
207	207	regardless of the name or names by which the rules are
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237	237	designated.
238	238	(5) DELIVER or DELIVERY means any method of delivery
239	239	used in conventional commercial practice, including delivery
240	240	by hand, mail, commercial delivery, and, if authorized in
241	241	accordance with Section 10A-3A-1.03, by electronic
242	242	transmission.
243	243	(6) DIRECTOR means an individual designated, elected,
244	244	or appointed, by that or any other name or title, to act as a
245	245	member of the board of directors, while the individual is
246	246	holding that position.
247	247	(7) DISTRIBUTION means a direct or indirect transfer of
248	248	cash or other property from a nonprofit corporation to a
249	249	member, director, or officer of that nonprofit corporation in
250	250	that person's capacity as a member, director, or officer, but
251	251	does not mean payments or benefits made in accordance with
252	252	Section 10A-3A-6.41.
253	253	(8) DOCUMENT means a writing as defined in Chapter 1.
254	254	(9) EFFECTIVE DATE when referring to a document
255	255	accepted for filing by the Secretary of State, means the time
256	256	and date determined in accordance with Article 4 of Chapter 1.
257	257	(10) ELECTRONIC MAIL means an electronic transmission
258	258	directed to a unique electronic mail address.
259	259	(11) ELECTRONIC MAIL ADDRESS means a destination,
260	260	commonly expressed as a string of characters, consisting of a
261	261	unique user name or mailbox (commonly referred to as the
262	262	"local part" of the address) and a reference to an internet
263	263	domain (commonly referred to as the "domain part" of the
264	264	address), whether or not displayed, to which electronic mail
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294	294	can be sent or delivered.
295	295	(12) EMPLOYEE does not include an individual serving as
296	296	an officer or director who is not otherwise employed by the
297	297	nonprofit corporation.
298	298	(13)ENTITLED TO VOTE means entitled to vote on the
299	299	matter under consideration pursuant to the certificate of
300	300	incorporation or bylaws of the nonprofit corporation, or
301	301	applicable provisions of this chapter or Chapter 1.
302	302	(14) ENTITY includes nonprofit corporation; foreign
303	303	nonprofit corporation; business corporation; foreign business
304	304	corporation; estate; trust; unincorporated entity; foreign
305	305	unincorporated entity; and state, United States, and foreign
306	306	government.
307	307	(15) EXPENSES means reasonable expenses of any kind
308	308	that are incurred in connection with a matter.
309	309	(16) FOREIGN BUSINESS CORPORATION means a business
310	310	corporation incorporated under a law other than the law of
311	311	this state which would be a business corporation if
312	312	incorporated under the law of this state.
313	313	(17) FOREIGN NONPROFIT CORPORATION means a nonprofit
314	314	corporation incorporated under a law other than the law of
315	315	this state which would be a nonprofit corporation if
316	316	incorporated under the law of this state.
317	317	(18) FOREIGN UNINCORPORATED ENTITY means an
318	318	unincorporated entity whose internal affairs are governed by
319	319	the law of a jurisdiction other than this state.
320	320	(19) FUNDAMENTAL TRANSACTION means an amendment of the
321	321	certificate of incorporation, an amendment to the bylaws, a
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351	351	merger, a conversion, a sale of all or substantially all of
352	352	the assets, or the dissolution of a nonprofit corporation.
353	353	(20) GOVERNING STATUTE means the statute governing the
354	354	internal affairs of a nonprofit corporation, foreign nonprofit
355	355	corporation, business corporation, foreign business
356	356	corporation, unincorporated entity, or foreign unincorporated
357	357	entity.
358	358	(21) INCLUDES and INCLUDING denote a partial definition
359	359	or a nonexclusive list.
360	360	(22) INTEREST means:
361	361	(a) a share;
362	362	(b) a membership or membership interests; or
363	363	(c) either or both of the following rights under the
364	364	governing statute governing an organization other than a
365	365	nonprofit corporation, foreign nonprofit corporation, business
366	366	corporation, foreign business corporation:
367	367	(i) the right to receive distributions from that
368	368	organization either in the ordinary course or upon
369	369	liquidation; or
370	370	(ii) the right to receive notice or vote on issues
371	371	involving that organization's internal affairs, other than as
372	372	an agent, assignee, proxy, or person responsible for managing
373	373	that organization's business and affairs.
374	374	(23) INTEREST HOLDER means a person who holds of record
375	375	an interest.
376	376	(24) KNOWLEDGE is determined as follows:
377	377	(a) A person knows a fact when the person:
378	378	(1) has actual knowledge of it; or
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408	408	(2) is deemed to know it under law other than this
409	409	chapter.
410	410	(b) A person has notice of a fact when the person:
411	411	(1) knows of it;
412	412	(2) receives notification of it in accordance with
413	413	Section 10A-3A-1.03;
414	414	(3) has reason to know the fact from all of the facts
415	415	known to the person at the time in question; or
416	416	(4) is deemed to have notice of the fact under
417	417	subsection (d).
418	418	(c) A person notifies another of a fact by taking steps
419	419	reasonably required to inform the other person in ordinary
420	420	course in accordance with Section 10A-3A-1.03, whether or not
421	421	the other person knows the fact.
422	422	(d) A person is deemed to have notice of a nonprofit
423	423	corporation's:
424	424	(1) matters included in the certificate of
425	425	incorporation upon filing;
426	426	(2) dissolution, 90 days after a certificate of
427	427	dissolution under Section 10A-3A-11.05 becomes effective;
428	428	(3) conversion or merger under Article 13 or Article
429	429	12, 90 days after a statement of conversion or statement of
430	430	merger becomes effective;
431	431	(4) conversion or merger under Article 8 of Chapter 1,
432	432	90 days after a statement of conversion or statement of merger
433	433	becomes effective; and
434	434	(5) revocation of dissolution and reinstatement, 90
435	435	days after certificate of revocation of dissolution and
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465	465	reinstatement under Section 10A-3A-11.06 becomes effective.
466	466	(e) A member's knowledge, notice, or receipt of a
467	467	notification of a fact relating to the nonprofit corporation
468	468	is not knowledge, notice, or receipt of a notification of a
469	469	fact by that nonprofit corporation solely by reason of the
470	470	member's capacity as a member.
471	471	(f) The date and time of the effectiveness of a notice
472	472	delivered in accordance with Section 10A-3A-1.03, is
473	473	determined by Section 10A-3A-1.03.
474	474	(25) MEANS denotes an exhaustive definition.
475	475	(26) MEMBER means a person in whose name a membership
476	476	is registered on the records of the membership nonprofit
477	477	corporation and who has the right to (i) select or vote for
478	478	the election of directors or (ii) vote on any type of
479	479	fundamental transaction.
480	480	(27) MEMBERSHIP or MEMBERSHIP INTERESTS means the
481	481	rights and any obligations of a member in a membership
482	482	nonprofit corporation or a foreign membership nonprofit
483	483	corporation.
484	484	(28) MEMBERSHIP NONPROFIT CORPORATION means, except as
485	485	provided in Section 10A-3A-14.01(c)(1), a nonprofit
486	486	corporation whose certificate of incorporation provides that
487	487	it will have members.
488	488	(29) NONMEMBERSHIP NONPROFIT CORPORATION means a
489	489	nonprofit corporation whose certificate of incorporation
490	490	provides that it will not have members.
491	491	(30) NONPROFIT CORPORATION, except in the phrase
492	492	foreign nonprofit corporation, means a nonprofit corporation
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522	522	incorporated under or existing under this chapter.
523	523	(31) ORGANIZATIONAL DOCUMENTS means the public organic
524	524	record and private organizational documents of a nonprofit
525	525	corporation, foreign nonprofit corporation, business
526	526	corporation, foreign business corporation, or other
527	527	organization.
528	528	(32) PRINCIPAL OFFICE means the office (in or out of
529	529	this state) where the principal executive offices of a
530	530	nonprofit corporation or foreign nonprofit corporation are
531	531	located.
532	532	(33) PRIVATE ORGANIZATIONAL DOCUMENTS means (i) the
533	533	bylaws of a nonprofit corporation, foreign nonprofit
534	534	corporation, business corporation, or foreign business
535	535	corporation or (ii) the rules, regardless of whether in
536	536	writing, that govern the internal affairs of an unincorporated
537	537	entity or foreign unincorporated entity, are binding on all
538	538	its interest holders, and are not part of its public organic
539	539	record, if any. Where private organizational documents have
540	540	been amended or restated, the term means the private
541	541	organizational documents as last amended or restated.
542	542	(34) PROCEEDING includes any civil suit and criminal,
543	543	administrative, and investigatory action.
544	544	(35) PUBLIC ORGANIC RECORD means (i) the certificate of
545	545	incorporation of a nonprofit corporation, foreign nonprofit
546	546	corporation, business corporation, or foreign business
547	547	corporation, or (ii) the document, if any, the filing of which
548	548	is required to create an unincorporated entity or foreign
549	549	unincorporated entity, or which creates the unincorporated
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579	579	entity or foreign unincorporated entity and is required to be
580	580	filed. Where a public organic record has been amended or
581	581	restated, the term means the public organic record as last
582	582	amended or restated.
583	583	(36) RECORD DATE means the date fixed for determining
584	584	the identity of the nonprofit corporation's members and their
585	585	interests for purposes of this chapter. Unless another time is
586	586	specified when the record date is fixed, the determination
587	587	shall be made as of the close of business at the principal
588	588	office of the nonprofit corporation on the date so fixed.
589	589	(37) SECRETARY means the corporate officer to whom the
590	590	certificate of incorporation, bylaws, or board of directors
591	591	has delegated responsibility under Section 10A-3A-8.40(c) to
592	592	maintain the minutes of the meetings of the board of
593	593	directors, committees, and the members, and for authenticating
594	594	records of the nonprofit corporation.
595	595	(38) SHARES means the units into which the proprietary
596	596	interests in a domestic or foreign business corporation are
597	597	divided.
598	598	(39) TYPE OF ENTITY means a generic form of entity: (i)
599	599	recognized at common law; or (ii) formed under a governing
600	600	statute, regardless of whether some entities formed under that
601	601	law are subject to provisions of that law that create
602	602	different categories of the form of entity.
603	603	(40) UNINCORPORATED ENTITY means an organization or
604	604	artificial legal person that either has a separate legal
605	605	existence or has the power to acquire an estate in real
606	606	property in its own name and that is not any of the following:
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636	636	a corporation, foreign corporation, nonprofit corporation,
637	637	foreign nonprofit corporation, a series of a limited liability
638	638	company or of another type of entity, an estate, a trust, a
639	639	state, United States, or foreign government. The term includes
640	640	a general partnership, limited liability company, limited
641	641	partnership, business trust, joint stock association, and
642	642	unincorporated nonprofit association.
643	643	(41) UNITED STATES includes a district, authority,
644	644	bureau, commission, department, and any other agency of the
645	645	United States.
646	646	(42) VOTE, VOTING, or CASTING A VOTE includes the
647	647	giving of consent in writing without a meeting. The term does
648	648	not include either recording the fact of abstention or failing
649	649	to vote for a candidate or for approval or disapproval of a
650	650	matter, whether or not the person entitled to vote
651	651	characterizes that conduct as voting or casting a vote.
652	652	(43) VOTING GROUP means one or more classes of members
653	653	that under the certificate of incorporation, bylaws, or this
654	654	chapter are entitled to vote and be counted together
655	655	collectively on a matter at a meeting of members. All members
656	656	entitled by the certificate of incorporation, bylaws, or this
657	657	chapter to vote generally on the matter are for that purpose a
658	658	single voting group.
659	659	(44) VOTING POWER means the current power to vote in
660	660	the election of directors, or to vote on approval of any type
661	661	of fundamental transaction.
662	662	§10A-3A-1.03. Notice.
663	663	(a) A notice under this chapter must be in writing
664	664	309
665	665	310
666	666	311
667	667	312
668	668	313
669	669	314
670	670	315
671	671	316
672	672	317
673	673	318
674	674	319
675	675	320
676	676	321
677	677	322
678	678	323
679	679	324
680	680	325
681	681	326
682	682	327
683	683	328
684	684	329
685	685	330
686	686	331
687	687	332
688	688	333
689	689	334
690	690	335
691	691	336 SB245 INTRODUCEDSB245 INTRODUCED
692	692	Page 13
693	693	unless oral notice is reasonable in the circumstances. Unless
694	694	otherwise agreed between the sender and the recipient, words
695	695	in a notice or other communication under this chapter must be
696	696	in English.
697	697	(b) A notice or other communication may be given by any
698	698	method of delivery, except that notice or other communication
699	699	by electronic transmission must be in accordance with this
700	700	section. If the methods of delivery are impracticable, a
701	701	notice or other communication from the nonprofit corporation
702	702	may be given by means of a broad non-exclusionary distribution
703	703	to the public (which may include a newspaper of general
704	704	circulation in the area where published; radio, television, or
705	705	other form of public broadcast communication; or other methods
706	706	of distribution that the nonprofit corporation has previously
707	707	identified to its recipients).
708	708	(c) A notice or other communication to a nonprofit
709	709	corporation or to a foreign nonprofit corporation registered
710	710	to transact business in this state may be delivered to the
711	711	registered agent of the nonprofit corporation or the foreign
712	712	nonprofit corporation at that registered agent's registered
713	713	office or to the secretary at the principal office of the
714	714	nonprofit corporation or the foreign nonprofit corporation.
715	715	(d) A notice or other communication from a nonprofit
716	716	corporation to a member may be delivered by electronic mail to
717	717	the electronic mail address for that member maintained
718	718	pursuant to Section 10A-3A-4.01(d), unless that member has
719	719	previously notified the nonprofit corporation in writing that
720	720	the member objects to receiving notices and other
721	721	337
722	722	338
723	723	339
724	724	340
725	725	341
726	726	342
727	727	343
728	728	344
729	729	345
730	730	346
731	731	347
732	732	348
733	733	349
734	734	350
735	735	351
736	736	352
737	737	353
738	738	354
739	739	355
740	740	356
741	741	357
742	742	358
743	743	359
744	744	360
745	745	361
746	746	362
747	747	363
748	748	364 SB245 INTRODUCEDSB245 INTRODUCED
749	749	Page 14
750	750	communications by electronic mail. Any notice or other
751	751	communication may be delivered to a member by another form of
752	752	electronic transmission if consented to by that member or if
753	753	authorized by subsection (j). Any notice or other
754	754	communication from a nonprofit corporation to any other person
755	755	may be delivered by electronic transmission if consented to by
756	756	the recipient or if authorized by subsection (j). Any consent
757	757	under this subsection or subsection (j) may be revoked with
758	758	respect to future notices or communications by the person who
759	759	consented by written notice to the person to whom the consent
760	760	was delivered.
761	761	(e) A notice or other communication may no longer be
762	762	delivered to an electronic mail address or other electronic
763	763	transmission address pursuant to subsection (d) if (i) the
764	764	nonprofit corporation receives notice from the information
765	765	processing system into which the notice or other communication
766	766	was entered that two consecutive notices or other
767	767	communications given by electronic transmission have not been
768	768	delivered to the electronic mail address or other electronic
769	769	transmission address to which the notice or other
770	770	communication was directed, and (ii) the notice of
771	771	non-delivery becomes known to the secretary or an assistant
772	772	secretary, or another person responsible for the giving of
773	773	notices or other communications for the nonprofit corporation;
774	774	provided, however, that the inadvertent failure to recognize
775	775	the notice of non-delivery as a cessation of authority to
776	776	provide a member with notice by electronic mail or other
777	777	electronic transmission shall not invalidate any meeting or
778	778	365
779	779	366
780	780	367
781	781	368
782	782	369
783	783	370
784	784	371
785	785	372
786	786	373
787	787	374
788	788	375
789	789	376
790	790	377
791	791	378
792	792	379
793	793	380
794	794	381
795	795	382
796	796	383
797	797	384
798	798	385
799	799	386
800	800	387
801	801	388
802	802	389
803	803	390
804	804	391
805	805	392 SB245 INTRODUCEDSB245 INTRODUCED
806	806	Page 15
807	807	other action.
808	808	(f) Unless otherwise agreed between the sender and the
809	809	recipient, a notice or other communication by electronic
810	810	transmission is received when:
811	811	(1) it enters an information processing system directed
812	812	to: (i) in the case of a member, the electronic mail address
813	813	for the member maintained pursuant to Section 10A-3A-4.01(d)
814	814	or other electronic transmission address at which the member
815	815	has consented to receive notice or other communication by
816	816	electronic transmission; or (ii) in the case of any other
817	817	recipient, the electronic transmission address at which the
818	818	recipient has consented to receive notice or other
819	819	communication by electronic transmission; and
820	820	(2) it is in a form capable of being processed by that
821	821	system.
822	822	(g) Receipt of an electronic acknowledgment from an
823	823	information processing system described in subsection (f)(1)
824	824	establishes that an electronic transmission was received but,
825	825	by itself, does not establish that the content sent
826	826	corresponds to the content received.
827	827	(h) An electronic transmission is received under this
828	828	section even if no person is aware of its receipt.
829	829	(i) A notice or other communication, if in a
830	830	comprehensible form or manner, is effective at the earliest of
831	831	the following:
832	832	(1) if in a physical form, the earliest of when it is
833	833	actually received, or when it is left at:
834	834	(i) a member's address included in the record of
835	835	393
836	836	394
837	837	395
838	838	396
839	839	397
840	840	398
841	841	399
842	842	400
843	843	401
844	844	402
845	845	403
846	846	404
847	847	405
848	848	406
849	849	407
850	850	408
851	851	409
852	852	410
853	853	411
854	854	412
855	855	413
856	856	414
857	857	415
858	858	416
859	859	417
860	860	418
861	861	419
862	862	420 SB245 INTRODUCEDSB245 INTRODUCED
863	863	Page 16
864	864	members maintained pursuant to Section 10A-3A-4.01(d);
865	865	(ii) a director's residence or usual place of business;
866	866	or
867	867	(iii) the nonprofit corporation's principal office;
868	868	(2) if mailed by United States mail postage prepaid and
869	869	addressed to a member at the member's address included in the
870	870	record of members maintained pursuant to Section
871	871	10A-3A-4.01(d), upon deposit in the United States mail;
872	872	(3) if mailed by United States mail postage prepaid and
873	873	addressed to a recipient other than a member, at the address
874	874	of the recipient reflected in the books and records of the
875	875	nonprofit corporation, the earliest of when it is actually
876	876	received, or:
877	877	(i) if sent by registered or certified mail, return
878	878	receipt requested, the date shown on the return receipt signed
879	879	by or on behalf of the addressee; or
880	880	(ii) five days after it is deposited in the United
881	881	States mail;
882	882	(4) if sent by a nationally recognized commercial
883	883	carrier that issues a receipt or other confirmation of
884	884	delivery, the earliest of when it is actually received or the
885	885	date shown on the receipt or other confirmation of delivery
886	886	issued by the commercial carrier;
887	887	(5) if an electronic transmission, when it is received
888	888	as provided in subsection (f); and
889	889	(6) if oral, when communicated.
890	890	(j) A notice or other communication may be in the form
891	891	of an electronic transmission that cannot be directly
892	892	421
893	893	422
894	894	423
895	895	424
896	896	425
897	897	426
898	898	427
899	899	428
900	900	429
901	901	430
902	902	431
903	903	432
904	904	433
905	905	434
906	906	435
907	907	436
908	908	437
909	909	438
910	910	439
911	911	440
912	912	441
913	913	442
914	914	443
915	915	444
916	916	445
917	917	446
918	918	447
919	919	448 SB245 INTRODUCEDSB245 INTRODUCED
920	920	Page 17
921	921	reproduced in paper form by the recipient through an automated
922	922	process used in conventional commercial practice only if (i)
923	923	the electronic transmission is otherwise retrievable in
924	924	perceivable form and (ii) the sender and the recipient have
925	925	consented in writing to the use of that form of electronic
926	926	transmission.
927	927	(k) If this chapter prescribes requirements for notices
928	928	or other communications in particular circumstances, those
929	929	requirements govern. If the certificate of incorporation or
930	930	bylaws prescribe requirements for notices or other
931	931	communications, not inconsistent with this section or other
932	932	provisions of this chapter, those requirements govern. The
933	933	certificate of incorporation or bylaws may authorize or
934	934	require delivery of notices of meetings of directors by
935	935	electronic transmission.
936	936	(l) In the event that any provisions of this chapter
937	937	are deemed to modify, limit, or supersede the federal
938	938	Electronic Signatures in Global and National Commerce Act, 15
939	939	U.S.C. §§ 7001 et seq., the provisions of this chapter shall
940	940	control to the maximum extent permitted by Section 102(a)(2)
941	941	of that federal act.
942	942	(m) Whenever a notice or communication would otherwise
943	943	be required to be given under any provision of this chapter to
944	944	a member, the notice or communication need not be given if the
945	945	nonprofit corporation is not permitted to deliver the notice
946	946	or communication by electronic transmission pursuant to
947	947	subsections (d) and (e) and:
948	948	(1) notices and communications to members of two
949	949	449
950	950	450
951	951	451
952	952	452
953	953	453
954	954	454
955	955	455
956	956	456
957	957	457
958	958	458
959	959	459
960	960	460
961	961	461
962	962	462
963	963	463
964	964	464
965	965	465
966	966	466
967	967	467
968	968	468
969	969	469
970	970	470
971	971	471
972	972	472
973	973	473
974	974	474
975	975	475
976	976	476 SB245 INTRODUCEDSB245 INTRODUCED
977	977	Page 18
978	978	consecutive annual meetings, and all notices and
979	979	communications of meetings during the period between those two
980	980	consecutive annual meetings, have been sent to that member at
981	981	that member's address included in the record of members
982	982	maintained pursuant to Section 10A-3A-4.01(d) and have been
983	983	returned undeliverable or could not be delivered; or
984	984	(2) no address has been provided to the nonprofit
985	985	corporation by or on behalf of a member and the nonprofit
986	986	corporation has not otherwise obtained an address for that
987	987	member it believes to be reliable.
988	988	In addition if any member to which this subsection (m)
989	989	applies delivers to the nonprofit corporation a written notice
990	990	or communication setting forth that member's then-current
991	991	address, the requirement that notice and communication be
992	992	given to that member shall be reinstated.
993	993	(n) Whenever a notice or communication is required to
994	994	be given, under any provision of this chapter or of the
995	995	certificate of incorporation or bylaws of any nonprofit
996	996	corporation, to any person with whom notice to or
997	997	communication with is unlawful, the giving of the notice or
998	998	communication to that person shall not be required and there
999	999	shall be no duty to apply to any governmental authority or
1000	1000	agency for a license or permit to give the notice or
1001	1001	communication to that person. Any action or meeting which
1002	1002	shall be taken or held without notice or communication to the
1003	1003	person with whom notice to or communication with is unlawful
1004	1004	shall have the same force and effect as if the notice or
1005	1005	communication had been duly given. In the event that the
1006	1006	477
1007	1007	478
1008	1008	479
1009	1009	480
1010	1010	481
1011	1011	482
1012	1012	483
1013	1013	484
1014	1014	485
1015	1015	486
1016	1016	487
1017	1017	488
1018	1018	489
1019	1019	490
1020	1020	491
1021	1021	492
1022	1022	493
1023	1023	494
1024	1024	495
1025	1025	496
1026	1026	497
1027	1027	498
1028	1028	499
1029	1029	500
1030	1030	501
1031	1031	502
1032	1032	503
1033	1033	504 SB245 INTRODUCEDSB245 INTRODUCED
1034	1034	Page 19
1035	1035	action taken by the nonprofit corporation requires the filing
1036	1036	of a certificate or other filing instrument under any of the
1037	1037	other sections of this chapter, the certificate or other
1038	1038	filing instrument shall state, if that is the fact and if
1039	1039	notice or communication is required, that notice or
1040	1040	communication was given to all persons entitled to receive
1041	1041	notice or communication except those persons with whom notice
1042	1042	to or communication with is unlawful.
1043	1043	§10A-3A-1.04. Requirements for filing instruments;
1044	1044	extrinsic facts.
1045	1045	(a) Whenever any filing instrument is to be delivered
1046	1046	to the Secretary of State for filing in accordance with this
1047	1047	chapter, the instrument shall be executed as follows:
1048	1048	(1) Except as provided in subsection (a)(3), the
1049	1049	certificate of incorporation, and any other instrument to be
1050	1050	filed before the election of the initial board of directors if
1051	1051	the initial directors were not named in the certificate of
1052	1052	incorporation, shall be signed by the incorporator or
1053	1053	incorporators or the successors and assigns of the
1054	1054	incorporator or incorporators. If any incorporator is not
1055	1055	available then any other instrument may be signed, with the
1056	1056	same effect as if the incorporator had signed it, by any
1057	1057	person for whom or on whose behalf the incorporator, in
1058	1058	executing the certificate of incorporation, was acting
1059	1059	directly or indirectly as employee or agent, provided that the
1060	1060	other instrument shall state that the incorporator is not
1061	1061	available and the reason therefor, that the incorporator in
1062	1062	executing the certificate of incorporation was acting directly
1063	1063	505
1064	1064	506
1065	1065	507
1066	1066	508
1067	1067	509
1068	1068	510
1069	1069	511
1070	1070	512
1071	1071	513
1072	1072	514
1073	1073	515
1074	1074	516
1075	1075	517
1076	1076	518
1077	1077	519
1078	1078	520
1079	1079	521
1080	1080	522
1081	1081	523
1082	1082	524
1083	1083	525
1084	1084	526
1085	1085	527
1086	1086	528
1087	1087	529
1088	1088	530
1089	1089	531
1090	1090	532 SB245 INTRODUCEDSB245 INTRODUCED
1091	1091	Page 20
1092	1092	or indirectly as employee or agent for or on behalf of the
1093	1093	person, and that the person's signature on the instrument is
1094	1094	otherwise authorized and not wrongful.
1095	1095	(2) Except as provided in subsection (a)(3), all other
1096	1096	filing instruments shall be signed:
1097	1097	(i) by any authorized officer of the nonprofit
1098	1098	corporation; or
1099	1099	(ii) if it shall appear from the filing instrument that
1100	1100	there are no authorized officers, then by a majority of the
1101	1101	directors or by the directors as may be designated by a
1102	1102	majority of the board of directors; or
1103	1103	(iii) if it shall appear from the filing instrument
1104	1104	that there are no authorized officers or directors, then by a
1105	1105	majority of the members or by the members as may be designated
1106	1106	by a majority of the members.
1107	1107	(3) If the nonprofit corporation is in the hands of a
1108	1108	receiver, trustee, or other court-appointed fiduciary, by that
1109	1109	fiduciary.
1110	1110	(b) The person executing the filing instrument shall
1111	1111	sign it and state beneath or opposite the person's signature
1112	1112	the person's name and the capacity in which the filing
1113	1113	instrument is signed. The filing instrument may, but need not,
1114	1114	contain a corporate seal, attestation, acknowledgment, or
1115	1115	verification.
1116	1116	(c) Whenever a provision of this chapter permits any of
1117	1117	the terms of a plan or a filing instrument to be dependent on
1118	1118	facts objectively ascertainable outside the plan or filing
1119	1119	instrument, the following provisions apply:
1120	1120	533
1121	1121	534
1122	1122	535
1123	1123	536
1124	1124	537
1125	1125	538
1126	1126	539
1127	1127	540
1128	1128	541
1129	1129	542
1130	1130	543
1131	1131	544
1132	1132	545
1133	1133	546
1134	1134	547
1135	1135	548
1136	1136	549
1137	1137	550
1138	1138	551
1139	1139	552
1140	1140	553
1141	1141	554
1142	1142	555
1143	1143	556
1144	1144	557
1145	1145	558
1146	1146	559
1147	1147	560 SB245 INTRODUCEDSB245 INTRODUCED
1148	1148	Page 21
1149	1149	(1) The manner in which the facts will operate upon the
1150	1150	terms of the plan or filing instrument must be set forth in
1151	1151	the plan or filing instrument.
1152	1152	(2) The facts may include:
1153	1153	(i) any of the following that are available in a
1154	1154	nationally recognized news or information medium either in
1155	1155	print or electronically: statistical or market indices, market
1156	1156	prices of any security or group of securities, interest rates,
1157	1157	currency exchange rates, or similar economic or financial
1158	1158	data;
1159	1159	(ii) a determination or action by any person or body,
1160	1160	including the nonprofit corporation or any other party to a
1161	1161	plan or filing instrument; or
1162	1162	(iii) the terms of, or actions taken under, an
1163	1163	agreement to which the nonprofit corporation is a party, or
1164	1164	any other agreement or document.
1165	1165	(3) As used in this subsection (c), "plan" means a plan
1166	1166	of conversion or merger.
1167	1167	(4) The following provisions of a plan or filing
1168	1168	instrument may not be made dependent on facts outside the plan
1169	1169	or filed document:
1170	1170	(i) the name and address of any person required in a
1171	1171	filing instrument;
1172	1172	(ii) the registered office of any entity required in a
1173	1173	filing instrument;
1174	1174	(iii) the registered agent of any entity required in a
1175	1175	filing instrument;
1176	1176	(iv) the effective date and time of a filing instrument
1177	1177	561
1178	1178	562
1179	1179	563
1180	1180	564
1181	1181	565
1182	1182	566
1183	1183	567
1184	1184	568
1185	1185	569
1186	1186	570
1187	1187	571
1188	1188	572
1189	1189	573
1190	1190	574
1191	1191	575
1192	1192	576
1193	1193	577
1194	1194	578
1195	1195	579
1196	1196	580
1197	1197	581
1198	1198	582
1199	1199	583
1200	1200	584
1201	1201	585
1202	1202	586
1203	1203	587
1204	1204	588 SB245 INTRODUCEDSB245 INTRODUCED
1205	1205	Page 22
1206	1206	as determined under Article 4 of Chapter 1; and
1207	1207	(v) any required statement in a filing instrument of
1208	1208	the date on which the underlying transaction was approved or
1209	1209	the manner in which that approval was given.
1210	1210	(5) If a provision of a filing instrument is made
1211	1211	dependent on a fact ascertainable outside of the filing
1212	1212	instrument, and that fact is neither ascertainable by
1213	1213	reference to a source described in subsection (c)(2)(i) or a
1214	1214	document that is a matter of public record, nor have the
1215	1215	affected members, if any, and if none, the affected directors,
1216	1216	received notice of the fact from the nonprofit corporation,
1217	1217	then the nonprofit corporation shall deliver to the Secretary
1218	1218	of State for filing a certificate of amendment to the filing
1219	1219	instrument setting forth the fact promptly after the time when
1220	1220	the fact referred to is first ascertainable or thereafter
1221	1221	changes. A certificate of amendment under this subsection is
1222	1222	deemed to be authorized by the authorization of the original
1223	1223	filing instrument to which it relates and may be filed by the
1224	1224	nonprofit corporation without further action by the board of
1225	1225	directors or the members.
1226	1226	§10A-3A-1.05. Certificate of existence or registration.
1227	1227	(a) The Secretary of State, upon request and payment of
1228	1228	the requisite fee, shall furnish to any person a certificate
1229	1229	of existence for a nonprofit corporation if the writings filed
1230	1230	in the office of the Secretary of State show that the
1231	1231	nonprofit corporation has been incorporated under the laws of
1232	1232	this state. A certificate of existence shall reflect only the
1233	1233	information on file with the Secretary of State. A certificate
1234	1234	589
1235	1235	590
1236	1236	591
1237	1237	592
1238	1238	593
1239	1239	594
1240	1240	595
1241	1241	596
1242	1242	597
1243	1243	598
1244	1244	599
1245	1245	600
1246	1246	601
1247	1247	602
1248	1248	603
1249	1249	604
1250	1250	605
1251	1251	606
1252	1252	607
1253	1253	608
1254	1254	609
1255	1255	610
1256	1256	611
1257	1257	612
1258	1258	613
1259	1259	614
1260	1260	615
1261	1261	616 SB245 INTRODUCEDSB245 INTRODUCED
1262	1262	Page 23
1263	1263	of existence must state:
1264	1264	(1) the nonprofit corporation's name;
1265	1265	(2) that the nonprofit corporation was incorporated
1266	1266	under the laws of this state, the date of incorporation, and
1267	1267	the filing office in which the certificate of incorporation
1268	1268	was filed;
1269	1269	(3) whether the nonprofit corporation has delivered to
1270	1270	the Secretary of State for filing a certificate of
1271	1271	dissolution;
1272	1272	(4) whether the nonprofit corporation has delivered to
1273	1273	the Secretary of State for filing a certificate of
1274	1274	reinstatement; and
1275	1275	(5) other facts of record in the office of the
1276	1276	Secretary of State that are specified by the person requesting
1277	1277	the certificate.
1278	1278	(b) The Secretary of State, upon request and payment of
1279	1279	the requisite fee, shall furnish to any person a certificate
1280	1280	of registration for a foreign nonprofit corporation if the
1281	1281	writings filed in the office of the Secretary of State show
1282	1282	that the Secretary of State has filed an application for
1283	1283	registration for authority to transact business in this state
1284	1284	and the registration has not been revoked, withdrawn, or
1285	1285	terminated. A certificate of registration must state:
1286	1286	(1) the foreign nonprofit corporation's name and any
1287	1287	alternate name adopted for use in this state;
1288	1288	(2) that the foreign nonprofit corporation is
1289	1289	authorized to transact business in this state;
1290	1290	(3) that the Secretary of State has not revoked the
1291	1291	617
1292	1292	618
1293	1293	619
1294	1294	620
1295	1295	621
1296	1296	622
1297	1297	623
1298	1298	624
1299	1299	625
1300	1300	626
1301	1301	627
1302	1302	628
1303	1303	629
1304	1304	630
1305	1305	631
1306	1306	632
1307	1307	633
1308	1308	634
1309	1309	635
1310	1310	636
1311	1311	637
1312	1312	638
1313	1313	639
1314	1314	640
1315	1315	641
1316	1316	642
1317	1317	643
1318	1318	644 SB245 INTRODUCEDSB245 INTRODUCED
1319	1319	Page 24
1320	1320	foreign nonprofit corporation's registration;
1321	1321	(4) that the foreign nonprofit corporation has not
1322	1322	filed with the Secretary of State a certificate of withdrawal
1323	1323	or otherwise terminated its registration; and
1324	1324	(5) other facts of record in the office of the
1325	1325	Secretary of State that are specified by the person requesting
1326	1326	the certificate.
1327	1327	(c) Subject to any qualification stated in the
1328	1328	certificate, a certificate of existence or certificate of
1329	1329	registration issued by the Secretary of State is conclusive
1330	1330	evidence that the nonprofit corporation is in existence or the
1331	1331	foreign nonprofit corporation is authorized to transact
1332	1332	business in this state.
1333	1333	DIVISION B. RATIFICATION OF DEFECTIVE CORPORATE ACTIONS
1334	1334	§10A-3A-1.20. Division definitions.
1335	1335	In this Division:
1336	1336	(1) "CORPORATE ACTION" means any action taken by or on
1337	1337	behalf of the nonprofit corporation, including any action
1338	1338	taken by the incorporator, the board of directors, a committee
1339	1339	of the board of directors, an officer or agent of the
1340	1340	nonprofit corporation, or the members, if any.
1341	1341	(2) "DATE OF THE DEFECTIVE CORPORATE ACTION" means the
1342	1342	date (or the approximate date, if the exact date is unknown)
1343	1343	the defective corporate action was purported to have been
1344	1344	taken.
1345	1345	(3) "DEFECTIVE CORPORATE ACTION" means (i) any
1346	1346	corporate action purportedly taken that is, and at the time
1347	1347	that corporate action was purportedly taken would have been,
1348	1348	645
1349	1349	646
1350	1350	647
1351	1351	648
1352	1352	649
1353	1353	650
1354	1354	651
1355	1355	652
1356	1356	653
1357	1357	654
1358	1358	655
1359	1359	656
1360	1360	657
1361	1361	658
1362	1362	659
1363	1363	660
1364	1364	661
1365	1365	662
1366	1366	663
1367	1367	664
1368	1368	665
1369	1369	666
1370	1370	667
1371	1371	668
1372	1372	669
1373	1373	670
1374	1374	671
1375	1375	672 SB245 INTRODUCEDSB245 INTRODUCED
1376	1376	Page 25
1377	1377	within the power of the nonprofit corporation, but is void or
1378	1378	voidable due to a failure of authorization, and (ii) an
1379	1379	overissue.
1380	1380	(4) "FAILURE OF AUTHORIZATION" means the failure to
1381	1381	authorize, approve, or otherwise effect a corporate action in
1382	1382	compliance with the provisions of this chapter, the
1383	1383	certificate of incorporation or bylaws, a corporate
1384	1384	resolution, or any plan or agreement to which the nonprofit
1385	1385	corporation is a party, if and to the extent that failure
1386	1386	would render that corporate action void or voidable.
1387	1387	(5) "OVERISSUE" means the purported issuance of:
1388	1388	(i) membership interests of a class in excess of the
1389	1389	number, if any, of membership interests of a class the
1390	1390	nonprofit corporation has the power to issue under its
1391	1391	certificate of incorporation or bylaws at the time of
1392	1392	issuance; or
1393	1393	(ii) membership interests of any class that is not then
1394	1394	authorized for issuance by the certificate of incorporation or
1395	1395	bylaws.
1396	1396	(6) "PUTATITVE MEMBERSHIP INTEREST" means a membership
1397	1397	interest of any class (including a membership interest issued
1398	1398	upon exercise of rights, options, warrants, or other
1399	1399	securities convertible into a membership interest of the
1400	1400	nonprofit corporation, or interests with respect to that
1401	1401	membership interest) that was created or issued as a result of
1402	1402	a defective corporate action, that (i) but for any failure of
1403	1403	authorization would constitute a valid membership interest, or
1404	1404	(ii) cannot be determined by the board of directors to be a
1405	1405	673
1406	1406	674
1407	1407	675
1408	1408	676
1409	1409	677
1410	1410	678
1411	1411	679
1412	1412	680
1413	1413	681
1414	1414	682
1415	1415	683
1416	1416	684
1417	1417	685
1418	1418	686
1419	1419	687
1420	1420	688
1421	1421	689
1422	1422	690
1423	1423	691
1424	1424	692
1425	1425	693
1426	1426	694
1427	1427	695
1428	1428	696
1429	1429	697
1430	1430	698
1431	1431	699
1432	1432	700 SB245 INTRODUCEDSB245 INTRODUCED
1433	1433	Page 26
1434	1434	valid membership interest.
1435	1435	(7) "VALID MEMBERSHIP INTEREST" means the membership
1436	1436	interest of any class that has been duly authorized and
1437	1437	validly issued in accordance with this chapter, including as a
1438	1438	result of ratification or validation under this article.
1439	1439	(8) "VALIDATION EFFECTIVE TIME" with respect to any
1440	1440	defective corporate action ratified under this article means
1441	1441	the later of:
1442	1442	(i) the time at which the ratification of the defective
1443	1443	corporate action is approved by the members, if any, and if
1444	1444	none, by the board of directors; and
1445	1445	(ii) the time at which any certificate of validation
1446	1446	filed in accordance with Section 10A-3A-1.26 becomes
1447	1447	effective.
1448	1448	The validation effective time shall not be affected by
1449	1449	the filing or pendency of a judicial proceeding under Section
1450	1450	10A-3A-1.27 or otherwise, unless otherwise ordered by the
1451	1451	court.
1452	1452	§10A-3A-1.21. Defective corporate actions.
1453	1453	(a) A defective corporate action shall not be void or
1454	1454	voidable if ratified in accordance with Section 10A-3A-1.22 or
1455	1455	validated in accordance with Section 10A-3A-1.27.
1456	1456	(b) Ratification under Section 10A-3A-1.22 or
1457	1457	validation under Section 10A-2A-1.27 shall not be deemed to be
1458	1458	the exclusive means of ratifying or validating any defective
1459	1459	corporate action, and the absence or failure of ratification
1460	1460	in accordance with this Division shall not, of itself, affect
1461	1461	the validity or effectiveness of any corporate action properly
1462	1462	701
1463	1463	702
1464	1464	703
1465	1465	704
1466	1466	705
1467	1467	706
1468	1468	707
1469	1469	708
1470	1470	709
1471	1471	710
1472	1472	711
1473	1473	712
1474	1474	713
1475	1475	714
1476	1476	715
1477	1477	716
1478	1478	717
1479	1479	718
1480	1480	719
1481	1481	720
1482	1482	721
1483	1483	722
1484	1484	723
1485	1485	724
1486	1486	725
1487	1487	726
1488	1488	727
1489	1489	728 SB245 INTRODUCEDSB245 INTRODUCED
1490	1490	Page 27
1491	1491	ratified under common law or otherwise, nor shall it create a
1492	1492	presumption that any such corporate action is or was a
1493	1493	defective corporate action or void or voidable.
1494	1494	(c) In the case of an overissue, a putative membership
1495	1495	interest shall be valid a membership interest effective as of
1496	1496	the date originally issued or purportedly issued upon:
1497	1497	(1) the effectiveness under this article and under
1498	1498	Article 9 of an amendment to the certificate of incorporation
1499	1499	or bylaws authorizing, designating, or creating that
1500	1500	membership interest; or
1501	1501	(2) the effectiveness of any other corporate action
1502	1502	under this article ratifying the authorization, designation,
1503	1503	or creation of a membership interest.
1504	1504	§10A-3A-1.22. Ratification of defective corporate
1505	1505	actions.
1506	1506	(a) To ratify a defective corporate action under this
1507	1507	section (other than the ratification of an election of the
1508	1508	initial board of directors under subsection (b)), the board of
1509	1509	directors shall take action ratifying the action in accordance
1510	1510	with Section 10A-3A-1.23, stating:
1511	1511	(1) the defective corporate action to be ratified and,
1512	1512	if the defective corporate action involved the issuance of a
1513	1513	putative membership interest, the number and types of putative
1514	1514	membership interests purportedly issued;
1515	1515	(2) the date of the defective corporate action;
1516	1516	(3) the nature of the failure of authorization with
1517	1517	respect to the defective corporate action to be ratified; and
1518	1518	(4) that the board of directors approves the
1519	1519	729
1520	1520	730
1521	1521	731
1522	1522	732
1523	1523	733
1524	1524	734
1525	1525	735
1526	1526	736
1527	1527	737
1528	1528	738
1529	1529	739
1530	1530	740
1531	1531	741
1532	1532	742
1533	1533	743
1534	1534	744
1535	1535	745
1536	1536	746
1537	1537	747
1538	1538	748
1539	1539	749
1540	1540	750
1541	1541	751
1542	1542	752
1543	1543	753
1544	1544	754
1545	1545	755
1546	1546	756 SB245 INTRODUCEDSB245 INTRODUCED
1547	1547	Page 28
1548	1548	ratification of the defective corporate action.
1549	1549	(b) In the event that a defective corporate action to
1550	1550	be ratified relates to the election of the initial board of
1551	1551	directors of the nonprofit corporation under Section
1552	1552	10A-3A-2.04(a)(2), a majority of the persons who, at the time
1553	1553	of the ratification, are exercising the powers of directors
1554	1554	may take an action stating:
1555	1555	(1) the name of the person or persons who first took
1556	1556	action in the name of the nonprofit corporation as the initial
1557	1557	board of directors of the nonprofit corporation;
1558	1558	(2) the earlier of the date on which those persons
1559	1559	first took the action or were purported to have been elected
1560	1560	as the initial board of directors; and
1561	1561	(3) that the ratification of the election of the person
1562	1562	or persons as the initial board of directors is approved.
1563	1563	(c) If any provision of this chapter, the certificate
1564	1564	of incorporation or bylaws, any corporate resolution, or any
1565	1565	plan or agreement to which a membership nonprofit corporation
1566	1566	is a party in effect at the time action under subsection (a)
1567	1567	is taken requires member approval or would have required
1568	1568	member approval at the date of the occurrence of the defective
1569	1569	corporate action, the ratification of the defective corporate
1570	1570	action approved in the action taken by the directors under
1571	1571	subsection (a) shall be submitted to the members for approval
1572	1572	in accordance with Section 10A-3A-1.23.
1573	1573	(d) If the certificate of incorporation of a nonprofit
1574	1574	corporation in effect at the time action under subsection (a)
1575	1575	is taken requires the approval of a person or group of persons
1576	1576	757
1577	1577	758
1578	1578	759
1579	1579	760
1580	1580	761
1581	1581	762
1582	1582	763
1583	1583	764
1584	1584	765
1585	1585	766
1586	1586	767
1587	1587	768
1588	1588	769
1589	1589	770
1590	1590	771
1591	1591	772
1592	1592	773
1593	1593	774
1594	1594	775
1595	1595	776
1596	1596	777
1597	1597	778
1598	1598	779
1599	1599	780
1600	1600	781
1601	1601	782
1602	1602	783
1603	1603	784 SB245 INTRODUCEDSB245 INTRODUCED
1604	1604	Page 29
1605	1605	specified in the certificate of incorporation or would have
1606	1606	required approval of that person or group of persons at the
1607	1607	date of the occurrence of the defective corporate action, the
1608	1608	ratification of the defective corporate action approved in the
1609	1609	action taken by the directors under subsection (a) shall be
1610	1610	submitted to that person or group of persons for approval in
1611	1611	accordance with Section 10A-3A-1.23.
1612	1612	(e) Unless otherwise provided in the action taken by
1613	1613	the board of directors under subsection (a), after the action
1614	1614	by the board of directors has been taken and, if required,
1615	1615	approved in accordance with subsection (c) or subsection (d),
1616	1616	the board of directors may abandon the ratification at any
1617	1617	time before the validation effective time without further
1618	1618	action of the members, if any, or the person or group of
1619	1619	persons, if any, specified in the certificate of
1620	1620	incorporation.
1621	1621	§10A-3A-1.23. Action on ratification.
1622	1622	(a) The quorum and voting requirements applicable to a
1623	1623	ratifying action by the board of directors under Section
1624	1624	10A-3A-1.22(a) shall be the quorum and voting requirements
1625	1625	applicable to the corporate action proposed to be ratified at
1626	1626	the time the ratifying action is taken.
1627	1627	(b) If the ratification of the defective corporate
1628	1628	action requires approval by the members under Section
1629	1629	10A-3A-1.22(c), and if the approval is to be given at a
1630	1630	meeting, the membership nonprofit corporation shall notify
1631	1631	each holder of valid and putative membership interests,
1632	1632	regardless of whether entitled to vote, as of the record date
1633	1633	785
1634	1634	786
1635	1635	787
1636	1636	788
1637	1637	789
1638	1638	790
1639	1639	791
1640	1640	792
1641	1641	793
1642	1642	794
1643	1643	795
1644	1644	796
1645	1645	797
1646	1646	798
1647	1647	799
1648	1648	800
1649	1649	801
1650	1650	802
1651	1651	803
1652	1652	804
1653	1653	805
1654	1654	806
1655	1655	807
1656	1656	808
1657	1657	809
1658	1658	810
1659	1659	811
1660	1660	812 SB245 INTRODUCEDSB245 INTRODUCED
1661	1661	Page 30
1662	1662	for notice of the meeting and as of the date of the occurrence
1663	1663	of defective corporate action, provided that notice shall not
1664	1664	be required to be given to holders of valid or putative
1665	1665	membership interests whose identities or addresses for notice
1666	1666	cannot be determined from the records of the membership
1667	1667	nonprofit corporation. The notice must state that the purpose,
1668	1668	or one of the purposes, of the meeting, is to consider
1669	1669	ratification of a defective corporate action and must be
1670	1670	accompanied by (i) either a copy of the action taken by the
1671	1671	board of directors in accordance with Section 10A-3A-1.22(a)
1672	1672	or the information required by Section 10A-3A-1.22(a)(1)
1673	1673	through (a)(4), and (ii) a statement that any claim that the
1674	1674	ratification of the defective corporate action and any
1675	1675	putative membership interest issued as a result of the
1676	1676	defective corporate action should not be effective, or should
1677	1677	be effective only on certain conditions, shall be brought
1678	1678	within 120 days from the applicable validation effective time.
1679	1679	(c) Except as provided in subsection (d) with respect
1680	1680	to the voting requirements to ratify the election of a
1681	1681	director, the quorum and voting requirements applicable to the
1682	1682	approval by the members, if any, and if none, by the directors
1683	1683	shall be the quorum and voting requirements applicable to the
1684	1684	corporate action proposed to be ratified at the time of the
1685	1685	member or director approval.
1686	1686	(d) The approval by members to ratify the election of a
1687	1687	director requires that the votes cast within the voting group
1688	1688	favoring the ratification exceed the votes cast opposing the
1689	1689	ratification of the election at a meeting at which a quorum is
1690	1690	813
1691	1691	814
1692	1692	815
1693	1693	816
1694	1694	817
1695	1695	818
1696	1696	819
1697	1697	820
1698	1698	821
1699	1699	822
1700	1700	823
1701	1701	824
1702	1702	825
1703	1703	826
1704	1704	827
1705	1705	828
1706	1706	829
1707	1707	830
1708	1708	831
1709	1709	832
1710	1710	833
1711	1711	834
1712	1712	835
1713	1713	836
1714	1714	837
1715	1715	838
1716	1716	839
1717	1717	840 SB245 INTRODUCEDSB245 INTRODUCED
1718	1718	Page 31
1719	1719	present.
1720	1720	(e) Putative membership interest on the record date for
1721	1721	determining the members entitled to vote on any matter
1722	1722	submitted to members under Section 10A-3A-1.22(c) (and without
1723	1723	giving effect to any ratification of putative membership
1724	1724	interests that becomes effective as a result of the vote)
1725	1725	shall neither be entitled to vote nor counted for quorum
1726	1726	purposes in any vote to approve the ratification of any
1727	1727	defective corporate action.
1728	1728	(f) If the approval under this section of putative
1729	1729	membership interests would result in an overissue, in addition
1730	1730	to the approval required by Section 10A-3A-1.22, approval of
1731	1731	an amendment to the certificate of incorporation under Article
1732	1732	9 to increase the number of membership interests of an
1733	1733	authorized class or to authorize the creation of a class of
1734	1734	membership interests so there would be no overissue shall also
1735	1735	be required.
1736	1736	(g) If the ratification of the defective corporate
1737	1737	action requires approval by a person or group of persons
1738	1738	specified in the certificate of incorporation, the directors
1739	1739	shall provide that person or group of persons with (i) either
1740	1740	a copy of the action taken by the board of directors in
1741	1741	accordance with Section 10A-3A-1.22(a) or the information
1742	1742	required by Section 10A-3A-1.22(a)(1) through (a)(4), and (ii)
1743	1743	a statement that any claim that the ratification of the
1744	1744	defective corporate action and any putative membership
1745	1745	interest issued as a result of the defective corporate action
1746	1746	should not be effective, or should be effective only on
1747	1747	841
1748	1748	842
1749	1749	843
1750	1750	844
1751	1751	845
1752	1752	846
1753	1753	847
1754	1754	848
1755	1755	849
1756	1756	850
1757	1757	851
1758	1758	852
1759	1759	853
1760	1760	854
1761	1761	855
1762	1762	856
1763	1763	857
1764	1764	858
1765	1765	859
1766	1766	860
1767	1767	861
1768	1768	862
1769	1769	863
1770	1770	864
1771	1771	865
1772	1772	866
1773	1773	867
1774	1774	868 SB245 INTRODUCEDSB245 INTRODUCED
1775	1775	Page 32
1776	1776	certain conditions, shall be brought within 120 days from the
1777	1777	applicable validation effective time.
1778	1778	§10A-3A-1.24. Notice requirements.
1779	1779	(a) In a membership nonprofit corporation, unless
1780	1780	member approval is required under Section 10A-3A-1.22(c),
1781	1781	prompt notice of an action taken under Section 10A-3A-1.22
1782	1782	shall be given to each holder of a valid and putative
1783	1783	membership interest in the membership nonprofit corporation,
1784	1784	regardless of whether entitled to vote, as of: (i) the date of
1785	1785	the action by the board of directors; and (ii) the date of the
1786	1786	defective corporate action ratified, provided that notice
1787	1787	shall not be required to be given to holders of a valid and
1788	1788	putative membership interest whose identities or addresses for
1789	1789	notice cannot be determined from the records of the nonprofit
1790	1790	corporation.
1791	1791	(b) The notice set forth in subsection (a) must
1792	1792	contain: (i) either a copy of the action taken by the board of
1793	1793	directors in accordance with Section 10A-3A-1.22(a) or (b) or
1794	1794	the information required by Section 10A-3A-1.22(a)(1) through
1795	1795	(a)(4) or Section 10A-3A-1.22(b)(1) through (b)(3), as
1796	1796	applicable; and (ii) a statement that any claim that the
1797	1797	ratification of the defective corporate action and any
1798	1798	putative membership interest issued as a result of the
1799	1799	defective corporate action should not be effective, or should
1800	1800	be effective only on certain conditions, shall be brought
1801	1801	within 120 days from the applicable validation effective time.
1802	1802	(c) In a membership nonprofit corporation, no notice
1803	1803	under this section is required with respect to any action
1804	1804	869
1805	1805	870
1806	1806	871
1807	1807	872
1808	1808	873
1809	1809	874
1810	1810	875
1811	1811	876
1812	1812	877
1813	1813	878
1814	1814	879
1815	1815	880
1816	1816	881
1817	1817	882
1818	1818	883
1819	1819	884
1820	1820	885
1821	1821	886
1822	1822	887
1823	1823	888
1824	1824	889
1825	1825	890
1826	1826	891
1827	1827	892
1828	1828	893
1829	1829	894
1830	1830	895
1831	1831	896 SB245 INTRODUCEDSB245 INTRODUCED
1832	1832	Page 33
1833	1833	required to be submitted to members for approval under Section
1834	1834	10A-3A-1.22(c) if notice is given in accordance with Section
1835	1835	10A-3A-1.24(b).
1836	1836	(d) A notice required by this section may be given in
1837	1837	any manner permitted by Section 10A-3A-1.03.
1838	1838	§10A-3A-1.25. Effect of ratification.
1839	1839	From and after the validation effective time, and
1840	1840	without regard to the 120-day period during which a claim may
1841	1841	be brought under Section 10A-3A-1.27:
1842	1842	(a) Each defective corporate action ratified in
1843	1843	accordance with Section 10A-3A-1.22 shall not be void or
1844	1844	voidable as a result of the failure of authorization
1845	1845	identified in the action taken under Section 10A-3A-1.22(a) or
1846	1846	(b) and shall be deemed a valid corporate action effective as
1847	1847	of the date of the defective corporate action;
1848	1848	(b) The issuance of each putative membership interest
1849	1849	purportedly issued pursuant to a defective corporate action
1850	1850	identified in the action taken under Section 10A-3A-1.22 shall
1851	1851	not be void or voidable, and each putative membership interest
1852	1852	shall be deemed to be an identical membership interest as of
1853	1853	the time it was purportedly issued; and
1854	1854	(c) Any corporate action taken subsequent to the
1855	1855	defective corporate action ratified in accordance with this
1856	1856	Division B of Article 1 in reliance on the defective corporate
1857	1857	action having been validly effected and any subsequent
1858	1858	defective corporate action resulting directly or indirectly
1859	1859	from the original defective corporate action shall be valid as
1860	1860	of the time taken.
1861	1861	897
1862	1862	898
1863	1863	899
1864	1864	900
1865	1865	901
1866	1866	902
1867	1867	903
1868	1868	904
1869	1869	905
1870	1870	906
1871	1871	907
1872	1872	908
1873	1873	909
1874	1874	910
1875	1875	911
1876	1876	912
1877	1877	913
1878	1878	914
1879	1879	915
1880	1880	916
1881	1881	917
1882	1882	918
1883	1883	919
1884	1884	920
1885	1885	921
1886	1886	922
1887	1887	923
1888	1888	924 SB245 INTRODUCEDSB245 INTRODUCED
1889	1889	Page 34
1890	1890	§10A-3A-1.26. Filings.
1891	1891	(a) If the defective corporate action ratified under
1892	1892	this Division B of Article 1 would have required under any
1893	1893	other section of this chapter a filing in accordance with this
1894	1894	chapter, then, regardless of whether a filing was previously
1895	1895	made in respect of the defective corporate action and in lieu
1896	1896	of a filing otherwise required by this chapter, the nonprofit
1897	1897	corporation shall file a certificate of validation in
1898	1898	accordance with this section, and that certificate of
1899	1899	validation shall serve to amend or substitute for any other
1900	1900	filing with respect to the defective corporate action required
1901	1901	by this chapter.
1902	1902	(b) The certificate of validation must set forth:
1903	1903	(1) the name of the nonprofit corporation;
1904	1904	(2) the unique identifying number or other designation
1905	1905	as assigned by the Secretary of State;
1906	1906	(3) the defective corporate action that is the subject
1907	1907	of the certificate of validation (including, in the case of
1908	1908	any defective corporate action involving the issuance of
1909	1909	putative membership interests, the number and type of shares
1910	1910	of putative membership interests issued and the date or dates
1911	1911	upon which that putative membership interest was purported to
1912	1912	have been issued);
1913	1913	(4) the date of the defective corporate action;
1914	1914	(5) the nature of the failure of authorization in
1915	1915	respect of the defective corporate action;
1916	1916	(6) a statement that the defective corporate action was
1917	1917	ratified in accordance with Section 10A-3A-1.22, including the
1918	1918	925
1919	1919	926
1920	1920	927
1921	1921	928
1922	1922	929
1923	1923	930
1924	1924	931
1925	1925	932
1926	1926	933
1927	1927	934
1928	1928	935
1929	1929	936
1930	1930	937
1931	1931	938
1932	1932	939
1933	1933	940
1934	1934	941
1935	1935	942
1936	1936	943
1937	1937	944
1938	1938	945
1939	1939	946
1940	1940	947
1941	1941	948
1942	1942	949
1943	1943	950
1944	1944	951
1945	1945	952 SB245 INTRODUCEDSB245 INTRODUCED
1946	1946	Page 35
1947	1947	date on which the board of directors ratified that defective
1948	1948	corporate action, and if applicable, the date on which the
1949	1949	members approved the ratification of that defective corporate
1950	1950	action, and the date on which the person or group of persons
1951	1951	specified in the certificate of incorporation approved the
1952	1952	ratification of that defective corporate action; and
1953	1953	(7) the information required by subsection (c).
1954	1954	(c) The certificate of validation must also contain the
1955	1955	following information:
1956	1956	(1) if a filing was previously made in respect of the
1957	1957	defective corporate action and no changes to that filing are
1958	1958	required to give effect to the ratification of that defective
1959	1959	corporate action in accordance with Section 10A-3A-1.22, the
1960	1960	certificate of validation must set forth (i) the name, title,
1961	1961	and filing date of the filing previously made and any
1962	1962	certificate of correction to that filing, and (ii) a statement
1963	1963	that a copy of the filing previously made, together with any
1964	1964	certificate of correction to that filing, is attached as an
1965	1965	exhibit to the certificate of validation;
1966	1966	(2) if a filing was previously made in respect of the
1967	1967	defective corporate action and that filing requires any change
1968	1968	to give effect to the ratification of that defective corporate
1969	1969	action in accordance with Section 10A-3A-1.22, the certificate
1970	1970	of validation must set forth (i) the name, title, and filing
1971	1971	date of the filing previously made and any certificate of
1972	1972	correction to that filing, and (ii) a statement that a filing
1973	1973	containing all of the information required to be included
1974	1974	under the applicable section or sections of this chapter to
1975	1975	953
1976	1976	954
1977	1977	955
1978	1978	956
1979	1979	957
1980	1980	958
1981	1981	959
1982	1982	960
1983	1983	961
1984	1984	962
1985	1985	963
1986	1986	964
1987	1987	965
1988	1988	966
1989	1989	967
1990	1990	968
1991	1991	969
1992	1992	970
1993	1993	971
1994	1994	972
1995	1995	973
1996	1996	974
1997	1997	975
1998	1998	976
1999	1999	977
2000	2000	978
2001	2001	979
2002	2002	980 SB245 INTRODUCEDSB245 INTRODUCED
2003	2003	Page 36
2004	2004	give effect to that defective corporate action is attached as
2005	2005	an exhibit to the certificate of validation, and (iii) the
2006	2006	date and time that filing is deemed to have become effective;
2007	2007	or
2008	2008	(3) if a filing was not previously made in respect of
2009	2009	the defective corporate action and the defective corporate
2010	2010	action ratified under Section 10A-3A-1.22 would have required
2011	2011	a filing under any other section of this chapter, the
2012	2012	certificate of validation must set forth (i) a statement that
2013	2013	a filing containing all of the information required to be
2014	2014	included under the applicable section or sections of this
2015	2015	chapter to give effect to that defective corporate action is
2016	2016	attached as an exhibit to the certificate of validation, and
2017	2017	(ii) the date and time that filing is deemed to have become
2018	2018	effective.
2019	2019	§10A-3A-1.27. Judicial proceedings regarding validity
2020	2020	of corporate actions.
2021	2021	(a) Upon application by the nonprofit corporation, any
2022	2022	successor entity to the nonprofit corporation, a director of
2023	2023	the nonprofit corporation, any member (if applicable) of the
2024	2024	nonprofit corporation, including any member as of the date of
2025	2025	the defective corporate action ratified under Section
2026	2026	10A-3A-1.22, the person or group of persons (if applicable)
2027	2027	specified in the certificate of incorporation, or any other
2028	2028	person claiming to be substantially and adversely affected by
2029	2029	a ratification under Section 10A-3A-1.22, the designated
2030	2030	court, and if none, the circuit court for the county in which
2031	2031	the nonprofit corporation's principal office is located in
2032	2032	981
2033	2033	982
2034	2034	983
2035	2035	984
2036	2036	985
2037	2037	986
2038	2038	987
2039	2039	988
2040	2040	989
2041	2041	990
2042	2042	991
2043	2043	992
2044	2044	993
2045	2045	994
2046	2046	995
2047	2047	996
2048	2048	997
2049	2049	998
2050	2050	999
2051	2051	1000
2052	2052	1001
2053	2053	1002
2054	2054	1003
2055	2055	1004
2056	2056	1005
2057	2057	1006
2058	2058	1007
2059	2059	1008 SB245 INTRODUCEDSB245 INTRODUCED
2060	2060	Page 37
2061	2061	this state, and if none in this state, the circuit court for
2062	2062	the county in which the nonprofit corporation's most recent
2063	2063	registered office, is located, may:
2064	2064	(1) determine the validity and effectiveness of any
2065	2065	corporate action or defective corporate action;
2066	2066	(2) determine the validity and effectiveness of any
2067	2067	ratification under Section 10A-3A-1.22;
2068	2068	(3) determine the validity of any putative membership
2069	2069	interest; and
2070	2070	(4) modify or waive any of the procedures specified in
2071	2071	Section 10A-3A-1.22 or Section 10A-3A-1.23 to ratify a
2072	2072	defective corporate action.
2073	2073	(b) In connection with an action under this section,
2074	2074	the court may make findings or orders, and take into account
2075	2075	any factors or considerations, regarding any matters as it
2076	2076	deems proper under the circumstances.
2077	2077	(c) Service of process of the application under
2078	2078	subsection (a) on the nonprofit corporation may be made in any
2079	2079	manner provided by statute of this state or by rule of the
2080	2080	applicable court for service on the nonprofit corporation, and
2081	2081	no other party need be joined in order for the court to
2082	2082	adjudicate the matter. In an action filed by the nonprofit
2083	2083	corporation, the court may require notice of the action be
2084	2084	provided to other persons specified by the court and permit
2085	2085	those other persons to intervene in the action.
2086	2086	(d) Notwithstanding any other provision of this section
2087	2087	or otherwise under applicable law, any action asserting that
2088	2088	the ratification of any defective corporate action and any
2089	2089	1009
2090	2090	1010
2091	2091	1011
2092	2092	1012
2093	2093	1013
2094	2094	1014
2095	2095	1015
2096	2096	1016
2097	2097	1017
2098	2098	1018
2099	2099	1019
2100	2100	1020
2101	2101	1021
2102	2102	1022
2103	2103	1023
2104	2104	1024
2105	2105	1025
2106	2106	1026
2107	2107	1027
2108	2108	1028
2109	2109	1029
2110	2110	1030
2111	2111	1031
2112	2112	1032
2113	2113	1033
2114	2114	1034
2115	2115	1035
2116	2116	1036 SB245 INTRODUCEDSB245 INTRODUCED
2117	2117	Page 38
2118	2118	putative membership interest issued as a result of a defective
2119	2119	corporate action should not be effective, or should be
2120	2120	effective only on certain conditions, shall be brought within
2121	2121	120 days of the validation effective time.
2122	2122	DIVISION C. MISCELLANEOUS.
2123	2123	§10A-3A-1.60. Qualified director.
2124	2124	(a) A "qualified director" is a director who, at the
2125	2125	time action is to be taken under:
2126	2126	(1) Section 10A-3A-2.02(b)(6), is not a director (i) to
2127	2127	whom the limitation or elimination of the duty of an officer
2128	2128	to offer potential business opportunities to the nonprofit
2129	2129	corporation would apply, or (ii) who has a material
2130	2130	relationship with any other person to whom the limitation or
2131	2131	elimination would apply;
2132	2132	(2) Section 10A-3A-8.53 or Section 10A-3A-8.55 (i) is
2133	2133	not a party to the proceeding, (ii) is not a director as to
2134	2134	whom a transaction is a director's conflicting interest
2135	2135	transaction or who sought a disclaimer of the nonprofit
2136	2136	corporation's interest in a business opportunity under Section
2137	2137	10A-2A-8.60, which transaction or disclaimer is challenged,
2138	2138	and (iii) does not have a material relationship with a
2139	2139	director described in either clause (i) or clause (ii) of this
2140	2140	subsection (a)(2); or
2141	2141	(3) Section 10A-2A-8.60, is not a director (i) as to
2142	2142	whom the contract or transaction is a director's conflicting
2143	2143	interest transaction, (ii) who has a material relationship
2144	2144	with another director as to whom the transaction is a
2145	2145	director's conflicting interest transaction, (iii) who pursues
2146	2146	1037
2147	2147	1038
2148	2148	1039
2149	2149	1040
2150	2150	1041
2151	2151	1042
2152	2152	1043
2153	2153	1044
2154	2154	1045
2155	2155	1046
2156	2156	1047
2157	2157	1048
2158	2158	1049
2159	2159	1050
2160	2160	1051
2161	2161	1052
2162	2162	1053
2163	2163	1054
2164	2164	1055
2165	2165	1056
2166	2166	1057
2167	2167	1058
2168	2168	1059
2169	2169	1060
2170	2170	1061
2171	2171	1062
2172	2172	1063
2173	2173	1064 SB245 INTRODUCEDSB245 INTRODUCED
2174	2174	Page 39
2175	2175	or takes advantage of the business opportunity, directly, or
2176	2176	indirectly through or on behalf of another person, or (iv) has
2177	2177	a material relationship with a director or officer who pursues
2178	2178	or takes advantage of the business opportunity, directly, or
2179	2179	indirectly through or on behalf of another person.
2180	2180	(b) For purposes of this section:
2181	2181	(1) "MATERIAL RELATIONSHIP" means a familial,
2182	2182	financial, professional, employment, or other relationship
2183	2183	that would reasonably be expected to impair the objectivity of
2184	2184	the director's judgment when participating in the action to be
2185	2185	taken; and
2186	2186	(2) "MATERIAL INTEREST" means an actual or potential
2187	2187	benefit or detriment (other than one which would devolve on
2188	2188	the nonprofit corporation or the members generally) that would
2189	2189	reasonably be expected to impair the objectivity of the
2190	2190	director's judgment when participating in the action to be
2191	2191	taken.
2192	2192	(c) The presence of one or more of the following
2193	2193	circumstances shall not automatically prevent a director from
2194	2194	being a qualified director:
2195	2195	(1) nomination or election of the director to the
2196	2196	current board of directors by any director who is not a
2197	2197	qualified director with respect to the matter (or by any
2198	2198	person that has a material relationship with that director),
2199	2199	acting alone or participating with others; or
2200	2200	(2) service as a director of another nonprofit
2201	2201	corporation of which a director who is not a qualified
2202	2202	director with respect to the matter (or any individual who has
2203	2203	1065
2204	2204	1066
2205	2205	1067
2206	2206	1068
2207	2207	1069
2208	2208	1070
2209	2209	1071
2210	2210	1072
2211	2211	1073
2212	2212	1074
2213	2213	1075
2214	2214	1076
2215	2215	1077
2216	2216	1078
2217	2217	1079
2218	2218	1080
2219	2219	1081
2220	2220	1082
2221	2221	1083
2222	2222	1084
2223	2223	1085
2224	2224	1086
2225	2225	1087
2226	2226	1088
2227	2227	1089
2228	2228	1090
2229	2229	1091
2230	2230	1092 SB245 INTRODUCEDSB245 INTRODUCED
2231	2231	Page 40
2232	2232	a material relationship with that director), is or was also a
2233	2233	director.
2234	2234	§10A-3A-1.61. Householding.
2235	2235	(a) A membership nonprofit corporation has delivered
2236	2236	written notice or any other report or statement under this
2237	2237	chapter, the certificate of incorporation, or the bylaws to
2238	2238	all members who share a common address if:
2239	2239	(1) the membership nonprofit corporation delivers one
2240	2240	copy of the notice, report, or statement to the common
2241	2241	address;
2242	2242	(2) the membership nonprofit corporation addresses the
2243	2243	notice, report, or statement to those members either as a
2244	2244	group or to each of those members individually or to the
2245	2245	members in a form to which each of those members has
2246	2246	consented; and
2247	2247	(3) each of those members consents to delivery of a
2248	2248	single copy of the notice, report, or statement to the
2249	2249	members' common address.
2250	2250	(b) A consent described in subsection (a)(2) or (a)(3)
2251	2251	shall be revocable by any members who deliver written notice
2252	2252	of revocation to the membership nonprofit corporation. If a
2253	2253	written notice of revocation is delivered, the membership
2254	2254	nonprofit corporation shall begin providing individual
2255	2255	notices, reports, or other statements to the revoking member
2256	2256	no later than 30 days after delivery of the written notice of
2257	2257	revocation.
2258	2258	(c) Any member who fails to object by written notice to
2259	2259	the membership nonprofit corporation, within 60 days of
2260	2260	1093
2261	2261	1094
2262	2262	1095
2263	2263	1096
2264	2264	1097
2265	2265	1098
2266	2266	1099
2267	2267	1100
2268	2268	1101
2269	2269	1102
2270	2270	1103
2271	2271	1104
2272	2272	1105
2273	2273	1106
2274	2274	1107
2275	2275	1108
2276	2276	1109
2277	2277	1110
2278	2278	1111
2279	2279	1112
2280	2280	1113
2281	2281	1114
2282	2282	1115
2283	2283	1116
2284	2284	1117
2285	2285	1118
2286	2286	1119
2287	2287	1120 SB245 INTRODUCEDSB245 INTRODUCED
2288	2288	Page 41
2289	2289	written notice by the membership nonprofit corporation of its
2290	2290	intention to deliver single copies of notices, reports, or
2291	2291	statements to members who share a common address as permitted
2292	2292	by subsection (a), shall be deemed to have consented to
2293	2293	receiving a single copy at the common address; provided that
2294	2294	the notice of intention explains that consent may be revoked
2295	2295	and the method for revoking.
2296	2296	§10A-3A-1.62. Governing law of foreign nonprofit
2297	2297	corporations.
2298	2298	(a) The law of the jurisdiction of formation of a
2299	2299	foreign nonprofit corporation governs:
2300	2300	(1) the incorporation and internal affairs of the
2301	2301	foreign nonprofit corporation;
2302	2302	(2) the liability of its members as members for the
2303	2303	debts, obligations, or other liabilities of the foreign
2304	2304	nonprofit corporation; and
2305	2305	(3) the authority of the directors and officers of the
2306	2306	foreign nonprofit corporation.
2307	2307	(b) A foreign nonprofit corporation is not precluded
2308	2308	from registering to do business in this state because of any
2309	2309	difference between the law of the foreign nonprofit
2310	2310	corporation's jurisdiction of formation and the law of this
2311	2311	state.
2312	2312	ARTICLE 2. INCORPORATION.
2313	2313	§10A-3A-2.01. Incorporators.
2314	2314	Section 10A-1-3.04 shall not apply to this chapter. In
2315	2315	order to incorporate a nonprofit corporation, one or more
2316	2316	incorporators must execute a certificate of incorporation and
2317	2317	1121
2318	2318	1122
2319	2319	1123
2320	2320	1124
2321	2321	1125
2322	2322	1126
2323	2323	1127
2324	2324	1128
2325	2325	1129
2326	2326	1130
2327	2327	1131
2328	2328	1132
2329	2329	1133
2330	2330	1134
2331	2331	1135
2332	2332	1136
2333	2333	1137
2334	2334	1138
2335	2335	1139
2336	2336	1140
2337	2337	1141
2338	2338	1142
2339	2339	1143
2340	2340	1144
2341	2341	1145
2342	2342	1146
2343	2343	1147
2344	2344	1148 SB245 INTRODUCEDSB245 INTRODUCED
2345	2345	Page 42
2346	2346	deliver it for filing to the Secretary of State.
2347	2347	§10A-3A-2.02. Certificate of incorporation.
2348	2348	Section 10A-1-3.05 shall not apply to this chapter.
2349	2349	Instead:
2350	2350	(a) The certificate of incorporation must set forth:
2351	2351	(1) a name for the nonprofit corporation that satisfies
2352	2352	the requirements of Article 5 of Chapter 1;
2353	2353	(2) the street and mailing address of the nonprofit
2354	2354	corporation's initial registered office, the county within
2355	2355	this state in which the street and mailing address is located,
2356	2356	and the name of the nonprofit corporation's initial registered
2357	2357	agent at that office as required by Article 5 of Chapter 1;
2358	2358	(3) that the nonprofit corporation is incorporated
2359	2359	under this chapter;
2360	2360	(4) the name and address of each incorporator; and
2361	2361	(5)(i) if the nonprofit corporation will have members,
2362	2362	a statement to that effect; or
2363	2363	(ii) if the nonprofit corporation will not have
2364	2364	members, a statement to that effect.
2365	2365	(b) The certificate of incorporation may set forth:
2366	2366	(1) the names and addresses of the individuals who are
2367	2367	to serve as the initial directors;
2368	2368	(2) provisions not inconsistent with law regarding:
2369	2369	(i) the purpose or purposes for which the nonprofit
2370	2370	corporation is organized;
2371	2371	(ii) managing the activities and regulating the affairs
2372	2372	of the nonprofit corporation;
2373	2373	(iii) defining, limiting, and regulating the powers of
2374	2374	1149
2375	2375	1150
2376	2376	1151
2377	2377	1152
2378	2378	1153
2379	2379	1154
2380	2380	1155
2381	2381	1156
2382	2382	1157
2383	2383	1158
2384	2384	1159
2385	2385	1160
2386	2386	1161
2387	2387	1162
2388	2388	1163
2389	2389	1164
2390	2390	1165
2391	2391	1166
2392	2392	1167
2393	2393	1168
2394	2394	1169
2395	2395	1170
2396	2396	1171
2397	2397	1172
2398	2398	1173
2399	2399	1174
2400	2400	1175
2401	2401	1176 SB245 INTRODUCEDSB245 INTRODUCED
2402	2402	Page 43
2403	2403	the nonprofit corporation, its board of directors, and the
2404	2404	members;
2405	2405	(iv) the characteristics, qualifications, rights,
2406	2406	limitations, and obligations attaching to each or any class of
2407	2407	members;
2408	2408	(v) subject to Section 10A-3A-4.20, limiting a member's
2409	2409	right to inspect and copy the records of the nonprofit
2410	2410	corporation under Section 10A-3A-4.02(b);
2411	2411	(vi) the distribution of assets on dissolution;
2412	2412	(vii) provisions for the election, appointment, or
2413	2413	designation of directors;
2414	2414	(viii) provisions granting inspection rights to a
2415	2415	person or group of persons under Section 10A-3A-4.07; and
2416	2416	(ix) provisions specifying a person or group of persons
2417	2417	whose approval is required under Sections 10A-3A-9.30,
2418	2418	10A-3A-10.04, 10A-3A-11.04, 10A-3A-12.08, or 10A-3A-13.08;
2419	2419	(3) any provision that under this chapter is permitted
2420	2420	to be set forth in the certificate of incorporation or
2421	2421	required or permitted to be set forth in the bylaws;
2422	2422	(4) a provision eliminating or limiting the liability
2423	2423	of a director to a nonprofit corporation or its members for
2424	2424	money damages for any action taken, or any failure to take any
2425	2425	action, as a director, except liability for (i) the amount of
2426	2426	a financial benefit received by a director to which the
2427	2427	director is not entitled (ii) an intentional infliction of
2428	2428	harm on the nonprofit corporation or its members, (iii) a
2429	2429	violation of Section 10A-3A-8.32, or (iv) an intentional
2430	2430	violation of criminal law;
2431	2431	1177
2432	2432	1178
2433	2433	1179
2434	2434	1180
2435	2435	1181
2436	2436	1182
2437	2437	1183
2438	2438	1184
2439	2439	1185
2440	2440	1186
2441	2441	1187
2442	2442	1188
2443	2443	1189
2444	2444	1190
2445	2445	1191
2446	2446	1192
2447	2447	1193
2448	2448	1194
2449	2449	1195
2450	2450	1196
2451	2451	1197
2452	2452	1198
2453	2453	1199
2454	2454	1200
2455	2455	1201
2456	2456	1202
2457	2457	1203
2458	2458	1204 SB245 INTRODUCEDSB245 INTRODUCED
2459	2459	Page 44
2460	2460	(5) a provision permitting or making obligatory
2461	2461	indemnification of a director for liability as defined in
2462	2462	Section 10A-3A-8.50 to any person for any action taken, or any
2463	2463	failure to take any action, as a director, except liability
2464	2464	for (i) receipt of a financial benefit to which the director
2465	2465	is not entitled, (ii) an intentional infliction of harm on the
2466	2466	nonprofit corporation or its members, (iii) a violation of
2467	2467	Section 10A-3A-8.32, or (iv) an intentional violation of
2468	2468	criminal law;
2469	2469	(6) a provision limiting or eliminating any duty of a
2470	2470	director or any other person to offer the nonprofit
2471	2471	corporation the right to have or participate in any, or one or
2472	2472	more classes or categories of, corporate opportunities, before
2473	2473	the pursuit or taking of the opportunity by the director or
2474	2474	other person; provided that the application of that provision
2475	2475	to an officer or a related person of that officer (i) also
2476	2476	requires approval of that application by the board of
2477	2477	directors, subsequent to the effective date of the provision,
2478	2478	by action of the disinterested or qualified directors taken in
2479	2479	compliance with the same procedures as are set forth in
2480	2480	Section 10A-3A-8.60, and (ii) may be limited by the
2481	2481	authorizing action of the board of directors; and
2482	2482	(7) provisions required if the nonprofit corporation is
2483	2483	to be exempt from taxation under federal, state, or local law.
2484	2484	(c) The certificate of incorporation need not set forth
2485	2485	any of the corporate powers enumerated in Sections 10A-1-2.11,
2486	2486	10A-1-2.12, and 10A-1-2.13.
2487	2487	(d) Provisions of the certificate of incorporation may
2488	2488	1205
2489	2489	1206
2490	2490	1207
2491	2491	1208
2492	2492	1209
2493	2493	1210
2494	2494	1211
2495	2495	1212
2496	2496	1213
2497	2497	1214
2498	2498	1215
2499	2499	1216
2500	2500	1217
2501	2501	1218
2502	2502	1219
2503	2503	1220
2504	2504	1221
2505	2505	1222
2506	2506	1223
2507	2507	1224
2508	2508	1225
2509	2509	1226
2510	2510	1227
2511	2511	1228
2512	2512	1229
2513	2513	1230
2514	2514	1231
2515	2515	1232 SB245 INTRODUCEDSB245 INTRODUCED
2516	2516	Page 45
2517	2517	be made dependent upon facts objectively ascertainable outside
2518	2518	the certificate of incorporation in accordance with Section
2519	2519	10A-3A-1.04.
2520	2520	(e) As used in this section, "related person" means:
2521	2521	(i) the individual's spouse; (ii) a child, stepchild,
2522	2522	grandchild, parent, stepparent, grandparent, sibling,
2523	2523	stepsibling, half sibling, aunt, uncle, niece, or nephew (or
2524	2524	spouse of any such person) of the individual or of the
2525	2525	individual's spouse; (iii) a natural person living in the same
2526	2526	home as the individual; (iv) an entity (other than the
2527	2527	nonprofit corporation or an entity controlled by the nonprofit
2528	2528	corporation) controlled by the individual or any person
2529	2529	specified above in this definition; (v) a domestic or foreign
2530	2530	(A) business or nonprofit corporation (other than the
2531	2531	nonprofit corporation or an entity controlled by the nonprofit
2532	2532	corporation) of which the individual is a director, (B)
2533	2533	unincorporated entity of which the individual is a general
2534	2534	partner or a member of the governing authority, or (C)
2535	2535	individual, trust or estate for whom or of which the
2536	2536	individual is a trustee, guardian, personal representative, or
2537	2537	like fiduciary; or (vi) a person that is, or an entity that
2538	2538	is, controlled by, an employer of the individual.
2539	2539	(f) The certificate of incorporation may not contain
2540	2540	any provision that would impose liability on a member or a
2541	2541	director for the attorney's fees or expenses of the nonprofit
2542	2542	corporation or any other party in connection with an internal
2543	2543	corporate claim, as defined in Section 10A-3A-2.07(d).
2544	2544	(g) The certificate of incorporation is a part of a
2545	2545	1233
2546	2546	1234
2547	2547	1235
2548	2548	1236
2549	2549	1237
2550	2550	1238
2551	2551	1239
2552	2552	1240
2553	2553	1241
2554	2554	1242
2555	2555	1243
2556	2556	1244
2557	2557	1245
2558	2558	1246
2559	2559	1247
2560	2560	1248
2561	2561	1249
2562	2562	1250
2563	2563	1251
2564	2564	1252
2565	2565	1253
2566	2566	1254
2567	2567	1255
2568	2568	1256
2569	2569	1257
2570	2570	1258
2571	2571	1259
2572	2572	1260 SB245 INTRODUCEDSB245 INTRODUCED
2573	2573	Page 46
2574	2574	binding contract between the nonprofit corporation and (i) the
2575	2575	members in a membership nonprofit corporation and (ii) the
2576	2576	directors in a nonmembership nonprofit corporation, subject to
2577	2577	the provisions of this chapter.
2578	2578	§10A-3A-2.03. Liability for preincorporation
2579	2579	transactions.
2580	2580	All persons purporting to act as or on behalf of a
2581	2581	nonprofit corporation, knowing there was no incorporation
2582	2582	under this chapter, are jointly and severally liable for all
2583	2583	liabilities created while so acting.
2584	2584	§10A-3A-2.04. Organization of nonprofit corporation.
2585	2585	(a) After incorporation:
2586	2586	(1) if initial directors are named in the certificate
2587	2587	of incorporation, the initial directors shall hold an
2588	2588	organizational meeting, at the call of a majority of the
2589	2589	directors, to complete the organization of the nonprofit
2590	2590	corporation by appointing officers, adopting bylaws, and
2591	2591	carrying on any other business brought before the meeting; or
2592	2592	(2) if initial directors are not named in the
2593	2593	certificate of incorporation, the incorporator or
2594	2594	incorporators shall hold an organizational meeting at the call
2595	2595	of a majority of the incorporators:
2596	2596	(i) to elect initial directors and complete the
2597	2597	organization of the nonprofit corporation; or
2598	2598	(ii) to elect a board of directors who shall complete
2599	2599	the organization of the nonprofit corporation.
2600	2600	(b) Action required or permitted by this chapter to be
2601	2601	taken by incorporators at an organizational meeting may be
2602	2602	1261
2603	2603	1262
2604	2604	1263
2605	2605	1264
2606	2606	1265
2607	2607	1266
2608	2608	1267
2609	2609	1268
2610	2610	1269
2611	2611	1270
2612	2612	1271
2613	2613	1272
2614	2614	1273
2615	2615	1274
2616	2616	1275
2617	2617	1276
2618	2618	1277
2619	2619	1278
2620	2620	1279
2621	2621	1280
2622	2622	1281
2623	2623	1282
2624	2624	1283
2625	2625	1284
2626	2626	1285
2627	2627	1286
2628	2628	1287
2629	2629	1288 SB245 INTRODUCEDSB245 INTRODUCED
2630	2630	Page 47
2631	2631	taken without a meeting if the action taken is evidenced by
2632	2632	one or more written consents describing the action taken and
2633	2633	signed by each incorporator.
2634	2634	§10A-3A-2.05. Bylaws.
2635	2635	(a) The incorporators or board of directors of a
2636	2636	nonprofit corporation shall adopt initial bylaws for the
2637	2637	nonprofit corporation.
2638	2638	(b) The bylaws of a nonprofit corporation may contain
2639	2639	any provision that is not inconsistent with law or the
2640	2640	certificate of incorporation.
2641	2641	(c) The bylaws are a part of a binding contract between
2642	2642	the nonprofit corporation and (i) the members in a membership
2643	2643	nonprofit corporation and (ii) the directors in a
2644	2644	nonmembership nonprofit corporation, subject to the provisions
2645	2645	of this chapter.
2646	2646	§10A-3A-2.06. Emergency bylaws.
2647	2647	(a) Unless the certificate of incorporation provides
2648	2648	otherwise, bylaws may be adopted to be effective only in an
2649	2649	emergency defined in subsection (d). The emergency bylaws,
2650	2650	which are subject to amendment or repeal in accordance with
2651	2651	Section 10A-3A-9.20, may make all provisions necessary for
2652	2652	managing the nonprofit corporation during the emergency,
2653	2653	including:
2654	2654	(1) procedures for calling a meeting of the board of
2655	2655	directors;
2656	2656	(2) quorum requirements for the meeting; and
2657	2657	(3) designation of additional or substitute directors.
2658	2658	(b) All provisions of the regular bylaws not
2659	2659	1289
2660	2660	1290
2661	2661	1291
2662	2662	1292
2663	2663	1293
2664	2664	1294
2665	2665	1295
2666	2666	1296
2667	2667	1297
2668	2668	1298
2669	2669	1299
2670	2670	1300
2671	2671	1301
2672	2672	1302
2673	2673	1303
2674	2674	1304
2675	2675	1305
2676	2676	1306
2677	2677	1307
2678	2678	1308
2679	2679	1309
2680	2680	1310
2681	2681	1311
2682	2682	1312
2683	2683	1313
2684	2684	1314
2685	2685	1315
2686	2686	1316 SB245 INTRODUCEDSB245 INTRODUCED
2687	2687	Page 48
2688	2688	inconsistent with the emergency bylaws remain effective during
2689	2689	the emergency. The emergency bylaws are not effective after
2690	2690	the emergency ends.
2691	2691	(c) Corporate action taken in good faith in accordance
2692	2692	with the emergency bylaws:
2693	2693	(1) binds the nonprofit corporation; and
2694	2694	(2) may not be used to impose liability on a member,
2695	2695	director, officer, employee, or agent of the nonprofit
2696	2696	corporation.
2697	2697	(d) An emergency exists for purposes of this section if
2698	2698	a quorum of the board of directors cannot readily be assembled
2699	2699	because of some catastrophic event.
2700	2700	§10A-3A-2.07. Forum selection provisions.
2701	2701	(a) The certificate of incorporation or the bylaws may
2702	2702	require that any or all internal corporate claims shall be
2703	2703	brought exclusively in any specified court or courts of this
2704	2704	state and, if so specified, in any additional courts in this
2705	2705	state or in any other jurisdictions with which the nonprofit
2706	2706	corporation has a reasonable relationship.
2707	2707	(b) A provision of the certificate of incorporation or
2708	2708	bylaws adopted under subsection (a) shall not have the effect
2709	2709	of conferring jurisdiction on any court or over any person or
2710	2710	claim, and shall not apply if none of the courts specified by
2711	2711	that provision has the requisite personal and subject matter
2712	2712	jurisdiction. If the court or courts of this state specified
2713	2713	in a provision adopted under subsection (a) do not have the
2714	2714	requisite personal and subject matter jurisdiction and another
2715	2715	court of this state does have jurisdiction, then the internal
2716	2716	1317
2717	2717	1318
2718	2718	1319
2719	2719	1320
2720	2720	1321
2721	2721	1322
2722	2722	1323
2723	2723	1324
2724	2724	1325
2725	2725	1326
2726	2726	1327
2727	2727	1328
2728	2728	1329
2729	2729	1330
2730	2730	1331
2731	2731	1332
2732	2732	1333
2733	2733	1334
2734	2734	1335
2735	2735	1336
2736	2736	1337
2737	2737	1338
2738	2738	1339
2739	2739	1340
2740	2740	1341
2741	2741	1342
2742	2742	1343
2743	2743	1344 SB245 INTRODUCEDSB245 INTRODUCED
2744	2744	Page 49
2745	2745	corporate claim may be brought in the other court of this
2746	2746	state, notwithstanding that the other court of this state is
2747	2747	not specified in that provision, and in any other court
2748	2748	specified in that provision that has the requisite
2749	2749	jurisdiction.
2750	2750	(c) No provision of the certificate of incorporation or
2751	2751	the bylaws may prohibit bringing an internal corporate claim
2752	2752	in the courts of this state or require those claims to be
2753	2753	determined by arbitration.
2754	2754	(d) "Internal corporate claim" means, for the purposes
2755	2755	of this section, (i) any claim that is based upon a violation
2756	2756	of a duty under the laws of this state by a current or former
2757	2757	director, officer, or member in their capacities as such, (ii)
2758	2758	any action asserting a claim arising pursuant to any provision
2759	2759	of this chapter or the certificate of incorporation or bylaws,
2760	2760	or (iii) any action asserting a claim governed by the internal
2761	2761	affairs doctrine that is not included in (i) through (ii)
2762	2762	above.
2763	2763	ARTICLE 3. PURPOSES AND POWERS.
2764	2764	§10A-3A-3.01. Purposes.
2765	2765	(a) Every nonprofit corporation has the purpose of
2766	2766	engaging in any lawful activity unless a more limited purpose
2767	2767	is set forth in the certificate of incorporation.
2768	2768	(b) If a nonprofit corporation will engage in an
2769	2769	activity that is subject to regulation under another statute
2770	2770	of the state, the nonprofit corporation may incorporate under
2771	2771	this chapter only if not prohibited by, and subject to all
2772	2772	limitations of, the other statute.
2773	2773	1345
2774	2774	1346
2775	2775	1347
2776	2776	1348
2777	2777	1349
2778	2778	1350
2779	2779	1351
2780	2780	1352
2781	2781	1353
2782	2782	1354
2783	2783	1355
2784	2784	1356
2785	2785	1357
2786	2786	1358
2787	2787	1359
2788	2788	1360
2789	2789	1361
2790	2790	1362
2791	2791	1363
2792	2792	1364
2793	2793	1365
2794	2794	1366
2795	2795	1367
2796	2796	1368
2797	2797	1369
2798	2798	1370
2799	2799	1371
2800	2800	1372 SB245 INTRODUCEDSB245 INTRODUCED
2801	2801	Page 50
2802	2802	(c) Labor unions, cooperative organizations, and
2803	2803	organizations subject to any of the provisions of the
2804	2804	insurance laws of Alabama may not be organized under this
2805	2805	chapter.
2806	2806	(d) Whenever 10 or more retail merchants wish to form a
2807	2807	nonprofit association, cooperative society, or corporation in
2808	2808	the sense of paying interest or dividends on stock, but for
2809	2809	mutual benefit through the application of cooperation or other
2810	2810	economic principles, they may become a body corporate in the
2811	2811	manner provided in this chapter.
2812	2812	(e) Whenever 10 or more wholesale merchants wish to
2813	2813	form a nonprofit association, cooperative society, or
2814	2814	corporation in the sense of paying interest or dividends on
2815	2815	stock, but for mutual benefit through the application of
2816	2816	cooperation or other economic principles, they may become a
2817	2817	body corporate in the manner provided in this chapter.
2818	2818	§10A-3A-3.02. General powers.
2819	2819	Unless its certificate of incorporation provides
2820	2820	otherwise, every nonprofit corporation has perpetual duration
2821	2821	and succession in its corporate name and has the same powers
2822	2822	as an individual to do all things necessary or convenient to
2823	2823	carry out its activities and affairs, including all entity
2824	2824	powers provided in Section 10A-1-2.11, Section 10A-1-2.12, and
2825	2825	Section 10A-1-2.13.
2826	2826	§10A-3A-3.03. Emergency powers.
2827	2827	(a) In anticipation of or during an emergency defined
2828	2828	in subsection (d), the board of directors of a nonprofit
2829	2829	corporation may:
2830	2830	1373
2831	2831	1374
2832	2832	1375
2833	2833	1376
2834	2834	1377
2835	2835	1378
2836	2836	1379
2837	2837	1380
2838	2838	1381
2839	2839	1382
2840	2840	1383
2841	2841	1384
2842	2842	1385
2843	2843	1386
2844	2844	1387
2845	2845	1388
2846	2846	1389
2847	2847	1390
2848	2848	1391
2849	2849	1392
2850	2850	1393
2851	2851	1394
2852	2852	1395
2853	2853	1396
2854	2854	1397
2855	2855	1398
2856	2856	1399
2857	2857	1400 SB245 INTRODUCEDSB245 INTRODUCED
2858	2858	Page 51
2859	2859	(1) modify lines of succession to accommodate the
2860	2860	incapacity of any director, officer, employee, or agent; and
2861	2861	(2) relocate the principal office, designate
2862	2862	alternative principal offices or regional offices, or
2863	2863	authorize the officers to do so.
2864	2864	(b) During an emergency defined in subsection (d),
2865	2865	unless emergency bylaws provide otherwise:
2866	2866	(1) notice of a meeting of the board of directors need
2867	2867	be given only to those directors whom it is practicable to
2868	2868	reach and may be given in any practicable manner; and
2869	2869	(2) one or more officers of the nonprofit corporation
2870	2870	present at a meeting of the board of directors may be deemed
2871	2871	to be directors for the meeting, in order of rank and within
2872	2872	the same rank in order of seniority, as necessary to achieve a
2873	2873	quorum.
2874	2874	(c) Corporate action taken in good faith during an
2875	2875	emergency under this section to further the ordinary business
2876	2876	affairs of the nonprofit corporation:
2877	2877	(1) binds the nonprofit corporation; and
2878	2878	(2) may not be used to impose liability on a member,
2879	2879	director, officer, employee, or agent.
2880	2880	(d) An emergency exists for purposes of this section if
2881	2881	a quorum of the board of directors cannot readily be assembled
2882	2882	because of some catastrophic event.
2883	2883	§10A-3A-3.04. Lack of power.
2884	2884	(a) Except as provided in subsection (b), the validity
2885	2885	of corporate action may not be challenged on the ground that
2886	2886	the nonprofit corporation lacks or lacked power to act.
2887	2887	1401
2888	2888	1402
2889	2889	1403
2890	2890	1404
2891	2891	1405
2892	2892	1406
2893	2893	1407
2894	2894	1408
2895	2895	1409
2896	2896	1410
2897	2897	1411
2898	2898	1412
2899	2899	1413
2900	2900	1414
2901	2901	1415
2902	2902	1416
2903	2903	1417
2904	2904	1418
2905	2905	1419
2906	2906	1420
2907	2907	1421
2908	2908	1422
2909	2909	1423
2910	2910	1424
2911	2911	1425
2912	2912	1426
2913	2913	1427
2914	2914	1428 SB245 INTRODUCEDSB245 INTRODUCED
2915	2915	Page 52
2916	2916	(b) The power of a nonprofit corporation to act may be
2917	2917	challenged:
2918	2918	(1) in a proceeding by a member or director against the
2919	2919	nonprofit corporation to enjoin the act;
2920	2920	(2) in a proceeding by the nonprofit corporation,
2921	2921	directly, or through a receiver, trustee, or other legal
2922	2922	representative, against an incumbent or former director,
2923	2923	officer, employee, or agent of the nonprofit corporation; or
2924	2924	(3) in a proceeding by the Attorney General.
2925	2925	(c) In a proceeding by a member or a director under
2926	2926	subsection (b)(1) to enjoin an unauthorized corporate act, the
2927	2927	court may enjoin or set aside the act, if equitable and if all
2928	2928	affected persons are parties to the proceeding, and may award
2929	2929	damages for loss (other than anticipated profits) suffered by
2930	2930	the nonprofit corporation or another party because of
2931	2931	enjoining the unauthorized corporate act.
2932	2932	ARTICLE 4. RECORDS AND REPORTS.
2933	2933	DIVISION A. RECORDS.
2934	2934	§10A-3A-4.01. Corporate records.
2935	2935	(a) A nonprofit corporation must maintain the following
2936	2936	records:
2937	2937	(1) its certificate of incorporation as currently in
2938	2938	effect;
2939	2939	(2) any notices to members referred to in Section
2940	2940	10A-3A-1.04(c)(5) specifying facts on which a filed document
2941	2941	is dependent if those facts are not included in the
2942	2942	certificate of incorporation or otherwise available as
2943	2943	specified in Section 10A-3A-1.04(c)(5);
2944	2944	1429
2945	2945	1430
2946	2946	1431
2947	2947	1432
2948	2948	1433
2949	2949	1434
2950	2950	1435
2951	2951	1436
2952	2952	1437
2953	2953	1438
2954	2954	1439
2955	2955	1440
2956	2956	1441
2957	2957	1442
2958	2958	1443
2959	2959	1444
2960	2960	1445
2961	2961	1446
2962	2962	1447
2963	2963	1448
2964	2964	1449
2965	2965	1450
2966	2966	1451
2967	2967	1452
2968	2968	1453
2969	2969	1454
2970	2970	1455
2971	2971	1456 SB245 INTRODUCEDSB245 INTRODUCED
2972	2972	Page 53
2973	2973	(3) its bylaws as currently in effect;
2974	2974	(4) all written communications within the past three
2975	2975	years to members generally;
2976	2976	(5) minutes of all meetings of, and records of all
2977	2977	actions taken without a meeting by, its members, its board of
2978	2978	directors, and board committees established under Section
2979	2979	10A-3A-8.25; and
2980	2980	(6) a list of the names and business addresses of its
2981	2981	current directors and officers.
2982	2982	(b) A nonprofit corporation shall maintain all annual
2983	2983	financial statements prepared for the nonprofit corporation
2984	2984	for its last three fiscal years (or such shorter period of
2985	2985	existence) and any audit or other reports with respect to
2986	2986	those financial statements.
2987	2987	(c) A nonprofit corporation shall maintain accounting
2988	2988	records in a form that permits preparation of the financial
2989	2989	statements.
2990	2990	(d) A membership nonprofit corporation must maintain a
2991	2991	record of its current members in alphabetical order by class
2992	2992	of membership showing the address for each member to which
2993	2993	notices and other communications from the membership nonprofit
2994	2994	corporation are to be sent. In addition if a member has
2995	2995	provided an electronic mail address to the membership
2996	2996	nonprofit corporation or has consented to receive notices or
2997	2997	other communications by electronic mail or other electronic
2998	2998	transmission, the record of members shall include the
2999	2999	electronic mail or other electronic transmission address of
3000	3000	the member if notices or other communications are being
3001	3001	1457
3002	3002	1458
3003	3003	1459
3004	3004	1460
3005	3005	1461
3006	3006	1462
3007	3007	1463
3008	3008	1464
3009	3009	1465
3010	3010	1466
3011	3011	1467
3012	3012	1468
3013	3013	1469
3014	3014	1470
3015	3015	1471
3016	3016	1472
3017	3017	1473
3018	3018	1474
3019	3019	1475
3020	3020	1476
3021	3021	1477
3022	3022	1478
3023	3023	1479
3024	3024	1480
3025	3025	1481
3026	3026	1482
3027	3027	1483
3028	3028	1484 SB245 INTRODUCEDSB245 INTRODUCED
3029	3029	Page 54
3030	3030	delivered by the membership nonprofit corporation to the
3031	3031	member at that electronic mail or other electronic
3032	3032	transmission address pursuant to Section 10A-3A-1.03(d). An
3033	3033	electronic mail address of a member shall be deemed to be
3034	3034	provided by a member if it is contained in a communication to
3035	3035	the membership nonprofit corporation by or on behalf of the
3036	3036	member, unless the communication expressly indicates that the
3037	3037	electronic mail address may not be used to deliver notices or
3038	3038	other communications.
3039	3039	(e) A nonprofit corporation must maintain the records
3040	3040	specified in this section in a manner so that they may be made
3041	3041	available for inspection within a reasonable time.
3042	3042	§10A-3A-4.02. Inspection rights of members.
3043	3043	(a) A member of a membership nonprofit corporation is
3044	3044	entitled to inspect and copy, during regular business hours at
3045	3045	the membership nonprofit corporation's principal office, any
3046	3046	of the records of the membership nonprofit corporation
3047	3047	described in Section 10A-3A-4.01(a), excluding minutes of
3048	3048	meetings of, and records of actions taken without a meeting
3049	3049	by, the membership nonprofit corporation's board of directors
3050	3050	and board committees established under Section 10A-3A-8.25, if
3051	3051	the member gives the membership nonprofit corporation a signed
3052	3052	written notice of the member's demand at least five business
3053	3053	days before the date on which the member wishes to inspect and
3054	3054	copy.
3055	3055	(b) A member of a membership nonprofit corporation is
3056	3056	entitled to inspect and copy, during regular business hours at
3057	3057	a reasonable location specified by the membership nonprofit
3058	3058	1485
3059	3059	1486
3060	3060	1487
3061	3061	1488
3062	3062	1489
3063	3063	1490
3064	3064	1491
3065	3065	1492
3066	3066	1493
3067	3067	1494
3068	3068	1495
3069	3069	1496
3070	3070	1497
3071	3071	1498
3072	3072	1499
3073	3073	1500
3074	3074	1501
3075	3075	1502
3076	3076	1503
3077	3077	1504
3078	3078	1505
3079	3079	1506
3080	3080	1507
3081	3081	1508
3082	3082	1509
3083	3083	1510
3084	3084	1511
3085	3085	1512 SB245 INTRODUCEDSB245 INTRODUCED
3086	3086	Page 55
3087	3087	corporation, any of the following records of the membership
3088	3088	nonprofit corporation if the member meets the requirements of
3089	3089	subsection (c) and gives the membership nonprofit corporation
3090	3090	a signed written notice of the member's demand at least five
3091	3091	business days before the date on which the member wishes to
3092	3092	inspect and copy:
3093	3093	(1) the financial statements of the membership
3094	3094	nonprofit corporation maintained in accordance with Section
3095	3095	10A-3A-4.01(b);
3096	3096	(2) accounting records of the membership nonprofit
3097	3097	corporation; and
3098	3098	(3) excerpts from minutes of any meeting of, or records
3099	3099	of any actions taken without a meeting by, the board of
3100	3100	directors and board committees maintained in accordance with
3101	3101	Section 10A-3A-4.01(a); and
3102	3102	(4) subject to Section 10A-3A-4.06, the record of
3103	3103	members maintained in accordance with Section 10A-3A-4.01(d).
3104	3104	(c) A member may inspect and copy the records described
3105	3105	in subsection (b) only if:
3106	3106	(1) the member's demand is made in good faith and for a
3107	3107	proper purpose;
3108	3108	(2) the member's demand describes with reasonable
3109	3109	particularity the member's purpose and the records the member
3110	3110	desires to inspect; and
3111	3111	(3) the records are directly connected with the
3112	3112	member's purpose.
3113	3113	(d) The membership nonprofit corporation may impose
3114	3114	reasonable restrictions and conditions on access to and use of
3115	3115	1513
3116	3116	1514
3117	3117	1515
3118	3118	1516
3119	3119	1517
3120	3120	1518
3121	3121	1519
3122	3122	1520
3123	3123	1521
3124	3124	1522
3125	3125	1523
3126	3126	1524
3127	3127	1525
3128	3128	1526
3129	3129	1527
3130	3130	1528
3131	3131	1529
3132	3132	1530
3133	3133	1531
3134	3134	1532
3135	3135	1533
3136	3136	1534
3137	3137	1535
3138	3138	1536
3139	3139	1537
3140	3140	1538
3141	3141	1539
3142	3142	1540 SB245 INTRODUCEDSB245 INTRODUCED
3143	3143	Page 56
3144	3144	the records to be inspected and copied under subsections (a)
3145	3145	and (b), including designating information confidential and
3146	3146	imposing nondisclosure and safeguarding, and may further keep
3147	3147	confidential from its members and other persons, for a period
3148	3148	of time as the membership nonprofit corporation deems
3149	3149	reasonable any information that the membership nonprofit
3150	3150	corporation reasonably believes to be in the nature of a trade
3151	3151	secret or other information the disclosure of which the
3152	3152	membership nonprofit corporation in good faith believes is not
3153	3153	in the best interest of the membership nonprofit corporation
3154	3154	or could damage the membership nonprofit corporation or its
3155	3155	activities or affairs, or that the membership nonprofit
3156	3156	corporation is required by law or by agreement with a third
3157	3157	party to keep confidential. In any dispute concerning the
3158	3158	reasonableness of a restriction under this subsection, the
3159	3159	membership nonprofit corporation has the burden of proving
3160	3160	reasonableness.
3161	3161	(e) For any meeting of members for which the record
3162	3162	date for determining members entitled to vote at the meeting
3163	3163	is different than the record date for notice of the meeting,
3164	3164	any person who becomes a member subsequent to the record date
3165	3165	for notice of the meeting and is entitled to vote at the
3166	3166	meeting is entitled to obtain from the membership nonprofit
3167	3167	corporation upon request the notice and any other information
3168	3168	provided by the membership nonprofit corporation to members in
3169	3169	connection with the meeting, unless the membership nonprofit
3170	3170	corporation has made that information generally available to
3171	3171	members by posting it on its website or by other generally
3172	3172	1541
3173	3173	1542
3174	3174	1543
3175	3175	1544
3176	3176	1545
3177	3177	1546
3178	3178	1547
3179	3179	1548
3180	3180	1549
3181	3181	1550
3182	3182	1551
3183	3183	1552
3184	3184	1553
3185	3185	1554
3186	3186	1555
3187	3187	1556
3188	3188	1557
3189	3189	1558
3190	3190	1559
3191	3191	1560
3192	3192	1561
3193	3193	1562
3194	3194	1563
3195	3195	1564
3196	3196	1565
3197	3197	1566
3198	3198	1567
3199	3199	1568 SB245 INTRODUCEDSB245 INTRODUCED
3200	3200	Page 57
3201	3201	recognized means. Failure of a membership nonprofit
3202	3202	corporation to provide that information does not affect the
3203	3203	validity of action taken at the meeting.
3204	3204	(f) Subject to Section 10A-3A-4.20, the right of
3205	3205	inspection granted by Section 10A-3A-4.02(b) may be limited by
3206	3206	a membership nonprofit corporation's certificate of
3207	3207	incorporation.
3208	3208	(g) This section does not affect:
3209	3209	(1) the right of a member to inspect records under
3210	3210	Section 10A-3A-7.20 or, if the member is in litigation with
3211	3211	the membership nonprofit corporation, to the same extent as
3212	3212	any other litigant; or
3213	3213	(2) the power of a court, independently of this
3214	3214	chapter, to compel the production of corporate records for
3215	3215	examination and to impose reasonable restrictions as provided
3216	3216	in Section 10A-3A-4.04(c), provided that, in the case of
3217	3217	production of records described in subsection (b) of this
3218	3218	section at the request of the member, the member has met the
3219	3219	requirements of subsection (c) of this section.
3220	3220	§10A-3A-4.03. Scope of inspection right of members.
3221	3221	(a) A member may appoint an agent or attorney to
3222	3222	exercise the member's inspection and copying rights under
3223	3223	Section 10A-3A-4.02.
3224	3224	(b) The membership nonprofit corporation may, if
3225	3225	reasonable, satisfy the right of a member to copy records
3226	3226	under Section 10A-3A-4.02 by furnishing to the member copies
3227	3227	by photocopy or other means as are chosen by the membership
3228	3228	nonprofit corporation, including furnishing copies through
3229	3229	1569
3230	3230	1570
3231	3231	1571
3232	3232	1572
3233	3233	1573
3234	3234	1574
3235	3235	1575
3236	3236	1576
3237	3237	1577
3238	3238	1578
3239	3239	1579
3240	3240	1580
3241	3241	1581
3242	3242	1582
3243	3243	1583
3244	3244	1584
3245	3245	1585
3246	3246	1586
3247	3247	1587
3248	3248	1588
3249	3249	1589
3250	3250	1590
3251	3251	1591
3252	3252	1592
3253	3253	1593
3254	3254	1594
3255	3255	1595
3256	3256	1596 SB245 INTRODUCEDSB245 INTRODUCED
3257	3257	Page 58
3258	3258	electronic transmission.
3259	3259	(c) The membership nonprofit corporation may comply at
3260	3260	its expense with a member's demand to inspect the record of
3261	3261	members under Section 10A-3A-4.02(b)(4) by providing the
3262	3262	member with a list of members that was compiled no earlier
3263	3263	than the date of the member's demand.
3264	3264	(d) The membership nonprofit corporation may impose a
3265	3265	reasonable charge to cover the costs of providing copies of
3266	3266	documents to the member, which may be based on an estimate of
3267	3267	those costs.
3268	3268	§10A-3A-4.04. Court-ordered inspection of membership
3269	3269	nonprofit corporation.
3270	3270	(a) If a membership nonprofit corporation does not
3271	3271	allow a member who complies with Section 10A-3A-4.02(a) to
3272	3272	inspect and copy any records required by that section to be
3273	3273	available for inspection, the designated court, and if none,
3274	3274	the circuit court for the county in which the membership
3275	3275	nonprofit corporation's principal office is located in this
3276	3276	state, and if none in this state, the circuit court for the
3277	3277	county in which the membership nonprofit corporation's most
3278	3278	recent registered office is located may summarily order
3279	3279	inspection and copying of the records demanded at the
3280	3280	membership nonprofit corporation's expense upon application of
3281	3281	the member.
3282	3282	(b) If a membership nonprofit corporation does not
3283	3283	within a reasonable time allow a member who complies with
3284	3284	Section 10A-3A-4.02(b) to inspect and copy the records as
3285	3285	required by that section, the member who complies with Section
3286	3286	1597
3287	3287	1598
3288	3288	1599
3289	3289	1600
3290	3290	1601
3291	3291	1602
3292	3292	1603
3293	3293	1604
3294	3294	1605
3295	3295	1606
3296	3296	1607
3297	3297	1608
3298	3298	1609
3299	3299	1610
3300	3300	1611
3301	3301	1612
3302	3302	1613
3303	3303	1614
3304	3304	1615
3305	3305	1616
3306	3306	1617
3307	3307	1618
3308	3308	1619
3309	3309	1620
3310	3310	1621
3311	3311	1622
3312	3312	1623
3313	3313	1624 SB245 INTRODUCEDSB245 INTRODUCED
3314	3314	Page 59
3315	3315	10A-3A-4.02(c) may apply to the designated court, and if none,
3316	3316	the circuit court for the county in which the membership
3317	3317	nonprofit corporation's principal office is located in this
3318	3318	state, and if none in this state, the circuit court for the
3319	3319	county in which the membership nonprofit corporation's most
3320	3320	recent registered office is located for an order to permit
3321	3321	inspection and copying of the records demanded. The court
3322	3322	shall dispose of an application under this subsection on an
3323	3323	expedited basis.
3324	3324	(c) If the court orders inspection and copying of the
3325	3325	records demanded under Section 10A-3A-4.02(b), it may impose
3326	3326	reasonable restrictions on their confidentiality, use or
3327	3327	distribution by the demanding member and it shall also order
3328	3328	the membership nonprofit corporation to pay the member's
3329	3329	expenses incurred to obtain the order unless the membership
3330	3330	nonprofit corporation establishes that it refused inspection
3331	3331	in good faith because the membership nonprofit corporation
3332	3332	had:
3333	3333	(1) a reasonable basis for doubt about the right of the
3334	3334	member to inspect the records demanded; or
3335	3335	(2) required reasonable restrictions on the
3336	3336	confidentiality, use, or distribution of the records demanded
3337	3337	to which the demanding member had been unwilling to agree.
3338	3338	§10A-3A-4.05. Inspection rights of directors.
3339	3339	(a) A director of a nonprofit corporation is entitled
3340	3340	to inspect and copy the books, records, and documents of the
3341	3341	nonprofit corporation at any reasonable time to the extent
3342	3342	reasonably related to the performance of the director's duties
3343	3343	1625
3344	3344	1626
3345	3345	1627
3346	3346	1628
3347	3347	1629
3348	3348	1630
3349	3349	1631
3350	3350	1632
3351	3351	1633
3352	3352	1634
3353	3353	1635
3354	3354	1636
3355	3355	1637
3356	3356	1638
3357	3357	1639
3358	3358	1640
3359	3359	1641
3360	3360	1642
3361	3361	1643
3362	3362	1644
3363	3363	1645
3364	3364	1646
3365	3365	1647
3366	3366	1648
3367	3367	1649
3368	3368	1650
3369	3369	1651
3370	3370	1652 SB245 INTRODUCEDSB245 INTRODUCED
3371	3371	Page 60
3372	3372	as a director, including duties as a member of a board
3373	3373	committee, but not for any other purpose or in any manner that
3374	3374	would violate any duty to the nonprofit corporation.
3375	3375	(b) The designated court, and if none, the circuit
3376	3376	court for the county in which the nonprofit corporation's
3377	3377	principal office is located in this state, and if none in this
3378	3378	state, the circuit court for the county in which the nonprofit
3379	3379	corporation's most recent registered office is located may
3380	3380	order inspection and copying of the books, records, and
3381	3381	documents at the nonprofit corporation's expense, upon
3382	3382	application of a director who has been refused inspection
3383	3383	rights, unless the nonprofit corporation establishes that the
3384	3384	director is not entitled to inspection rights. The court shall
3385	3385	dispose of an application under this subsection on an
3386	3386	expedited basis.
3387	3387	(c) If an order is issued, the court may include
3388	3388	provisions protecting the nonprofit corporation from undue
3389	3389	burden or expense, and prohibiting the director from using
3390	3390	information obtained upon exercise of the inspection rights in
3391	3391	a manner that would violate a duty to the nonprofit
3392	3392	corporation, and may also order the nonprofit corporation to
3393	3393	reimburse the director for the director's expenses incurred in
3394	3394	connection with the application.
3395	3395	§10A-3A-4.06. Limitations on use of membership list.
3396	3396	(a) Unless otherwise permitted by the certificate of
3397	3397	incorporation or bylaws of a membership nonprofit corporation,
3398	3398	a membership list or any part thereof may not be obtained or
3399	3399	used by any person for any purpose unrelated to a member's
3400	3400	1653
3401	3401	1654
3402	3402	1655
3403	3403	1656
3404	3404	1657
3405	3405	1658
3406	3406	1659
3407	3407	1660
3408	3408	1661
3409	3409	1662
3410	3410	1663
3411	3411	1664
3412	3412	1665
3413	3413	1666
3414	3414	1667
3415	3415	1668
3416	3416	1669
3417	3417	1670
3418	3418	1671
3419	3419	1672
3420	3420	1673
3421	3421	1674
3422	3422	1675
3423	3423	1676
3424	3424	1677
3425	3425	1678
3426	3426	1679
3427	3427	1680 SB245 INTRODUCEDSB245 INTRODUCED
3428	3428	Page 61
3429	3429	interest as a member without the consent of the board of
3430	3430	directors, including without limitation:
3431	3431	(1) to solicit money or property unless the money or
3432	3432	property will be used solely to solicit the votes of the
3433	3433	members in an election to be held by the membership nonprofit
3434	3434	corporation;
3435	3435	(2) for any commercial purpose; or
3436	3436	(3) to be sold or purchased by any person.
3437	3437	(b) Instead of making a membership list available for
3438	3438	inspection and copying under this Division, a membership
3439	3439	nonprofit corporation may elect to proceed under the
3440	3440	procedures set forth in Section 10A-3A-7.20(e).
3441	3441	§10A-3A-4.07. Grant of inspection rights to designated
3442	3442	persons.
3443	3443	If the certificate of incorporation provides approval
3444	3444	rights to a person or group of persons as authorized in
3445	3445	Section 10A-3A-2.02(b)(ix), then the certificate of
3446	3446	incorporation may grant inspection rights to that person or
3447	3447	group of persons. Any grant of inspection rights under this
3448	3448	section may set forth the scope, rights, limits, restrictions,
3449	3449	conditions, confidentiality, and any other matter related to
3450	3450	that grant of the inspection rights.
3451	3451	DIVISION B. FINANCIAL STATEMENTS FOR MEMBERS.
3452	3452	§10A-3A-4.20. Financial statements for members.
3453	3453	(a) Upon the written request of a member, a membership
3454	3454	nonprofit corporation shall deliver or make available to the
3455	3455	requesting member by posting on its website or by other
3456	3456	generally recognized means annual financial statements for the
3457	3457	1681
3458	3458	1682
3459	3459	1683
3460	3460	1684
3461	3461	1685
3462	3462	1686
3463	3463	1687
3464	3464	1688
3465	3465	1689
3466	3466	1690
3467	3467	1691
3468	3468	1692
3469	3469	1693
3470	3470	1694
3471	3471	1695
3472	3472	1696
3473	3473	1697
3474	3474	1698
3475	3475	1699
3476	3476	1700
3477	3477	1701
3478	3478	1702
3479	3479	1703
3480	3480	1704
3481	3481	1705
3482	3482	1706
3483	3483	1707
3484	3484	1708 SB245 INTRODUCEDSB245 INTRODUCED
3485	3485	Page 62
3486	3486	most recent fiscal year of the membership nonprofit
3487	3487	corporation for which annual financial statements have been
3488	3488	prepared for the membership nonprofit corporation. If
3489	3489	financial statements have been prepared for the membership
3490	3490	nonprofit corporation on the basis of generally accepted
3491	3491	accounting principles for that specified period, the
3492	3492	membership nonprofit corporation shall deliver or make
3493	3493	available those financial statements to the requesting member.
3494	3494	If the annual financial statements to be delivered or made
3495	3495	available to the requesting member are audited or otherwise
3496	3496	reported upon by a public accountant, the report shall also be
3497	3497	delivered or made available to the requesting member.
3498	3498	(b) A membership nonprofit corporation shall deliver,
3499	3499	or make available and provide written notice of availability
3500	3500	of, the financial statements required under subsection (a) to
3501	3501	the requesting member within five business days of delivery of
3502	3502	the written request to the membership nonprofit corporation.
3503	3503	(c) Notwithstanding the provisions of subsections (a)
3504	3504	and (b) of this section:
3505	3505	(1) as a condition to delivering or making available
3506	3506	financial statements to a requesting member, the membership
3507	3507	nonprofit corporation may require the requesting member to
3508	3508	agree to reasonable restrictions on the confidentiality, use,
3509	3509	and distribution of the financial statements; and
3510	3510	(2) the membership nonprofit corporation may, if it
3511	3511	reasonably determines that the member's request is not made in
3512	3512	good faith or for a proper purpose, decline to deliver or make
3513	3513	available the financial statements to that member.
3514	3514	1709
3515	3515	1710
3516	3516	1711
3517	3517	1712
3518	3518	1713
3519	3519	1714
3520	3520	1715
3521	3521	1716
3522	3522	1717
3523	3523	1718
3524	3524	1719
3525	3525	1720
3526	3526	1721
3527	3527	1722
3528	3528	1723
3529	3529	1724
3530	3530	1725
3531	3531	1726
3532	3532	1727
3533	3533	1728
3534	3534	1729
3535	3535	1730
3536	3536	1731
3537	3537	1732
3538	3538	1733
3539	3539	1734
3540	3540	1735
3541	3541	1736 SB245 INTRODUCEDSB245 INTRODUCED
3542	3542	Page 63
3543	3543	(d) If a membership nonprofit corporation does not
3544	3544	respond to a member's request for annual financial statements
3545	3545	pursuant to this section in accordance with subsection (b)
3546	3546	within five business days of delivery of the request to the
3547	3547	membership nonprofit corporation:
3548	3548	(1) The requesting member may apply to the designated
3549	3549	court, and if none, the circuit court for the county in which
3550	3550	the membership nonprofit corporation's principal office is
3551	3551	located in this state, and if none in this state, the circuit
3552	3552	court for the county in which the membership nonprofit
3553	3553	corporation's most recent registered office is located for an
3554	3554	order requiring delivery of or access to the requested
3555	3555	financial statements. The court shall dispose of an
3556	3556	application under this subsection on an expedited basis.
3557	3557	(2) If the court orders delivery or access to the
3558	3558	requested financial statements, it may impose reasonable
3559	3559	restrictions on their confidentiality, use, or distribution.
3560	3560	(3) In the proceeding, if the membership nonprofit
3561	3561	corporation has declined to deliver or make available the
3562	3562	financial statements because the member had been unwilling to
3563	3563	agree to restrictions proposed by the membership nonprofit
3564	3564	corporation on the confidentiality, use, and distribution of
3565	3565	the financial statements, the membership nonprofit corporation
3566	3566	shall have the burden of demonstrating that the restrictions
3567	3567	proposed by the membership nonprofit corporation were
3568	3568	reasonable.
3569	3569	(4) In the proceeding, if the membership nonprofit
3570	3570	corporation has declined to deliver or make available the
3571	3571	1737
3572	3572	1738
3573	3573	1739
3574	3574	1740
3575	3575	1741
3576	3576	1742
3577	3577	1743
3578	3578	1744
3579	3579	1745
3580	3580	1746
3581	3581	1747
3582	3582	1748
3583	3583	1749
3584	3584	1750
3585	3585	1751
3586	3586	1752
3587	3587	1753
3588	3588	1754
3589	3589	1755
3590	3590	1756
3591	3591	1757
3592	3592	1758
3593	3593	1759
3594	3594	1760
3595	3595	1761
3596	3596	1762
3597	3597	1763
3598	3598	1764 SB245 INTRODUCEDSB245 INTRODUCED
3599	3599	Page 64
3600	3600	financial statements pursuant to Section 10A-3A-4.20(c)(2),
3601	3601	the membership nonprofit corporation shall have the burden of
3602	3602	demonstrating that it had reasonably determined that the
3603	3603	member's request was not made in good faith or for a proper
3604	3604	purpose.
3605	3605	(5) If the court orders delivery or access to the
3606	3606	requested financial statements, it shall order the membership
3607	3607	nonprofit corporation to pay the member's expenses incurred to
3608	3608	obtain the order unless the membership nonprofit corporation
3609	3609	establishes that it had refused delivery or access to the
3610	3610	requested financial statements because the member had refused
3611	3611	to agree to reasonable restrictions on the confidentiality,
3612	3612	use, or distribution of the financial statements or that the
3613	3613	membership nonprofit corporation had reasonably determined
3614	3614	that the member's request was not made in good faith or for a
3615	3615	proper purpose.
3616	3616	ARTICLE 6. MEMBERSHIPS AND FINANCIAL PROVISIONS.
3617	3617	DIVISION A. ADMISSION OF MEMBERS.
3618	3618	§10A-3A-6.01. Members.
3619	3619	(a) A nonprofit corporation may have one or more
3620	3620	classes of members or may have no members. If the nonprofit
3621	3621	corporation has one or more classes of members, the
3622	3622	designation of the class or classes, the manner of admission
3623	3623	and the qualifications and rights of the members of each class
3624	3624	shall be set forth in the certificate of incorporation or
3625	3625	bylaws. Subject to Section 10A-3A-14.01(c), if the nonprofit
3626	3626	corporation will have members, that fact shall be set forth in
3627	3627	the certificate of incorporation. If the nonprofit corporation
3628	3628	1765
3629	3629	1766
3630	3630	1767
3631	3631	1768
3632	3632	1769
3633	3633	1770
3634	3634	1771
3635	3635	1772
3636	3636	1773
3637	3637	1774
3638	3638	1775
3639	3639	1776
3640	3640	1777
3641	3641	1778
3642	3642	1779
3643	3643	1780
3644	3644	1781
3645	3645	1782
3646	3646	1783
3647	3647	1784
3648	3648	1785
3649	3649	1786
3650	3650	1787
3651	3651	1788
3652	3652	1789
3653	3653	1790
3654	3654	1791
3655	3655	1792 SB245 INTRODUCEDSB245 INTRODUCED
3656	3656	Page 65
3657	3657	will not have members, that fact shall be set forth in the
3658	3658	certificate of incorporation.
3659	3659	(b) Except as otherwise provided in this chapter or in
3660	3660	the certificate of incorporation, if the certificate of
3661	3661	incorporation of a nonprofit corporation states that the
3662	3662	nonprofit corporation will have members, but that nonprofit
3663	3663	corporation has in fact no members entitled to vote on a
3664	3664	matter, then any provision of this chapter or any other
3665	3665	provision of law requiring notice to, the presence of, or the
3666	3666	vote, consent, or other action by members of that nonprofit
3667	3667	corporation in connection with the matter shall be satisfied
3668	3668	by notice to, the presence of, or the vote, consent, or other
3669	3669	action by the board of directors of the nonprofit corporation.
3670	3670	(c) Except as otherwise provided in the certificate of
3671	3671	incorporation, if the certificate of incorporation of a
3672	3672	nonprofit corporation states that the nonprofit corporation
3673	3673	will not have members, then notice to, the presence of, or the
3674	3674	vote, consent, or other action by board of directors of the
3675	3675	nonprofit corporation in connection with the matter shall be
3676	3676	satisfied by notice to, the presence of, or the vote, consent,
3677	3677	or other action by the board of directors of the nonprofit
3678	3678	corporation.
3679	3679	§10A-3A-6.02. Membership status.
3680	3680	(a) A person may not be admitted as a member of a
3681	3681	nonprofit corporation without that person's consent.
3682	3682	(b) If a membership nonprofit corporation provides
3683	3683	certificates of membership to the members, the certificates
3684	3684	shall not be registered or transferable except as provided in
3685	3685	1793
3686	3686	1794
3687	3687	1795
3688	3688	1796
3689	3689	1797
3690	3690	1798
3691	3691	1799
3692	3692	1800
3693	3693	1801
3694	3694	1802
3695	3695	1803
3696	3696	1804
3697	3697	1805
3698	3698	1806
3699	3699	1807
3700	3700	1808
3701	3701	1809
3702	3702	1810
3703	3703	1811
3704	3704	1812
3705	3705	1813
3706	3706	1814
3707	3707	1815
3708	3708	1816
3709	3709	1817
3710	3710	1818
3711	3711	1819
3712	3712	1820 SB245 INTRODUCEDSB245 INTRODUCED
3713	3713	Page 66
3714	3714	the certificate of incorporation or bylaws. Each certificate
3715	3715	of membership shall comply with Sections 10A-1-3.42,
3716	3716	10A-1-3.43(b), and 10A-1-3.44. No membership certificate shall
3717	3717	be issued in bearer form.
3718	3718	(c) A person is not a member of a nonprofit corporation
3719	3719	unless (i) the nonprofit corporation is a membership nonprofit
3720	3720	corporation and (ii) the person meets the definition of a
3721	3721	"member" in Section 10A-3A-1.02, regardless of whether the
3722	3722	nonprofit corporation designates or refers to the person as a
3723	3723	member.
3724	3724	(d) A person is not a member of a nonmembership
3725	3725	nonprofit corporation, regardless of whether the nonmembership
3726	3726	nonprofit corporation designates or refers to the person as a
3727	3727	member.
3728	3728	§10A-3A-6.03. Admission of members.
3729	3729	Unless otherwise provided by law or in the certificate
3730	3730	of incorporation or bylaws of a membership nonprofit
3731	3731	corporation, the board of directors shall establish conditions
3732	3732	for admission of members (for such contribution, if any, as
3733	3733	the board of directors may determine), admit members, and
3734	3734	issue memberships.
3735	3735	DIVISION B. RIGHTS AND OBLIGATIONS OF MEMBERS.
3736	3736	§10A-3A-6.10. Differences in rights and obligations of
3737	3737	members.
3738	3738	Except as otherwise provided in the certificate of
3739	3739	incorporation or bylaws, each member of a membership nonprofit
3740	3740	corporation has the same rights and obligations as every other
3741	3741	member with respect to voting, dissolution, membership
3742	3742	1821
3743	3743	1822
3744	3744	1823
3745	3745	1824
3746	3746	1825
3747	3747	1826
3748	3748	1827
3749	3749	1828
3750	3750	1829
3751	3751	1830
3752	3752	1831
3753	3753	1832
3754	3754	1833
3755	3755	1834
3756	3756	1835
3757	3757	1836
3758	3758	1837
3759	3759	1838
3760	3760	1839
3761	3761	1840
3762	3762	1841
3763	3763	1842
3764	3764	1843
3765	3765	1844
3766	3766	1845
3767	3767	1846
3768	3768	1847
3769	3769	1848 SB245 INTRODUCEDSB245 INTRODUCED
3770	3770	Page 67
3771	3771	transfer, and other matters.
3772	3772	§10A-3A-6.11. Transfers.
3773	3773	(a) Except as provided in the certificate of
3774	3774	incorporation or bylaws, a member of a membership nonprofit
3775	3775	corporation may not transfer a membership or any right arising
3776	3776	therefrom.
3777	3777	(b) Where the right to transfer a membership has been
3778	3778	provided, a restriction on that right shall not be binding
3779	3779	with respect to a member holding a membership issued prior to
3780	3780	the adoption of the restriction unless the restriction is
3781	3781	approved by the affected member.
3782	3782	§10A-3A-6.12. Member's liability to third parties.
3783	3783	A member of a nonprofit corporation is not personally
3784	3784	liable for any liabilities of the nonprofit corporation
3785	3785	(including liabilities arising from acts of the nonprofit
3786	3786	corporation).
3787	3787	§10A-3A-6.13. Member's liability for dues, assessments,
3788	3788	and fees.
3789	3789	(a) A membership nonprofit corporation may levy dues,
3790	3790	assessments, fees, fines, late charges, interest, penalties,
3791	3791	and other such sums on its members to the extent authorized in
3792	3792	the certificate of incorporation or bylaws. Dues, assessments,
3793	3793	fees, fines, late charges, interest, penalties, and other such
3794	3794	sums may be imposed on members of the same class either alike
3795	3795	or in different amounts or proportions, and may be imposed on
3796	3796	a different basis on different classes of members. Members of
3797	3797	a class may be made exempt from dues, assessments, fees,
3798	3798	fines, late charges, interest, penalties, and other such sums
3799	3799	1849
3800	3800	1850
3801	3801	1851
3802	3802	1852
3803	3803	1853
3804	3804	1854
3805	3805	1855
3806	3806	1856
3807	3807	1857
3808	3808	1858
3809	3809	1859
3810	3810	1860
3811	3811	1861
3812	3812	1862
3813	3813	1863
3814	3814	1864
3815	3815	1865
3816	3816	1866
3817	3817	1867
3818	3818	1868
3819	3819	1869
3820	3820	1870
3821	3821	1871
3822	3822	1872
3823	3823	1873
3824	3824	1874
3825	3825	1875
3826	3826	1876 SB245 INTRODUCEDSB245 INTRODUCED
3827	3827	Page 68
3828	3828	to the extent provided in the certificate of incorporation or
3829	3829	bylaws.
3830	3830	(b) The amount and method of collection of dues,
3831	3831	assessments, fees, fines, late charges, interest, penalties,
3832	3832	and other such sums may be fixed in the certificate of
3833	3833	incorporation or bylaws, or the certificate of incorporation
3834	3834	or bylaws may authorize the board of directors or members to
3835	3835	fix the amount and method of collection.
3836	3836	(c) The certificate of incorporation or bylaws may
3837	3837	provide reasonable means to enforce the collection of dues,
3838	3838	assessments, fees, fines, late charges, interest, penalties,
3839	3839	and other such sums, including, but not limited to,
3840	3840	termination, suspension, or reinstatement of membership.
3841	3841	DIVISION C. RESIGNATION AND TERMINATION.
3842	3842	§10A-3A-6.20. Resignation.
3843	3843	(a) A member of a membership nonprofit corporation may
3844	3844	resign at any time.
3845	3845	(b) The resignation of a member does not relieve the
3846	3846	member from any obligations incurred or commitments made prior
3847	3847	to resignation.
3848	3848	§10A-3A-6.21. Termination and suspension.
3849	3849	(a) A membership in a membership nonprofit corporation
3850	3850	may be terminated or suspended for the reasons and in the
3851	3851	manner provided in the certificate of incorporation or bylaws.
3852	3852	(b) A proceeding challenging a termination or
3853	3853	suspension for any reason must be commenced within one year
3854	3854	after the effective date of the termination or suspension.
3855	3855	(c) The termination or suspension of a member does not
3856	3856	1877
3857	3857	1878
3858	3858	1879
3859	3859	1880
3860	3860	1881
3861	3861	1882
3862	3862	1883
3863	3863	1884
3864	3864	1885
3865	3865	1886
3866	3866	1887
3867	3867	1888
3868	3868	1889
3869	3869	1890
3870	3870	1891
3871	3871	1892
3872	3872	1893
3873	3873	1894
3874	3874	1895
3875	3875	1896
3876	3876	1897
3877	3877	1898
3878	3878	1899
3879	3879	1900
3880	3880	1901
3881	3881	1902
3882	3882	1903
3883	3883	1904 SB245 INTRODUCEDSB245 INTRODUCED
3884	3884	Page 69
3885	3885	relieve the member from any obligations incurred or
3886	3886	commitments made prior to the termination or suspension.
3887	3887	DIVISION D. FINANCIAL PROVISIONS.
3888	3888	§10A-3A-6.40. Distributions.
3889	3889	(a) Except as permitted or required by law other than
3890	3890	this chapter, or contractual obligations, a nonprofit
3891	3891	corporation shall not make distributions to its members,
3892	3892	directors, or officers. Any permitted or required distribution
3893	3893	is subject to the limitations set forth in subsection (c).
3894	3894	(b) The board of directors of a membership nonprofit
3895	3895	corporation may fix the record date for determining members
3896	3896	entitled to a distribution, which date may not be retroactive.
3897	3897	If the board of directors does not fix a record date for
3898	3898	determining members entitled to a distribution, the record
3899	3899	date is the date the board of directors authorizes the
3900	3900	distribution.
3901	3901	(c) No distribution may be made if, after giving it
3902	3902	effect:
3903	3903	(1) the nonprofit corporation would not be able to pay
3904	3904	its debts as they become due in the usual course of its
3905	3905	activities and affairs; or
3906	3906	(2) the nonprofit corporation's unrestricted total
3907	3907	assets would be less than the sum of its total liabilities
3908	3908	other than those liabilities which are solely secured by the
3909	3909	nonprofit corporation's restricted assets.
3910	3910	(d) The board of directors may base a determination
3911	3911	that a distribution is not prohibited under subsection (c)
3912	3912	either on financial statements prepared on the basis of
3913	3913	1905
3914	3914	1906
3915	3915	1907
3916	3916	1908
3917	3917	1909
3918	3918	1910
3919	3919	1911
3920	3920	1912
3921	3921	1913
3922	3922	1914
3923	3923	1915
3924	3924	1916
3925	3925	1917
3926	3926	1918
3927	3927	1919
3928	3928	1920
3929	3929	1921
3930	3930	1922
3931	3931	1923
3932	3932	1924
3933	3933	1925
3934	3934	1926
3935	3935	1927
3936	3936	1928
3937	3937	1929
3938	3938	1930
3939	3939	1931
3940	3940	1932 SB245 INTRODUCEDSB245 INTRODUCED
3941	3941	Page 70
3942	3942	accounting practices and principles that are reasonable in the
3943	3943	circumstances or on a fair valuation or other method that is
3944	3944	reasonable in the circumstances.
3945	3945	(e) The effect of a distribution under subsection (c)
3946	3946	is measured as of (i) the date the distribution is authorized
3947	3947	if the payment occurs within 120 days after the date of
3948	3948	authorization or (ii) the date the payment is made if it
3949	3949	occurs more than 120 days after the date of authorization.
3950	3950	(f) This section shall not apply to distributions in
3951	3951	liquidation under Article 11.
3952	3952	(g) This section shall not apply to a contract or
3953	3953	transaction with a member, director, or officer, which
3954	3954	contract or transaction is authorized pursuant to Section
3955	3955	10A-3A-8.60.
3956	3956	§10A-3A-6.41. Compensation and benefits.
3957	3957	A nonprofit corporation may pay reasonable
3958	3958	compensation, reasonable payments made in the ordinary course
3959	3959	of the nonprofit corporation's activities and affairs, or
3960	3960	reimburse reasonable expenses to its members, directors, or
3961	3961	officers for services rendered and may confer reasonable
3962	3962	benefits upon its members or nonmembers in conformity with its
3963	3963	purposes.
3964	3964	§10A-3A-6.42. Capital contributions of members.
3965	3965	(a) A membership nonprofit corporation may provide in
3966	3966	its certificate of incorporation or bylaws that members, upon
3967	3967	or subsequent to admission, must make capital contributions.
3968	3968	Except as provided in the certificate of incorporation or
3969	3969	bylaws, the amount shall be fixed by the board of directors.
3970	3970	1933
3971	3971	1934
3972	3972	1935
3973	3973	1936
3974	3974	1937
3975	3975	1938
3976	3976	1939
3977	3977	1940
3978	3978	1941
3979	3979	1942
3980	3980	1943
3981	3981	1944
3982	3982	1945
3983	3983	1946
3984	3984	1947
3985	3985	1948
3986	3986	1949
3987	3987	1950
3988	3988	1951
3989	3989	1952
3990	3990	1953
3991	3991	1954
3992	3992	1955
3993	3993	1956
3994	3994	1957
3995	3995	1958
3996	3996	1959
3997	3997	1960 SB245 INTRODUCEDSB245 INTRODUCED
3998	3998	Page 71
3999	3999	The requirement of a capital contribution may apply to all
4000	4000	members, or to the members of a single class, or to members of
4001	4001	different classes in different amounts or proportions.
4002	4002	(b) The adoption or amendment of a capital contribution
4003	4003	requirement, whether or not approved by the members, shall not
4004	4004	apply to a member who did not vote in favor of the adoption or
4005	4005	amendment until 30 days after notice of the adoption or
4006	4006	amendment has been delivered to the member.
4007	4007	§10A-3A-6.43. Shares of stock prohibited.
4008	4008	A nonprofit corporation shall not have or issue shares
4009	4009	of stock.
4010	4010	ARTICLE 7. MEMBER MEETINGS.
4011	4011	DIVISION A. PROCEDURES.
4012	4012	§10A-3A-7.01. Annual and regular meetings of the
4013	4013	members.
4014	4014	(a) Unless otherwise provided in the certificate of
4015	4015	incorporation, a membership nonprofit corporation shall hold a
4016	4016	meeting of members annually at a time stated in or fixed in
4017	4017	accordance with the certificate of incorporation or bylaws.
4018	4018	(b) A membership nonprofit corporation may hold regular
4019	4019	meetings of the members at times stated in or fixed in
4020	4020	accordance with the certificate of incorporation or bylaws.
4021	4021	(c) Unless the board of directors determines to hold
4022	4022	the meeting solely by means of remote communication in
4023	4023	accordance with Section 10A-3A-7.09(c), annual and regular
4024	4024	meetings of the members may be held (i) in or out of this
4025	4025	state at the place stated in or fixed in accordance with the
4026	4026	certificate of incorporation or bylaws or (ii) if no place is
4027	4027	1961
4028	4028	1962
4029	4029	1963
4030	4030	1964
4031	4031	1965
4032	4032	1966
4033	4033	1967
4034	4034	1968
4035	4035	1969
4036	4036	1970
4037	4037	1971
4038	4038	1972
4039	4039	1973
4040	4040	1974
4041	4041	1975
4042	4042	1976
4043	4043	1977
4044	4044	1978
4045	4045	1979
4046	4046	1980
4047	4047	1981
4048	4048	1982
4049	4049	1983
4050	4050	1984
4051	4051	1985
4052	4052	1986
4053	4053	1987
4054	4054	1988 SB245 INTRODUCEDSB245 INTRODUCED
4055	4055	Page 72
4056	4056	stated in or fixed in accordance with the certificate of
4057	4057	incorporation or bylaws, at the membership nonprofit
4058	4058	corporation's principal office.
4059	4059	(d) The failure to hold an annual or regular meeting of
4060	4060	the members at the time stated in or fixed in accordance with
4061	4061	a membership nonprofit corporation's certificate of
4062	4062	incorporation or bylaws does not affect the validity of any
4063	4063	corporate action.
4064	4064	§10A-3A-7.02. Special meetings.
4065	4065	(a) Special meetings of the members in a membership
4066	4066	nonprofit corporation may be called by the board of directors
4067	4067	or by the person or persons as may be authorized by the
4068	4068	certificate of incorporation or by the bylaws.
4069	4069	(b) In the event that the certificate of incorporation
4070	4070	or bylaws of a membership nonprofit corporation allow members
4071	4071	to demand a special meeting of the members, then if not
4072	4072	otherwise fixed under Section 10A-3A-7.03 or Section
4073	4073	10A-3A-7.07, the record date for determining members entitled
4074	4074	to demand a special meeting shall be the first date on which a
4075	4075	signed member's demand is delivered to the membership
4076	4076	nonprofit corporation. No written demand for a special meeting
4077	4077	shall be effective unless, within 60 days of the earliest date
4078	4078	on which the demand delivered to the membership nonprofit
4079	4079	corporation as allowed by the certificate of incorporation or
4080	4080	bylaws was signed, written demands signed by members holding
4081	4081	at least the percentage of votes specified in or fixed in
4082	4082	accordance with the certificate of incorporation or bylaws
4083	4083	have been delivered to the membership nonprofit corporation.
4084	4084	1989
4085	4085	1990
4086	4086	1991
4087	4087	1992
4088	4088	1993
4089	4089	1994
4090	4090	1995
4091	4091	1996
4092	4092	1997
4093	4093	1998
4094	4094	1999
4095	4095	2000
4096	4096	2001
4097	4097	2002
4098	4098	2003
4099	4099	2004
4100	4100	2005
4101	4101	2006
4102	4102	2007
4103	4103	2008
4104	4104	2009
4105	4105	2010
4106	4106	2011
4107	4107	2012
4108	4108	2013
4109	4109	2014
4110	4110	2015
4111	4111	2016 SB245 INTRODUCEDSB245 INTRODUCED
4112	4112	Page 73
4113	4113	(c) Unless the board of directors determines to hold
4114	4114	the meeting solely by means of remote participation in
4115	4115	accordance with Section 10A-3A-7.09(c), special meetings of
4116	4116	members may be held (i) in or out of this state at the place
4117	4117	stated in or fixed in accordance with the certificate of
4118	4118	incorporation or bylaws or (ii) if no place is stated in or
4119	4119	fixed in accordance with the certificate of incorporation or
4120	4120	bylaws, at the membership nonprofit corporation's principal
4121	4121	office.
4122	4122	(d) Only business within the purpose or purposes
4123	4123	described in the meeting notice required by Section
4124	4124	10A-3A-7.05(c) may be conducted at a special meeting of
4125	4125	members.
4126	4126	§10A-3A-7.03. Court-ordered meetings.
4127	4127	(a) The designated court, and if none, the circuit
4128	4128	court for the county in which the membership nonprofit
4129	4129	corporation's principal office is located in this state, and,
4130	4130	if none in this state, the circuit court for the county in
4131	4131	which the membership nonprofit corporation's most recent
4132	4132	registered office is located may summarily order a meeting to
4133	4133	be held:
4134	4134	(1) on application of any member of the membership
4135	4135	nonprofit corporation entitled to participate in an annual
4136	4136	meeting if an annual meeting was not held or action by written
4137	4137	consent in lieu of an annual meeting did not become effective
4138	4138	within the earlier of 12 months after the end of the
4139	4139	membership nonprofit corporation's fiscal year or 15 months
4140	4140	after its last annual meeting; or
4141	4141	2017
4142	4142	2018
4143	4143	2019
4144	4144	2020
4145	4145	2021
4146	4146	2022
4147	4147	2023
4148	4148	2024
4149	4149	2025
4150	4150	2026
4151	4151	2027
4152	4152	2028
4153	4153	2029
4154	4154	2030
4155	4155	2031
4156	4156	2032
4157	4157	2033
4158	4158	2034
4159	4159	2035
4160	4160	2036
4161	4161	2037
4162	4162	2038
4163	4163	2039
4164	4164	2040
4165	4165	2041
4166	4166	2042
4167	4167	2043
4168	4168	2044 SB245 INTRODUCEDSB245 INTRODUCED
4169	4169	Page 74
4170	4170	(2) on application of one or more members who signed a
4171	4171	demand for a special meeting valid under Section 10A-3A-7.02,
4172	4172	if:
4173	4173	(i) notice of the special meeting was not given within
4174	4174	30 days after the first day on which the requisite number of
4175	4175	demands have been delivered to the membership nonprofit
4176	4176	corporation; or
4177	4177	(ii) the special meeting was not held in accordance
4178	4178	with the notice.
4179	4179	(b) The court may fix the time and place of the
4180	4180	meeting, determine the members entitled to participate in the
4181	4181	meeting, specify a record date or dates for determining
4182	4182	members entitled to notice of and to vote at the meeting,
4183	4183	prescribe the form and content of the meeting notice, fix the
4184	4184	quorum required for specific matters to be considered at the
4185	4185	meeting (or direct that the members represented at the meeting
4186	4186	constitute a quorum for action on those matters), and enter
4187	4187	other orders necessary to accomplish the purpose or purposes
4188	4188	of the meeting.
4189	4189	§10A-3A-7.04. Action without meeting.
4190	4190	(a) Unless otherwise provided in the certificate of
4191	4191	incorporation, any action required or permitted by this
4192	4192	chapter to be taken at any meeting of the members may be taken
4193	4193	without a meeting, and without prior notice, if one or more
4194	4194	consents in writing setting forth the action so taken are
4195	4195	signed by the members having not less than the minimum number
4196	4196	of votes that would be required to authorize or take the
4197	4197	action at a meeting at which all members entitled to vote on
4198	4198	2045
4199	4199	2046
4200	4200	2047
4201	4201	2048
4202	4202	2049
4203	4203	2050
4204	4204	2051
4205	4205	2052
4206	4206	2053
4207	4207	2054
4208	4208	2055
4209	4209	2056
4210	4210	2057
4211	4211	2058
4212	4212	2059
4213	4213	2060
4214	4214	2061
4215	4215	2062
4216	4216	2063
4217	4217	2064
4218	4218	2065
4219	4219	2066
4220	4220	2067
4221	4221	2068
4222	4222	2069
4223	4223	2070
4224	4224	2071
4225	4225	2072 SB245 INTRODUCEDSB245 INTRODUCED
4226	4226	Page 75
4227	4227	the action were present and voted. The action must be
4228	4228	evidenced by one or more written consents describing the
4229	4229	action taken, signed by the members approving the action and
4230	4230	delivered to the membership nonprofit corporation for filing
4231	4231	by the membership nonprofit corporation with the minutes or
4232	4232	corporate records.
4233	4233	(b) If not otherwise fixed under Section 10A-3A-7.07
4234	4234	and if prior action by the board of directors is not required
4235	4235	respecting the action to be taken without a meeting, the
4236	4236	record date for determining the members entitled to take
4237	4237	action without a meeting shall be the first date on which a
4238	4238	signed written consent is delivered to the membership
4239	4239	nonprofit corporation. If not otherwise fixed under Section
4240	4240	10A-3A-7.07 and if prior action by the board of directors is
4241	4241	required respecting the action to be taken without a meeting,
4242	4242	the record date shall be the close of business on the day the
4243	4243	resolution of the board of directors taking the prior action
4244	4244	is adopted. No written consent shall be effective to take the
4245	4245	corporate action referred to therein unless, within 60 days of
4246	4246	the earliest date on which a consent is delivered to the
4247	4247	membership nonprofit corporation as required by this section,
4248	4248	written consents signed by sufficient members to take the
4249	4249	action have been delivered to the membership nonprofit
4250	4250	corporation. Any person executing a consent may provide,
4251	4251	whether through instruction to an agent or otherwise, that the
4252	4252	consent will be effective at a future time, including a time
4253	4253	determined upon the happening of an event, occurring not later
4254	4254	than 60 days after the instruction is given or the provision
4255	4255	2073
4256	4256	2074
4257	4257	2075
4258	4258	2076
4259	4259	2077
4260	4260	2078
4261	4261	2079
4262	4262	2080
4263	4263	2081
4264	4264	2082
4265	4265	2083
4266	4266	2084
4267	4267	2085
4268	4268	2086
4269	4269	2087
4270	4270	2088
4271	4271	2089
4272	4272	2090
4273	4273	2091
4274	4274	2092
4275	4275	2093
4276	4276	2094
4277	4277	2095
4278	4278	2096
4279	4279	2097
4280	4280	2098
4281	4281	2099
4282	4282	2100 SB245 INTRODUCEDSB245 INTRODUCED
4283	4283	Page 76
4284	4284	is made, if evidence of the instruction or provision is
4285	4285	provided to the membership nonprofit corporation. A written
4286	4286	consent may be revoked by a writing to that effect delivered
4287	4287	to the membership nonprofit corporation before unrevoked
4288	4288	written consents sufficient in number to take the corporate
4289	4289	action have been delivered to the membership nonprofit
4290	4290	corporation.
4291	4291	(c) A consent signed pursuant to the provisions of this
4292	4292	section has the effect of a vote taken at a meeting and may be
4293	4293	described as such in any document. Unless the certificate of
4294	4294	incorporation, bylaws, or a resolution of the board of
4295	4295	directors provides for a reasonable delay to permit tabulation
4296	4296	of written consents, the action taken by written consent shall
4297	4297	be effective when written consents signed by sufficient
4298	4298	members to take the action have been delivered to the
4299	4299	membership nonprofit corporation.
4300	4300	(d) If action is taken by less than unanimous written
4301	4301	consent of the voting members, the membership nonprofit
4302	4302	corporation shall give its nonconsenting voting members
4303	4303	written notice of the action not more than 10 days after (i)
4304	4304	written consents sufficient to take the action have been
4305	4305	delivered to the membership nonprofit corporation, or (ii) any
4306	4306	later date that tabulation of consents is completed pursuant
4307	4307	to an authorization under subsection (c). The notice must
4308	4308	reasonably describe the action taken.
4309	4309	(e) The notice requirements in subsection (d) shall not
4310	4310	delay the effectiveness of actions taken by written consent,
4311	4311	and a failure to comply with those notice requirements shall
4312	4312	2101
4313	4313	2102
4314	4314	2103
4315	4315	2104
4316	4316	2105
4317	4317	2106
4318	4318	2107
4319	4319	2108
4320	4320	2109
4321	4321	2110
4322	4322	2111
4323	4323	2112
4324	4324	2113
4325	4325	2114
4326	4326	2115
4327	4327	2116
4328	4328	2117
4329	4329	2118
4330	4330	2119
4331	4331	2120
4332	4332	2121
4333	4333	2122
4334	4334	2123
4335	4335	2124
4336	4336	2125
4337	4337	2126
4338	4338	2127
4339	4339	2128 SB245 INTRODUCEDSB245 INTRODUCED
4340	4340	Page 77
4341	4341	not invalidate actions taken by written consent, provided that
4342	4342	this subsection shall not be deemed to limit judicial power to
4343	4343	fashion any appropriate remedy in favor of a member adversely
4344	4344	affected by a failure to give the notice within the required
4345	4345	time period.
4346	4346	§10A-3A-7.05. Notice of meetings.
4347	4347	(a) A membership nonprofit corporation shall notify
4348	4348	members of the place, if any, date, and time of each annual,
4349	4349	regular, or special meeting of the members no fewer than 10
4350	4350	nor more than 60 days before the meeting date. If the board of
4351	4351	directors has authorized participation by means of remote
4352	4352	communication pursuant to Section 10A-3A-7.09 for any class of
4353	4353	members or voting group, the notice to that class of members
4354	4354	or voting group must describe the means of remote
4355	4355	communication to be used. The notice must include the record
4356	4356	date for determining the members entitled to vote at the
4357	4357	meeting, if that date is different from the record date for
4358	4358	determining members entitled to notice of the meeting. Unless
4359	4359	the certificate of incorporation requires otherwise, the
4360	4360	membership nonprofit corporation is required to give notice
4361	4361	only to members entitled to vote at the meeting as of the
4362	4362	record date for determining the members entitled to notice of
4363	4363	the meeting.
4364	4364	(b) Unless this chapter, the certificate of
4365	4365	incorporation, or the bylaws require otherwise, notice of an
4366	4366	annual or regular meeting of the members need not include a
4367	4367	description of the purpose or purposes for which the meeting
4368	4368	is called.
4369	4369	2129
4370	4370	2130
4371	4371	2131
4372	4372	2132
4373	4373	2133
4374	4374	2134
4375	4375	2135
4376	4376	2136
4377	4377	2137
4378	4378	2138
4379	4379	2139
4380	4380	2140
4381	4381	2141
4382	4382	2142
4383	4383	2143
4384	4384	2144
4385	4385	2145
4386	4386	2146
4387	4387	2147
4388	4388	2148
4389	4389	2149
4390	4390	2150
4391	4391	2151
4392	4392	2152
4393	4393	2153
4394	4394	2154
4395	4395	2155
4396	4396	2156 SB245 INTRODUCEDSB245 INTRODUCED
4397	4397	Page 78
4398	4398	(c) Notice of a special meeting of members must include
4399	4399	a description of the purpose or purposes for which the meeting
4400	4400	is called.
4401	4401	(d) If not otherwise fixed under Section 10A-3A-7.03 or
4402	4402	Section 10A-3A-7.07, the record date for determining members
4403	4403	entitled to notice of and to vote at an annual, regular, or
4404	4404	special meeting of the members is the day before the first
4405	4405	notice is delivered to members.
4406	4406	(e) Unless the certificate of incorporation or bylaws
4407	4407	require otherwise, if an annual, regular, or special meeting
4408	4408	of the members is adjourned to a different place, if any,
4409	4409	date, or time, notice need not be given of the new place, if
4410	4410	any, date, or time if the new place, if any, date, or time is
4411	4411	announced at the meeting before adjournment. If a new record
4412	4412	date for the adjourned meeting is or must be fixed under
4413	4413	Section 10A-3A-7.07, however, notice of the adjourned meeting
4414	4414	shall be given under this section to members entitled to vote
4415	4415	at the adjourned meeting as of the record date fixed for
4416	4416	notice of the adjourned meeting.
4417	4417	§10A-3A-7.06. Waiver of notice.
4418	4418	(a) A member may waive any notice required by this
4419	4419	chapter or the certificate of incorporation or bylaws, before
4420	4420	or after the date and time stated in the notice. The waiver
4421	4421	must be in writing, be signed by the member entitled to the
4422	4422	notice, and be delivered to the membership nonprofit
4423	4423	corporation for filing by the membership nonprofit corporation
4424	4424	with the minutes or corporate records.
4425	4425	(b) A member's attendance at a meeting:
4426	4426	2157
4427	4427	2158
4428	4428	2159
4429	4429	2160
4430	4430	2161
4431	4431	2162
4432	4432	2163
4433	4433	2164
4434	4434	2165
4435	4435	2166
4436	4436	2167
4437	4437	2168
4438	4438	2169
4439	4439	2170
4440	4440	2171
4441	4441	2172
4442	4442	2173
4443	4443	2174
4444	4444	2175
4445	4445	2176
4446	4446	2177
4447	4447	2178
4448	4448	2179
4449	4449	2180
4450	4450	2181
4451	4451	2182
4452	4452	2183
4453	4453	2184 SB245 INTRODUCEDSB245 INTRODUCED
4454	4454	Page 79
4455	4455	(1) waives objection to lack of notice or defective
4456	4456	notice of the meeting, unless the member at the beginning of
4457	4457	the meeting objects to holding the meeting or transacting
4458	4458	business at the meeting; and
4459	4459	(2) waives objection to consideration of a particular
4460	4460	matter at the meeting that is not within the purpose or
4461	4461	purposes described in the meeting notice, unless the member
4462	4462	objects to considering the matter when it is presented.
4463	4463	§10A-3A-7.07. Record date.
4464	4464	(a) The certificate of incorporation or bylaws may fix
4465	4465	or provide the manner of fixing the record date or dates for
4466	4466	one or more voting groups of members to determine the members
4467	4467	entitled to notice of a members' meeting, to demand a special
4468	4468	meeting, to vote, or to take any other action. If the
4469	4469	certificate of incorporation or bylaws do not fix or provide
4470	4470	for fixing a record date, the board of directors may fix the
4471	4471	record date.
4472	4472	(b) A record date fixed under this section may not be
4473	4473	more than 70 days before the meeting or action requiring a
4474	4474	determination of members and may not be retroactive.
4475	4475	(c) A determination of members entitled to notice of or
4476	4476	to vote at a members' meeting is effective for any adjournment
4477	4477	of the meeting unless the board of directors fixes a new
4478	4478	record date or dates, which it shall do if the meeting is
4479	4479	adjourned to a date more than 120 days after the date fixed
4480	4480	for the original meeting.
4481	4481	(d) If a court orders a meeting adjourned to a date
4482	4482	more than 120 days after the date fixed for the original
4483	4483	2185
4484	4484	2186
4485	4485	2187
4486	4486	2188
4487	4487	2189
4488	4488	2190
4489	4489	2191
4490	4490	2192
4491	4491	2193
4492	4492	2194
4493	4493	2195
4494	4494	2196
4495	4495	2197
4496	4496	2198
4497	4497	2199
4498	4498	2200
4499	4499	2201
4500	4500	2202
4501	4501	2203
4502	4502	2204
4503	4503	2205
4504	4504	2206
4505	4505	2207
4506	4506	2208
4507	4507	2209
4508	4508	2210
4509	4509	2211
4510	4510	2212 SB245 INTRODUCEDSB245 INTRODUCED
4511	4511	Page 80
4512	4512	meeting, it may provide that the original record date or dates
4513	4513	continues in effect or it may fix a new record date or dates.
4514	4514	§10A-3A-7.08. Conduct of member meetings.
4515	4515	(a) At each meeting of members, an individual appointed
4516	4516	in one of the following ways must preside as chair:
4517	4517	(1) as provided in the certificate of incorporation or
4518	4518	bylaws;
4519	4519	(2) in the absence of a provision in the certificate of
4520	4520	incorporation or bylaws, by the board of directors; or
4521	4521	(3) in the absence of both a provision in the
4522	4522	certificate of incorporation or bylaws and an appointment by
4523	4523	the board of directors, by the members at the meeting.
4524	4524	(b) At each meeting of members, the order of business
4525	4525	and the rules for the conduct of the meeting must be:
4526	4526	(1) as provided in the certificate of incorporation or
4527	4527	bylaws;
4528	4528	(2) in the absence of a provision in the certificate of
4529	4529	incorporation or bylaws, established by the board of
4530	4530	directors; or
4531	4531	(3) in the absence of both a provision in the
4532	4532	certificate of incorporation or bylaws and the establishment
4533	4533	by the board of directors, established by the members at the
4534	4534	meeting.
4535	4535	(c) Any rules established for, and the conduct of, the
4536	4536	meeting must be fair to the members.
4537	4537	(d) At the meeting the chair may announce when the
4538	4538	polls close for each matter voted upon. If no announcement is
4539	4539	made, the polls close upon the final adjournment of the
4540	4540	2213
4541	4541	2214
4542	4542	2215
4543	4543	2216
4544	4544	2217
4545	4545	2218
4546	4546	2219
4547	4547	2220
4548	4548	2221
4549	4549	2222
4550	4550	2223
4551	4551	2224
4552	4552	2225
4553	4553	2226
4554	4554	2227
4555	4555	2228
4556	4556	2229
4557	4557	2230
4558	4558	2231
4559	4559	2232
4560	4560	2233
4561	4561	2234
4562	4562	2235
4563	4563	2236
4564	4564	2237
4565	4565	2238
4566	4566	2239
4567	4567	2240 SB245 INTRODUCEDSB245 INTRODUCED
4568	4568	Page 81
4569	4569	meeting. After the polls close, no ballots, proxies, or votes,
4570	4570	nor any revocations or changes to ballots, proxies, or votes
4571	4571	may be accepted.
4572	4572	§10A-3A-7.09. Remote participation in member meetings.
4573	4573	(a) Members of any class or voting group may
4574	4574	participate in any meeting of members by means of remote
4575	4575	communication to the extent the board of directors authorizes
4576	4576	that participation for that class or voting group.
4577	4577	Participation as a member by means of remote communication is
4578	4578	subject to any guidelines and procedures the board of
4579	4579	directors adopts and shall be in conformity with subsection
4580	4580	(b).
4581	4581	(b) Members participating in a members' meeting by
4582	4582	means of remote communication shall be deemed present and may
4583	4583	vote at that meeting if the membership nonprofit corporation
4584	4584	has implemented reasonable measures:
4585	4585	(1) to verify that each person participating remotely
4586	4586	as a member is a member; and
4587	4587	(2) to provide the members participating remotely a
4588	4588	reasonable opportunity to participate in the meeting and to
4589	4589	vote on matters submitted to the members, including an
4590	4590	opportunity to communicate, and to read or hear the
4591	4591	proceedings of the meeting, substantially concurrently with
4592	4592	the proceedings.
4593	4593	(c) Unless the certificate of incorporation or bylaws
4594	4594	require the meeting of members to be held at a place, the
4595	4595	board of directors may determine that any meeting of members
4596	4596	shall not be held at any place and shall instead be held
4597	4597	2241
4598	4598	2242
4599	4599	2243
4600	4600	2244
4601	4601	2245
4602	4602	2246
4603	4603	2247
4604	4604	2248
4605	4605	2249
4606	4606	2250
4607	4607	2251
4608	4608	2252
4609	4609	2253
4610	4610	2254
4611	4611	2255
4612	4612	2256
4613	4613	2257
4614	4614	2258
4615	4615	2259
4616	4616	2260
4617	4617	2261
4618	4618	2262
4619	4619	2263
4620	4620	2264
4621	4621	2265
4622	4622	2266
4623	4623	2267
4624	4624	2268 SB245 INTRODUCEDSB245 INTRODUCED
4625	4625	Page 82
4626	4626	solely by means of remote communication, but only if the
4627	4627	membership nonprofit corporation implements the measures
4628	4628	specified in subsection (b).
4629	4629	§10A-3A-7.10. Action by ballot.
4630	4630	(a) Except as otherwise provided in the certificate of
4631	4631	incorporation or bylaws, any action that may be taken at any
4632	4632	meeting of members may be taken without a meeting if the
4633	4633	membership nonprofit corporation delivers notice that includes
4634	4634	a ballot to every member entitled to vote on the matter.
4635	4635	(b) A ballot must:
4636	4636	(1) be in writing;
4637	4637	(2) set forth each proposed action;
4638	4638	(3) provide an opportunity to vote for, or withhold a
4639	4639	vote for, each candidate for election as a director, if any;
4640	4640	and
4641	4641	(4) provide an opportunity to vote for or against each
4642	4642	other proposed action.
4643	4643	(c) Approval by ballot pursuant to this section of
4644	4644	action other than election of directors is valid only when the
4645	4645	number of votes cast by ballot equals or exceeds the quorum
4646	4646	required to be present at a meeting authorizing the action,
4647	4647	and the number of approvals equals or exceeds the number of
4648	4648	votes that would be required to approve the matter at a
4649	4649	meeting at which the total number of votes cast was the same
4650	4650	as the number of votes cast by ballot.
4651	4651	(d) All solicitations for votes by ballot must:
4652	4652	(1) indicate the number of responses needed to meet the
4653	4653	quorum requirements;
4654	4654	2269
4655	4655	2270
4656	4656	2271
4657	4657	2272
4658	4658	2273
4659	4659	2274
4660	4660	2275
4661	4661	2276
4662	4662	2277
4663	4663	2278
4664	4664	2279
4665	4665	2280
4666	4666	2281
4667	4667	2282
4668	4668	2283
4669	4669	2284
4670	4670	2285
4671	4671	2286
4672	4672	2287
4673	4673	2288
4674	4674	2289
4675	4675	2290
4676	4676	2291
4677	4677	2292
4678	4678	2293
4679	4679	2294
4680	4680	2295
4681	4681	2296 SB245 INTRODUCEDSB245 INTRODUCED
4682	4682	Page 83
4683	4683	(2) state the percentage of approvals necessary to
4684	4684	approve each matter other than election of directors; and
4685	4685	(3) specify the time by which a ballot must be received
4686	4686	by the membership nonprofit corporation in order to be
4687	4687	counted.
4688	4688	(e) Except as otherwise provided in the certificate of
4689	4689	incorporation or bylaws, a ballot may not be revoked.
4690	4690	DIVISION B. VOTING.
4691	4691	§10A-3A-7.20. Members list for meeting.
4692	4692	(a) After fixing a record date for a meeting, a
4693	4693	membership nonprofit corporation shall prepare an alphabetical
4694	4694	list of the names of all its members who are entitled to
4695	4695	notice of and to vote at the members' meeting. Each list must
4696	4696	be arranged by voting group (and within each voting group by
4697	4697	class) and contain the address of, and number and class of
4698	4698	members and votes held by, each member, and if the notice or
4699	4699	other communications regarding the meeting have been or will
4700	4700	be sent by the membership nonprofit corporation to a member by
4701	4701	electronic mail or other electronic transmission, the
4702	4702	electronic mail or other electronic transmission address of
4703	4703	that member.
4704	4704	(b) The list of members entitled to notice shall be
4705	4705	available for inspection by any member no later than the tenth
4706	4706	day before each meeting of members; provided, however, if the
4707	4707	record date for determining the members entitled to vote is
4708	4708	less than 10 days before the meeting date, the list shall
4709	4709	reflect the members entitled to vote as of the tenth day
4710	4710	before the meeting date. The list shall be available (i) at
4711	4711	2297
4712	4712	2298
4713	4713	2299
4714	4714	2300
4715	4715	2301
4716	4716	2302
4717	4717	2303
4718	4718	2304
4719	4719	2305
4720	4720	2306
4721	4721	2307
4722	4722	2308
4723	4723	2309
4724	4724	2310
4725	4725	2311
4726	4726	2312
4727	4727	2313
4728	4728	2314
4729	4729	2315
4730	4730	2316
4731	4731	2317
4732	4732	2318
4733	4733	2319
4734	4734	2320
4735	4735	2321
4736	4736	2322
4737	4737	2323
4738	4738	2324 SB245 INTRODUCEDSB245 INTRODUCED
4739	4739	Page 84
4740	4740	the membership nonprofit corporation's principal office or at
4741	4741	a place identified in the meeting notice in the city where the
4742	4742	meeting will be held or (ii) on a reasonably accessible
4743	4743	electronic network, provided that the information required to
4744	4744	gain access to the list is provided with the notice of the
4745	4745	meeting. In the event that the membership nonprofit
4746	4746	corporation determines to make a list of members available on
4747	4747	an electronic network, the membership nonprofit corporation
4748	4748	may take reasonable steps to ensure that such information is
4749	4749	available only to members of the membership nonprofit
4750	4750	corporation. A member, or the member's agent or attorney, is
4751	4751	entitled on written demand to inspect and, subject to the
4752	4752	requirements of Section 10A-3A-4.02(c), to copy a list of
4753	4753	members, during regular business hours and at the member's
4754	4754	expense, during the period it is available for inspection. A
4755	4755	membership nonprofit corporation may satisfy the member's
4756	4756	right to copy a list of members by furnishing a copy in the
4757	4757	manner described in Section 10A-3A-4.03(b). A member and the
4758	4758	member's agent or attorney who inspects or is furnished a copy
4759	4759	of a list of members under this subsection (b) or who copies
4760	4760	the list under this subsection (b) may use the information on
4761	4761	that list only for purposes related to the meeting and its
4762	4762	subject matter and must keep the information on that list
4763	4763	confidential.
4764	4764	(c) If the membership nonprofit corporation refuses to
4765	4765	allow a member, or the member's agent or attorney, to inspect
4766	4766	a list of members before the meeting or any adjournment (or
4767	4767	copy a list as permitted by subsection (b)), the designated
4768	4768	2325
4769	4769	2326
4770	4770	2327
4771	4771	2328
4772	4772	2329
4773	4773	2330
4774	4774	2331
4775	4775	2332
4776	4776	2333
4777	4777	2334
4778	4778	2335
4779	4779	2336
4780	4780	2337
4781	4781	2338
4782	4782	2339
4783	4783	2340
4784	4784	2341
4785	4785	2342
4786	4786	2343
4787	4787	2344
4788	4788	2345
4789	4789	2346
4790	4790	2347
4791	4791	2348
4792	4792	2349
4793	4793	2350
4794	4794	2351
4795	4795	2352 SB245 INTRODUCEDSB245 INTRODUCED
4796	4796	Page 85
4797	4797	court, and if none, the circuit court for the county in which
4798	4798	the membership nonprofit corporation's principal office is
4799	4799	located in this state, and if none in this state, the circuit
4800	4800	court for the county in which the membership nonprofit
4801	4801	corporation's most recent registered office is located, on
4802	4802	application of the member, may summarily order the inspection
4803	4803	or copying at the membership nonprofit corporation's expense
4804	4804	and may postpone the meeting for which the list was prepared
4805	4805	until the inspection or copying is complete.
4806	4806	(d) Refusal or failure to prepare or make available a
4807	4807	list of members does not affect the validity of action taken
4808	4808	at the meeting.
4809	4809	(e) Instead of making the list of members available as
4810	4810	provided in subsection (b), a membership nonprofit corporation
4811	4811	may state in a notice of meeting that the membership nonprofit
4812	4812	corporation has elected to proceed under this subsection (e).
4813	4813	If a membership nonprofit corporation has elected to proceed
4814	4814	under this subsection (e), a member of that membership
4815	4815	nonprofit corporation must state in that member's demand for
4816	4816	inspection a proper purpose for which inspection is demanded.
4817	4817	Within three business days after receiving a demand under this
4818	4818	subsection (e), the membership nonprofit corporation must
4819	4819	deliver to the member making the demand an offer of a
4820	4820	reasonable alternative method of achieving the purpose
4821	4821	identified in the demand without providing access to or a copy
4822	4822	of the list of members. An alternative method that reasonably
4823	4823	and in a timely manner accomplishes the proper purpose set
4824	4824	forth in the demand relieves the membership nonprofit
4825	4825	2353
4826	4826	2354
4827	4827	2355
4828	4828	2356
4829	4829	2357
4830	4830	2358
4831	4831	2359
4832	4832	2360
4833	4833	2361
4834	4834	2362
4835	4835	2363
4836	4836	2364
4837	4837	2365
4838	4838	2366
4839	4839	2367
4840	4840	2368
4841	4841	2369
4842	4842	2370
4843	4843	2371
4844	4844	2372
4845	4845	2373
4846	4846	2374
4847	4847	2375
4848	4848	2376
4849	4849	2377
4850	4850	2378
4851	4851	2379
4852	4852	2380 SB245 INTRODUCEDSB245 INTRODUCED
4853	4853	Page 86
4854	4854	corporation from making the list of members available under
4855	4855	subsection (b), unless within a reasonable time after
4856	4856	acceptance of the offer the membership nonprofit corporation
4857	4857	fails to do the things it offered to do. Any rejection of the
4858	4858	membership nonprofit corporation's offer must be in writing
4859	4859	and must indicate the reasons the alternative proposed by the
4860	4860	membership nonprofit corporation does not meet the proper
4861	4861	purpose of the demand.
4862	4862	(f) The record of members of the membership nonprofit
4863	4863	corporation shall be prima facie evidence as to who are the
4864	4864	members entitled to examine the members' list or record of
4865	4865	members to vote at any meeting of members.
4866	4866	§10A-3A-7.21. Voting entitlement of members.
4867	4867	The right of the members, or any class or classes of
4868	4868	members, to vote may be limited, enlarged, or denied as
4869	4869	provided in the membership nonprofit corporation's certificate
4870	4870	of incorporation or bylaws. Unless so limited, enlarged, or
4871	4871	denied, each member, regardless of class, shall be entitled to
4872	4872	one vote on each matter submitted to a vote of members.
4873	4873	§10A-3A-7.22. Proxies.
4874	4874	(a) Except as otherwise provided in the certificate of
4875	4875	incorporation or bylaws, a member may vote in person or by
4876	4876	proxy.
4877	4877	(b) A member or the member's agent or attorney-in-fact
4878	4878	may appoint a proxy to vote or otherwise act for the member by
4879	4879	signing an appointment form, or by an electronic transmission.
4880	4880	An electronic transmission must contain or be accompanied by
4881	4881	information from which the recipient can determine the date of
4882	4882	2381
4883	4883	2382
4884	4884	2383
4885	4885	2384
4886	4886	2385
4887	4887	2386
4888	4888	2387
4889	4889	2388
4890	4890	2389
4891	4891	2390
4892	4892	2391
4893	4893	2392
4894	4894	2393
4895	4895	2394
4896	4896	2395
4897	4897	2396
4898	4898	2397
4899	4899	2398
4900	4900	2399
4901	4901	2400
4902	4902	2401
4903	4903	2402
4904	4904	2403
4905	4905	2404
4906	4906	2405
4907	4907	2406
4908	4908	2407
4909	4909	2408 SB245 INTRODUCEDSB245 INTRODUCED
4910	4910	Page 87
4911	4911	the transmission and that the transmission was authorized by
4912	4912	the sender or the sender's agent or attorney-in-fact.
4913	4913	(c) An appointment of a proxy is effective when a
4914	4914	signed appointment form or an electronic transmission of the
4915	4915	appointment is received by the inspector of election or the
4916	4916	officer or agent of the membership nonprofit corporation
4917	4917	authorized to count votes. An appointment is valid for the
4918	4918	term provided in the appointment form, and, if no term is
4919	4919	provided, is valid for 11 months unless the appointment is
4920	4920	irrevocable under subsection (d).
4921	4921	(d) An appointment of a proxy is revocable unless the
4922	4922	appointment form or electronic transmission states that it is
4923	4923	irrevocable and the appointment is coupled with an interest.
4924	4924	(e) The death or incapacity of the member appointing a
4925	4925	proxy does not affect the right of the membership nonprofit
4926	4926	corporation to accept the proxy's authority unless notice of
4927	4927	the death or incapacity is received by the secretary or other
4928	4928	officer or agent authorized to tabulate votes before the proxy
4929	4929	exercises authority under the appointment.
4930	4930	(f) An appointment made irrevocable under subsection
4931	4931	(d) is revoked when the interest with which it is coupled is
4932	4932	extinguished.
4933	4933	(g) Subject to Section 10A-3A-7.23 and to any express
4934	4934	limitation on the proxy's authority stated in the appointment
4935	4935	form or electronic transmission, a membership nonprofit
4936	4936	corporation is entitled to accept the proxy's vote or other
4937	4937	action as that of the member making the appointment.
4938	4938	(h) Nothing in this section shall be construed as
4939	4939	2409
4940	4940	2410
4941	4941	2411
4942	4942	2412
4943	4943	2413
4944	4944	2414
4945	4945	2415
4946	4946	2416
4947	4947	2417
4948	4948	2418
4949	4949	2419
4950	4950	2420
4951	4951	2421
4952	4952	2422
4953	4953	2423
4954	4954	2424
4955	4955	2425
4956	4956	2426
4957	4957	2427
4958	4958	2428
4959	4959	2429
4960	4960	2430
4961	4961	2431
4962	4962	2432
4963	4963	2433
4964	4964	2434
4965	4965	2435
4966	4966	2436 SB245 INTRODUCEDSB245 INTRODUCED
4967	4967	Page 88
4968	4968	limiting, or extending, authority granted under a durable
4969	4969	power of attorney under Section 26-1-2 or Chapter 1A of Title
4970	4970	26, and any successor statute or statutes thereto.
4971	4971	§10A-3A-7.23. Acceptance of votes and other
4972	4972	instruments.
4973	4973	(a) If the name signed on a vote, ballot, consent,
4974	4974	waiver, member demand, or proxy appointment corresponds to the
4975	4975	name of a member, the membership nonprofit corporation, if
4976	4976	acting in good faith, is entitled to accept the vote, ballot,
4977	4977	consent, waiver, member demand, or proxy appointment and give
4978	4978	it effect as the act of the member.
4979	4979	(b) If the name signed on a vote, ballot, consent,
4980	4980	waiver, member demand, or proxy appointment does not
4981	4981	correspond to the name of its member, the membership nonprofit
4982	4982	corporation, if acting in good faith, is nevertheless entitled
4983	4983	to accept the vote, ballot, consent, waiver, member demand, or
4984	4984	proxy appointment and give it effect as the act of the member
4985	4985	if:
4986	4986	(1) the member is an entity and the name signed
4987	4987	purports to be that of an officer or agent of the entity;
4988	4988	(2) the name signed purports to be that of an
4989	4989	administrator, executor, guardian, or conservator representing
4990	4990	the member and, if the membership nonprofit corporation
4991	4991	requests, evidence of fiduciary status acceptable to the
4992	4992	membership nonprofit corporation has been presented with
4993	4993	respect to the vote, ballot, consent, waiver, member demand,
4994	4994	or proxy appointment;
4995	4995	(3) the name signed purports to be that of a receiver
4996	4996	2437
4997	4997	2438
4998	4998	2439
4999	4999	2440
5000	5000	2441
5001	5001	2442
5002	5002	2443
5003	5003	2444
5004	5004	2445
5005	5005	2446
5006	5006	2447
5007	5007	2448
5008	5008	2449
5009	5009	2450
5010	5010	2451
5011	5011	2452
5012	5012	2453
5013	5013	2454
5014	5014	2455
5015	5015	2456
5016	5016	2457
5017	5017	2458
5018	5018	2459
5019	5019	2460
5020	5020	2461
5021	5021	2462
5022	5022	2463
5023	5023	2464 SB245 INTRODUCEDSB245 INTRODUCED
5024	5024	Page 89
5025	5025	or trustee in bankruptcy of the member and, if the membership
5026	5026	nonprofit corporation requests, evidence of this status
5027	5027	acceptable to the membership nonprofit corporation has been
5028	5028	presented with respect to the vote, ballot, consent, waiver,
5029	5029	member demand, or proxy appointment;
5030	5030	(4) the name signed purports to be that of a pledgee,
5031	5031	beneficial owner, or attorney-in-fact of the member and, if
5032	5032	the membership nonprofit corporation requests, evidence
5033	5033	acceptable to the membership nonprofit corporation of the
5034	5034	signatory's authority to sign for the member has been
5035	5035	presented with respect to the vote, ballot, consent, waiver,
5036	5036	member demand, or proxy appointment; or
5037	5037	(5) two or more persons are the members as co-tenants
5038	5038	or fiduciaries and the name signed purports to be the name of
5039	5039	at least one of the co-owners and the person signing appears
5040	5040	to be acting on behalf of all the co-owners.
5041	5041	(c) The membership nonprofit corporation is entitled to
5042	5042	reject a vote, ballot, consent, waiver, member demand, or
5043	5043	proxy appointment if the person authorized to accept or reject
5044	5044	that instrument, acting in good faith, has reasonable basis
5045	5045	for doubt about the validity of the signature on it or about
5046	5046	the signatory's authority to sign for the member.
5047	5047	(d) Neither the membership nonprofit corporation or any
5048	5048	person authorized by it, nor an inspector of election
5049	5049	appointed under Section 10A-3A-7.28, that accepts or rejects a
5050	5050	vote, ballot, consent, waiver, member demand, or proxy
5051	5051	appointment in good faith and in accordance with the standards
5052	5052	of this Section 10A-3A-7.23 or Section 10A-3A-7.22(b) is
5053	5053	2465
5054	5054	2466
5055	5055	2467
5056	5056	2468
5057	5057	2469
5058	5058	2470
5059	5059	2471
5060	5060	2472
5061	5061	2473
5062	5062	2474
5063	5063	2475
5064	5064	2476
5065	5065	2477
5066	5066	2478
5067	5067	2479
5068	5068	2480
5069	5069	2481
5070	5070	2482
5071	5071	2483
5072	5072	2484
5073	5073	2485
5074	5074	2486
5075	5075	2487
5076	5076	2488
5077	5077	2489
5078	5078	2490
5079	5079	2491
5080	5080	2492 SB245 INTRODUCEDSB245 INTRODUCED
5081	5081	Page 90
5082	5082	liable in damages to the member for the consequences of the
5083	5083	acceptance or rejection.
5084	5084	(e) Corporate action based on the acceptance or
5085	5085	rejection of a vote, ballot, consent, waiver, member demand,
5086	5086	or proxy appointment under this section is valid unless the
5087	5087	designated court, and if none, the circuit court for the
5088	5088	county in which the membership nonprofit corporation's
5089	5089	principal office is located in this state, and if none in this
5090	5090	state, the circuit court for the county in which the
5091	5091	membership nonprofit corporation's most recent registered
5092	5092	office is located, determines otherwise.
5093	5093	(f) If an inspector of election has been appointed
5094	5094	under Section 10A-2A-7.28, the inspector of election also has
5095	5095	the authority to request information and make determinations
5096	5096	under subsections (a), (b), and (c). Unless otherwise provided
5097	5097	in the certificate of incorporation or bylaws, any
5098	5098	determination made by the inspector of election under those
5099	5099	subsections is controlling.
5100	5100	§10A-3A-7.24. Quorum and voting requirements for voting
5101	5101	groups.
5102	5102	(a) Members entitled to vote as a separate voting group
5103	5103	may take action on a matter at a meeting only if a quorum of
5104	5104	those votes exists with respect to that matter. Except as
5105	5105	provided in the certificate of incorporation or bylaws,
5106	5106	members representing a majority of the votes entitled to be
5107	5107	cast on the matter by the voting group constitutes a quorum of
5108	5108	that voting group for action on that matter.
5109	5109	(b) Except as otherwise provided in the certificate of
5110	5110	2493
5111	5111	2494
5112	5112	2495
5113	5113	2496
5114	5114	2497
5115	5115	2498
5116	5116	2499
5117	5117	2500
5118	5118	2501
5119	5119	2502
5120	5120	2503
5121	5121	2504
5122	5122	2505
5123	5123	2506
5124	5124	2507
5125	5125	2508
5126	5126	2509
5127	5127	2510
5128	5128	2511
5129	5129	2512
5130	5130	2513
5131	5131	2514
5132	5132	2515
5133	5133	2516
5134	5134	2517
5135	5135	2518
5136	5136	2519
5137	5137	2520 SB245 INTRODUCEDSB245 INTRODUCED
5138	5138	Page 91
5139	5139	incorporation or bylaws, once a member is present or
5140	5140	represented for any purpose at a meeting, the member is deemed
5141	5141	present for quorum purposes for the remainder of the meeting
5142	5142	and for any adjournment of that meeting unless a new record
5143	5143	date is or must be fixed for that adjourned meeting.
5144	5144	(c) If a quorum exists, action on a matter (other than
5145	5145	the election of directors) by a voting group is approved if
5146	5146	the votes cast within the voting group favoring the action
5147	5147	exceed the votes cast opposing the action, unless the
5148	5148	certificate of incorporation or bylaws require a greater
5149	5149	number of affirmative votes.
5150	5150	(d) An amendment of the certificate of incorporation or
5151	5151	bylaws adding, changing, or deleting a quorum or voting
5152	5152	requirement for a voting group greater than specified in
5153	5153	subsection (a) or subsection (c) is governed by Section
5154	5154	10A-3A-7.26.
5155	5155	(e) If a meeting cannot be organized because a quorum
5156	5156	is not present, those members present may adjourn the meeting
5157	5157	to a time and place as they may determine. The certificate of
5158	5158	incorporation or bylaws may provide that when a meeting that
5159	5159	has been adjourned for lack of a quorum is reconvened, those
5160	5160	members present, although less than a quorum as fixed in this
5161	5161	section, the certificate of incorporation, or the bylaws,
5162	5162	nonetheless constitute a quorum if the original notice of the
5163	5163	meeting, or a notice of the adjourned meeting, states that
5164	5164	those members who attend a meeting that has been adjourned for
5165	5165	lack of a quorum will constitute a quorum even though they are
5166	5166	less than a quorum.
5167	5167	2521
5168	5168	2522
5169	5169	2523
5170	5170	2524
5171	5171	2525
5172	5172	2526
5173	5173	2527
5174	5174	2528
5175	5175	2529
5176	5176	2530
5177	5177	2531
5178	5178	2532
5179	5179	2533
5180	5180	2534
5181	5181	2535
5182	5182	2536
5183	5183	2537
5184	5184	2538
5185	5185	2539
5186	5186	2540
5187	5187	2541
5188	5188	2542
5189	5189	2543
5190	5190	2544
5191	5191	2545
5192	5192	2546
5193	5193	2547
5194	5194	2548 SB245 INTRODUCEDSB245 INTRODUCED
5195	5195	Page 92
5196	5196	§10A-3A-7.25. Action by single and multiple voting
5197	5197	groups.
5198	5198	(a) If this chapter, the certificate of incorporation,
5199	5199	or the bylaws provide for voting by a single voting group on a
5200	5200	matter, action on that matter is taken when voted upon by that
5201	5201	voting group as provided in Section 10A-3A-7.24.
5202	5202	(b) If this chapter, the certificate of incorporation,
5203	5203	or the bylaws provide for voting by two or more voting groups
5204	5204	on a matter, action on that matter is taken only when voted
5205	5205	upon by each of those voting groups counted separately as
5206	5206	provided in Section 10A-3A-7.24. Action may be taken by
5207	5207	different voting groups on a matter at different times.
5208	5208	§10A-3A-7.26. Modification of quorum or voting
5209	5209	requirements.
5210	5210	(a) The certificate of incorporation or bylaws may
5211	5211	provide for a higher or lower quorum or voting requirement for
5212	5212	members (or voting groups of members) than is provided for by
5213	5213	this chapter.
5214	5214	(b) An amendment to the certificate of incorporation or
5215	5215	bylaws that adds, changes, or deletes a quorum or voting
5216	5216	requirement must meet the same quorum requirement and be
5217	5217	adopted by the same vote and voting groups required to take
5218	5218	action under the quorum and voting requirements then in effect
5219	5219	or proposed to be adopted, whichever is greater.
5220	5220	§10A-3A-7.27. Voting for directors.
5221	5221	(a) Except as otherwise provided in the certificate of
5222	5222	incorporation or bylaws, directors of a membership nonprofit
5223	5223	corporation are elected by a plurality of the votes cast by
5224	5224	2549
5225	5225	2550
5226	5226	2551
5227	5227	2552
5228	5228	2553
5229	5229	2554
5230	5230	2555
5231	5231	2556
5232	5232	2557
5233	5233	2558
5234	5234	2559
5235	5235	2560
5236	5236	2561
5237	5237	2562
5238	5238	2563
5239	5239	2564
5240	5240	2565
5241	5241	2566
5242	5242	2567
5243	5243	2568
5244	5244	2569
5245	5245	2570
5246	5246	2571
5247	5247	2572
5248	5248	2573
5249	5249	2574
5250	5250	2575
5251	5251	2576 SB245 INTRODUCEDSB245 INTRODUCED
5252	5252	Page 93
5253	5253	the members entitled to vote in the election at a meeting at
5254	5254	which a quorum is present.
5255	5255	(b) Members do not have a right to cumulate their votes
5256	5256	for directors.
5257	5257	§10A-3A-7.28. Inspectors of election.
5258	5258	(a) A membership nonprofit corporation may appoint one
5259	5259	or more inspectors to act at a meeting of members and make a
5260	5260	written report thereof. The membership nonprofit corporation
5261	5261	may designate one or more persons as alternate inspectors to
5262	5262	replace any inspector who fails to act. If no inspector or
5263	5263	alternate is able to act at a meeting of members, the person
5264	5264	presiding at the meeting may appoint one or more inspectors to
5265	5265	act at the meeting. Each inspector, before entering upon the
5266	5266	discharge of the duties of inspector, shall take and sign an
5267	5267	oath faithfully to execute the duties of inspector with strict
5268	5268	impartiality and according to the best of the inspector's
5269	5269	ability. The inspectors may appoint or retain other persons to
5270	5270	assist the inspectors in the performance of the duties of
5271	5271	inspector under subsection (b), and may rely on information
5272	5272	provided by those persons and other persons, including those
5273	5273	appointed to count votes, unless the inspectors believe
5274	5274	reliance is unwarranted.
5275	5275	(b) The inspectors must:
5276	5276	(1) ascertain the number of members and their voting
5277	5277	power;
5278	5278	(2) determine the number of votes represented at the
5279	5279	meeting and the validity of proxies and ballots;
5280	5280	(3) count all votes;
5281	5281	2577
5282	5282	2578
5283	5283	2579
5284	5284	2580
5285	5285	2581
5286	5286	2582
5287	5287	2583
5288	5288	2584
5289	5289	2585
5290	5290	2586
5291	5291	2587
5292	5292	2588
5293	5293	2589
5294	5294	2590
5295	5295	2591
5296	5296	2592
5297	5297	2593
5298	5298	2594
5299	5299	2595
5300	5300	2596
5301	5301	2597
5302	5302	2598
5303	5303	2599
5304	5304	2600
5305	5305	2601
5306	5306	2602
5307	5307	2603
5308	5308	2604 SB245 INTRODUCEDSB245 INTRODUCED
5309	5309	Page 94
5310	5310	(4) determine and retain for a reasonable period a
5311	5311	record of the disposition of any challenges made to any
5312	5312	determination by the inspectors; and
5313	5313	(5) certify their determination of the number of votes
5314	5314	represented at the meeting, and their count of all votes.
5315	5315	(c) No ballot, proxies, or votes, nor any revocations
5316	5316	thereof or changes thereto, shall be accepted by the
5317	5317	inspectors after the closing of the polls unless the
5318	5318	designated court, and if none, the circuit court for the
5319	5319	county in which the membership nonprofits corporation's
5320	5320	principal office is located in this state, and if none in this
5321	5321	state, in the circuit court for the county in which the
5322	5322	membership nonprofit corporation's most recent registered
5323	5323	office is located, upon application by a member, shall
5324	5324	determine otherwise.
5325	5325	(d) In performing their duties, the inspectors may
5326	5326	examine:
5327	5327	(1) the proxy appointment forms and any other
5328	5328	information provided in accordance with Section 10A-3A-7.22;
5329	5329	(2) any envelope or related writing submitted with
5330	5330	those appointment forms;
5331	5331	(3) any ballots;
5332	5332	(4) any evidence or other information specified in
5333	5333	Section 10A-3A-7.23; and
5334	5334	(5) the relevant books and records of the membership
5335	5335	nonprofit corporation relating to its members and their
5336	5336	entitlement to vote.
5337	5337	(e) The inspectors also may consider other information
5338	5338	2605
5339	5339	2606
5340	5340	2607
5341	5341	2608
5342	5342	2609
5343	5343	2610
5344	5344	2611
5345	5345	2612
5346	5346	2613
5347	5347	2614
5348	5348	2615
5349	5349	2616
5350	5350	2617
5351	5351	2618
5352	5352	2619
5353	5353	2620
5354	5354	2621
5355	5355	2622
5356	5356	2623
5357	5357	2624
5358	5358	2625
5359	5359	2626
5360	5360	2627
5361	5361	2628
5362	5362	2629
5363	5363	2630
5364	5364	2631
5365	5365	2632 SB245 INTRODUCEDSB245 INTRODUCED
5366	5366	Page 95
5367	5367	that they believe is relevant and reliable for the purpose of
5368	5368	performing any of the duties assigned to them pursuant to
5369	5369	subsection (b).
5370	5370	(f) An inspector and any person appointed by an
5371	5371	inspector to assist with the inspector's duties may, but need
5372	5372	not, be a director, member, officer, or employee of the
5373	5373	membership nonprofit corporation. A person who is a candidate
5374	5374	for office to be filled at the meeting may not be an inspector
5375	5375	or a person so appointed.
5376	5376	DIVISION C. VOTING AGREEMENTS.
5377	5377	§10A-3A-7.30. Voting agreements.
5378	5378	(a) Except as provided in the certificate of
5379	5379	incorporation or bylaws, two or more members may provide for
5380	5380	the manner in which they will vote by signing a written
5381	5381	agreement for that purpose. A voting agreement is valid for
5382	5382	the period provided in the agreement.
5383	5383	(b) A voting agreement created under this section is
5384	5384	specifically enforceable, except that a voting agreement is
5385	5385	not enforceable to the extent that enforcement of the
5386	5386	agreement would violate the purposes of the membership
5387	5387	nonprofit corporation.
5388	5388	ARTICLE 8. DIRECTORS AND OFFICERS.
5389	5389	DIVISION A. BOARD OF DIRECTORS.
5390	5390	§10A-3A-8.01. Requirement for and functions of board of
5391	5391	directors.
5392	5392	All corporate powers shall be exercised by or under
5393	5393	authority of, and the activities and affairs of a nonprofit
5394	5394	corporation shall be managed by or under the direction and
5395	5395	2633
5396	5396	2634
5397	5397	2635
5398	5398	2636
5399	5399	2637
5400	5400	2638
5401	5401	2639
5402	5402	2640
5403	5403	2641
5404	5404	2642
5405	5405	2643
5406	5406	2644
5407	5407	2645
5408	5408	2646
5409	5409	2647
5410	5410	2648
5411	5411	2649
5412	5412	2650
5413	5413	2651
5414	5414	2652
5415	5415	2653
5416	5416	2654
5417	5417	2655
5418	5418	2656
5419	5419	2657
5420	5420	2658
5421	5421	2659
5422	5422	2660 SB245 INTRODUCEDSB245 INTRODUCED
5423	5423	Page 96
5424	5424	subject to the oversight of, the board of directors except as
5425	5425	may be otherwise provided in this chapter or the certificate
5426	5426	of incorporation. If the certificate of incorporation provides
5427	5427	that some of the corporate powers are to be exercised by or
5428	5428	under the authority of, or some of the activities and affairs
5429	5429	of the nonprofit corporation are to be managed by or under the
5430	5430	authority of, a person or group of persons other than the
5431	5431	board of directors, then the powers and duties conferred or
5432	5432	imposed upon the board of directors by this chapter with
5433	5433	respect to those corporate powers, activities and affairs
5434	5434	shall be exercised and performed by that person or group of
5435	5435	persons as provided in the certificate of incorporation.
5436	5436	§10A-3A-8.02. Qualifications of directors.
5437	5437	(a) The certificate of incorporation or bylaws may
5438	5438	prescribe qualifications for directors or for nominees for
5439	5439	directors. Qualifications must be reasonable as applied to the
5440	5440	nonprofit corporation and be lawful. Qualifications may
5441	5441	include not being or having been subject to specified
5442	5442	criminal, civil, or regulatory sanctions or not having been
5443	5443	removed as a director by judicial action or for cause.
5444	5444	(b) A director shall be a natural person of the age of
5445	5445	at least 19 years but need not be a resident of this state or
5446	5446	a member unless the certificate of incorporation or bylaws so
5447	5447	prescribe.
5448	5448	(c) A qualification for nomination, election, or
5449	5449	appointment for director prescribed before the earlier of a
5450	5450	person's nomination, election, or appointment shall apply to
5451	5451	that person at the time of the earlier of that person's
5452	5452	2661
5453	5453	2662
5454	5454	2663
5455	5455	2664
5456	5456	2665
5457	5457	2666
5458	5458	2667
5459	5459	2668
5460	5460	2669
5461	5461	2670
5462	5462	2671
5463	5463	2672
5464	5464	2673
5465	5465	2674
5466	5466	2675
5467	5467	2676
5468	5468	2677
5469	5469	2678
5470	5470	2679
5471	5471	2680
5472	5472	2681
5473	5473	2682
5474	5474	2683
5475	5475	2684
5476	5476	2685
5477	5477	2686
5478	5478	2687
5479	5479	2688 SB245 INTRODUCEDSB245 INTRODUCED
5480	5480	Page 97
5481	5481	nomination, election, or appointment and shall apply to that
5482	5482	director during that director's term. A qualification for
5483	5483	nomination, election, or appointment for director prescribed
5484	5484	after the earlier of a person's nomination, election, or
5485	5485	appointment shall not apply to that person with respect to
5486	5486	that person's nomination, election, or appointment and shall
5487	5487	not apply to that director during that director's term.
5488	5488	(d) A person who did not meet a qualification for
5489	5489	nomination, election, or appointment, but who is elected or
5490	5490	appointed as a director, may serve as a director until removed
5491	5491	in accordance with Section 10A-3A-8.08 or 10A-3A-8.09.
5492	5492	§10A-3A-8.03. Number of directors.
5493	5493	(a) A board of directors shall consist of one or more
5494	5494	individuals, with the number specified in or fixed in
5495	5495	accordance with the certificate of incorporation or bylaws.
5496	5496	(b) The number of directors may be increased or
5497	5497	decreased from time to time by amendment to, or in the manner
5498	5498	provided in, the certificate of incorporation or bylaws.
5499	5499	§10A-3A-8.04. Selection of directors.
5500	5500	(a) Except as set forth in Section 10A-3A-2.04, the
5501	5501	directors of a membership nonprofit corporation are elected,
5502	5502	appointed, or designated as provided in the certificate of
5503	5503	incorporation or bylaws. If no method of election,
5504	5504	appointment, or designation is set forth in the certificate of
5505	5505	incorporation or bylaws, the directors of a membership
5506	5506	nonprofit corporation are elected by the members entitled to
5507	5507	vote at the time at the first annual meeting of members, and
5508	5508	at each annual meeting thereafter.
5509	5509	2689
5510	5510	2690
5511	5511	2691
5512	5512	2692
5513	5513	2693
5514	5514	2694
5515	5515	2695
5516	5516	2696
5517	5517	2697
5518	5518	2698
5519	5519	2699
5520	5520	2700
5521	5521	2701
5522	5522	2702
5523	5523	2703
5524	5524	2704
5525	5525	2705
5526	5526	2706
5527	5527	2707
5528	5528	2708
5529	5529	2709
5530	5530	2710
5531	5531	2711
5532	5532	2712
5533	5533	2713
5534	5534	2714
5535	5535	2715
5536	5536	2716 SB245 INTRODUCEDSB245 INTRODUCED
5537	5537	Page 98
5538	5538	(b) Except as set forth in Section 10A-3A-2.04, the
5539	5539	directors of a nonmembership nonprofit corporation are
5540	5540	elected, appointed, or designated as provided in the
5541	5541	certificate of incorporation or bylaws. If no method of
5542	5542	election, appointment, or designation is set forth in the
5543	5543	certificate of incorporation or bylaws, the directors are
5544	5544	elected by the board.
5545	5545	(c) If the certificate of incorporation or bylaws
5546	5546	divide, or authorize dividing, the members into classes, the
5547	5547	certificate of incorporation or bylaws may also authorize the
5548	5548	election of all or a specified number of directors by one or
5549	5549	more authorized classes of members. A class or multiple
5550	5550	classes of members entitled to elect one or more directors is
5551	5551	a separate voting group for purposes of the election of
5552	5552	directors.
5553	5553	§10A-3A-8.05. Terms of directors generally.
5554	5554	(a) The certificate of incorporation or bylaws may
5555	5555	specify the terms of directors. If a term is not specified in
5556	5556	the certificate of incorporation or bylaws, the term of a
5557	5557	director is one year.
5558	5558	(b) A decrease in the number of directors or term of
5559	5559	office does not shorten an incumbent director's term.
5560	5560	(c) Except as provided in the certificate of
5561	5561	incorporation or bylaws, the term of a director elected to
5562	5562	fill a vacancy expires at the end of the unexpired term that
5563	5563	the director is filling.
5564	5564	(d) Despite the expiration of a director's term, the
5565	5565	director continues to serve until the director's successor is
5566	5566	2717
5567	5567	2718
5568	5568	2719
5569	5569	2720
5570	5570	2721
5571	5571	2722
5572	5572	2723
5573	5573	2724
5574	5574	2725
5575	5575	2726
5576	5576	2727
5577	5577	2728
5578	5578	2729
5579	5579	2730
5580	5580	2731
5581	5581	2732
5582	5582	2733
5583	5583	2734
5584	5584	2735
5585	5585	2736
5586	5586	2737
5587	5587	2738
5588	5588	2739
5589	5589	2740
5590	5590	2741
5591	5591	2742
5592	5592	2743
5593	5593	2744 SB245 INTRODUCEDSB245 INTRODUCED
5594	5594	Page 99
5595	5595	elected, appointed, or designated and until the director's
5596	5596	successor takes office unless otherwise provided in the
5597	5597	certificate of incorporation or bylaws or there is a decrease
5598	5598	in the number of directors.
5599	5599	§10A-3A-8.06. Staggered terms for directors.
5600	5600	The certificate of incorporation or bylaws may provide
5601	5601	for staggering the terms of directors by dividing the total
5602	5602	number of directors into groups of one or more directors. The
5603	5603	terms of office and number of directors in each group do not
5604	5604	need to be uniform.
5605	5605	§10A-3A-8.07. Resignation of directors.
5606	5606	(a) A director may resign at any time by delivering a
5607	5607	written notice of resignation to the board of directors or its
5608	5608	chair, to the secretary, or to the nonprofit corporation.
5609	5609	(b) A resignation is effective as provided in Section
5610	5610	10A-3A-1.03(i) unless the resignation provides for a delayed
5611	5611	effectiveness, including effectiveness determined upon a
5612	5612	future event or events.
5613	5613	§10A-3A-8.08. Removal of directors by members or other
5614	5614	persons.
5615	5615	(a) Except as provided in the certificate of
5616	5616	incorporation or bylaws, a director of a membership nonprofit
5617	5617	corporation may be removed with or without cause by the
5618	5618	members who are eligible under Section 10A-3A-8.10 to vote to
5619	5619	fill the vacancy created by the removal of that director.
5620	5620	(b) The notice of a meeting of members of a membership
5621	5621	nonprofit corporation at which removal of a director is to be
5622	5622	considered must state that the purpose, or one of the
5623	5623	2745
5624	5624	2746
5625	5625	2747
5626	5626	2748
5627	5627	2749
5628	5628	2750
5629	5629	2751
5630	5630	2752
5631	5631	2753
5632	5632	2754
5633	5633	2755
5634	5634	2756
5635	5635	2757
5636	5636	2758
5637	5637	2759
5638	5638	2760
5639	5639	2761
5640	5640	2762
5641	5641	2763
5642	5642	2764
5643	5643	2765
5644	5644	2766
5645	5645	2767
5646	5646	2768
5647	5647	2769
5648	5648	2770
5649	5649	2771
5650	5650	2772 SB245 INTRODUCEDSB245 INTRODUCED
5651	5651	Page 100
5652	5652	purposes, of the meeting is removal of the director.
5653	5653	(c) Except as provided in the certificate of
5654	5654	incorporation or bylaws, the board of directors of a
5655	5655	membership nonprofit corporation may not remove a director.
5656	5656	(d) Except as provided in the certificate of
5657	5657	incorporation or bylaws, the board of directors may remove a
5658	5658	director of a nonmembership nonprofit corporation with or
5659	5659	without cause.
5660	5660	(e) In addition to the removal provisions of
5661	5661	subsections (a) and (d), the board of directors of a
5662	5662	membership nonprofit corporation or nonmembership nonprofit
5663	5663	corporation may remove a director who:
5664	5664	(1) did not satisfy the qualifications for directors as
5665	5665	set forth in the certificate of incorporation or bylaws at the
5666	5666	time that director was nominated, elected, appointed, or
5667	5667	designated to that director's current term, if the decision
5668	5668	that the director failed to satisfy a qualification is made by
5669	5669	the vote of a majority of the directors who meet all of the
5670	5670	required qualifications; or
5671	5671	(2) no longer satisfies the qualifications for
5672	5672	directors as set forth in the certificate of incorporation or
5673	5673	bylaws at the time that director was nominated, elected,
5674	5674	appointed, or designated to that director's current term, if
5675	5675	the decision that the director failed to satisfy a
5676	5676	qualification is made by the vote of a majority of the
5677	5677	directors who meet all of the required qualifications.
5678	5678	§10A-3A-8.09. Removal of directors by judicial
5679	5679	proceeding.
5680	5680	2773
5681	5681	2774
5682	5682	2775
5683	5683	2776
5684	5684	2777
5685	5685	2778
5686	5686	2779
5687	5687	2780
5688	5688	2781
5689	5689	2782
5690	5690	2783
5691	5691	2784
5692	5692	2785
5693	5693	2786
5694	5694	2787
5695	5695	2788
5696	5696	2789
5697	5697	2790
5698	5698	2791
5699	5699	2792
5700	5700	2793
5701	5701	2794
5702	5702	2795
5703	5703	2796
5704	5704	2797
5705	5705	2798
5706	5706	2799
5707	5707	2800 SB245 INTRODUCEDSB245 INTRODUCED
5708	5708	Page 101
5709	5709	The designated court, and if none, the circuit court
5710	5710	for the county in which the nonprofit corporation's principal
5711	5711	office is located in this state, and if none in this state,
5712	5712	the circuit court for the county in which the nonprofit
5713	5713	corporation's most recent registered office is located may
5714	5714	remove a director from office or may order other relief,
5715	5715	including barring the director from reelection, redesignation,
5716	5716	or reappointment for a period prescribed by the court, in a
5717	5717	proceeding commenced by or in the right of the nonprofit
5718	5718	corporation if the court finds that: (i) the director engaged
5719	5719	in fraudulent conduct with respect to the nonprofit
5720	5720	corporation or its members, grossly abused the position of
5721	5721	director, or intentionally inflicted harm on the nonprofit
5722	5722	corporation; and (ii) considering the director's course of
5723	5723	conduct and the inadequacy of other available remedies,
5724	5724	removal or such other relief would be in the best interest of
5725	5725	the nonprofit corporation.
5726	5726	§10A-3A-8.10. Vacancy on board.
5727	5727	(a) Except as otherwise provided in subsection (b), the
5728	5728	certificate of incorporation, or the bylaws, if a vacancy
5729	5729	occurs on the board of directors, including a vacancy
5730	5730	resulting from an increase in the number of directors:
5731	5731	(1) the members may fill the vacancy;
5732	5732	(2) the board of directors may fill the vacancy; or
5733	5733	(3) if the directors remaining in office are less than
5734	5734	a quorum, they may fill the vacancy by the affirmative vote of
5735	5735	a majority of all the directors remaining in office.
5736	5736	(b) Unless the certificate of incorporation or bylaws
5737	5737	2801
5738	5738	2802
5739	5739	2803
5740	5740	2804
5741	5741	2805
5742	5742	2806
5743	5743	2807
5744	5744	2808
5745	5745	2809
5746	5746	2810
5747	5747	2811
5748	5748	2812
5749	5749	2813
5750	5750	2814
5751	5751	2815
5752	5752	2816
5753	5753	2817
5754	5754	2818
5755	5755	2819
5756	5756	2820
5757	5757	2821
5758	5758	2822
5759	5759	2823
5760	5760	2824
5761	5761	2825
5762	5762	2826
5763	5763	2827
5764	5764	2828 SB245 INTRODUCEDSB245 INTRODUCED
5765	5765	Page 102
5766	5766	provides otherwise, if the vacant office was held by a
5767	5767	director who is:
5768	5768	(1) elected by a voting group of members, only the
5769	5769	members of that voting group are entitled to vote to fill the
5770	5770	vacancy if it is filled by the members, and only the remaining
5771	5771	directors elected by that voting group, even if less than a
5772	5772	quorum, are entitled to fill the vacancy if it is filled by
5773	5773	the directors;
5774	5774	(2) appointed by a person or group of persons specified
5775	5775	in the certificate of incorporation, may be filled only by
5776	5776	that person or that group of persons; or
5777	5777	(3) designated in the certificate of incorporation or
5778	5778	bylaws, may only be filled as specified in the certificate of
5779	5779	incorporation or bylaws.
5780	5780	(c) A vacancy that will occur at a specific later time
5781	5781	(by reason of a resignation effective at a later time under
5782	5782	Section 10A-3A-8.07(b) or otherwise) may be filled before the
5783	5783	vacancy occurs but the new director may not take office until
5784	5784	the vacancy occurs.
5785	5785	§10A-3A-8.11. Compensation of directors.
5786	5786	Unless the certificate of incorporation or bylaws
5787	5787	provide otherwise, the board of directors may fix the
5788	5788	compensation of directors.
5789	5789	DIVISION B. MEETINGS AND ACTIONS OF THE BOARD.
5790	5790	§10A-3A-8.20. Meetings.
5791	5791	(a) The board of directors may hold regular or special
5792	5792	meetings in or out of the state.
5793	5793	(b) Unless restricted by the certificate of
5794	5794	2829
5795	5795	2830
5796	5796	2831
5797	5797	2832
5798	5798	2833
5799	5799	2834
5800	5800	2835
5801	5801	2836
5802	5802	2837
5803	5803	2838
5804	5804	2839
5805	5805	2840
5806	5806	2841
5807	5807	2842
5808	5808	2843
5809	5809	2844
5810	5810	2845
5811	5811	2846
5812	5812	2847
5813	5813	2848
5814	5814	2849
5815	5815	2850
5816	5816	2851
5817	5817	2852
5818	5818	2853
5819	5819	2854
5820	5820	2855
5821	5821	2856 SB245 INTRODUCEDSB245 INTRODUCED
5822	5822	Page 103
5823	5823	incorporation or bylaws, any or all directors may participate
5824	5824	in a meeting of the board through the use of any means of
5825	5825	communication by which all directors participating may
5826	5826	simultaneously hear each other during the meeting. A director
5827	5827	participating in a meeting by this means is deemed to be
5828	5828	present in person at the meeting.
5829	5829	§10A-3A-8.21. Action without meeting.
5830	5830	(a) Except to the extent that the certificate of
5831	5831	incorporation or bylaws require that action by the board of
5832	5832	directors be taken at a meeting, action required or permitted
5833	5833	by this chapter to be taken by the board of directors may be
5834	5834	taken without a meeting if each director signs a consent in a
5835	5835	record describing the action to be taken and delivers it to
5836	5836	the nonprofit corporation.
5837	5837	(b) Action taken under this section is the act of the
5838	5838	board of directors when one or more consents signed by all the
5839	5839	directors are delivered to the nonprofit corporation. Any
5840	5840	director executing a consent may provide, whether through
5841	5841	instruction to an agent or otherwise, that the consent will be
5842	5842	effective at a future time, including a time determined upon
5843	5843	the happening of an event, occurring not later than 60 days
5844	5844	after the instruction is given or the provision is made, if
5845	5845	evidence of the instruction or provision is provided to the
5846	5846	nonprofit corporation. A director's consent may be withdrawn
5847	5847	by a revocation signed by the director and delivered to the
5848	5848	nonprofit corporation before delivery to the nonprofit
5849	5849	corporation of unrevoked consents signed by all the directors.
5850	5850	(c) A consent signed under this section has the effect
5851	5851	2857
5852	5852	2858
5853	5853	2859
5854	5854	2860
5855	5855	2861
5856	5856	2862
5857	5857	2863
5858	5858	2864
5859	5859	2865
5860	5860	2866
5861	5861	2867
5862	5862	2868
5863	5863	2869
5864	5864	2870
5865	5865	2871
5866	5866	2872
5867	5867	2873
5868	5868	2874
5869	5869	2875
5870	5870	2876
5871	5871	2877
5872	5872	2878
5873	5873	2879
5874	5874	2880
5875	5875	2881
5876	5876	2882
5877	5877	2883
5878	5878	2884 SB245 INTRODUCEDSB245 INTRODUCED
5879	5879	Page 104
5880	5880	of action taken at a meeting of the board of directors and may
5881	5881	be described as such in any document.
5882	5882	§10A-3A-8.22. Notice of meeting.
5883	5883	(a) Unless the certificate of incorporation or bylaws
5884	5884	provide otherwise, regular meetings of the board of directors
5885	5885	may be held without notice of the place, if any, date, time,
5886	5886	or purpose of the meeting.
5887	5887	(b) Unless the certificate of incorporation or bylaws
5888	5888	provide for a longer or shorter period, special meetings of
5889	5889	the board of directors must be preceded by at least two days'
5890	5890	notice of the place, if any, date, time, of the meeting. The
5891	5891	notice need not describe the purpose of the special meeting
5892	5892	unless required by the certificate of incorporation or bylaws.
5893	5893	§10A-3A-8.23. Waiver of notice.
5894	5894	(a) A director may waive any notice required by this
5895	5895	chapter, the certificate of incorporation, or the bylaws
5896	5896	before or after the date and time stated in the notice. Except
5897	5897	as provided by subsection (b), the waiver must be in writing,
5898	5898	signed by the director entitled to the notice, and delivered
5899	5899	to the nonprofit corporation for filing by the nonprofit
5900	5900	corporation with the minutes or corporate records.
5901	5901	(b) A director's attendance at or participation in a
5902	5902	meeting waives any required notice to the director of the
5903	5903	meeting, unless the director at the beginning of the meeting
5904	5904	(or promptly upon arrival) objects to holding the meeting or
5905	5905	transacting business at the meeting and does not, after
5906	5906	objecting, vote for or assent to action taken at the meeting.
5907	5907	§10A-3A-8.24. Quorum and voting.
5908	5908	2885
5909	5909	2886
5910	5910	2887
5911	5911	2888
5912	5912	2889
5913	5913	2890
5914	5914	2891
5915	5915	2892
5916	5916	2893
5917	5917	2894
5918	5918	2895
5919	5919	2896
5920	5920	2897
5921	5921	2898
5922	5922	2899
5923	5923	2900
5924	5924	2901
5925	5925	2902
5926	5926	2903
5927	5927	2904
5928	5928	2905
5929	5929	2906
5930	5930	2907
5931	5931	2908
5932	5932	2909
5933	5933	2910
5934	5934	2911
5935	5935	2912 SB245 INTRODUCEDSB245 INTRODUCED
5936	5936	Page 105
5937	5937	(a) Unless the certificate of incorporation or bylaws
5938	5938	provide for a greater or lesser number or unless otherwise
5939	5939	expressly provided in this chapter, a quorum of a board of
5940	5940	directors consists of a majority of the number of directors
5941	5941	specified in or fixed in accordance with the certificate of
5942	5942	incorporation or bylaws.
5943	5943	(b) The quorum of the board of directors specified in
5944	5944	or fixed in accordance with the certificate of incorporation
5945	5945	or bylaws may not consist of less than one-third of the
5946	5946	specified or fixed number of directors.
5947	5947	(c) If a quorum is present when a vote is taken, the
5948	5948	affirmative vote of a majority of directors present is the act
5949	5949	of the board of directors unless the certificate of
5950	5950	incorporation or bylaws require the vote of a greater number
5951	5951	of directors or unless otherwise expressly provided in this
5952	5952	chapter.
5953	5953	(d) A director who is present at a meeting of the board
5954	5954	of directors or a committee when corporate action is taken is
5955	5955	deemed to have assented to the action taken unless: (i) the
5956	5956	director objects at the beginning of the meeting (or promptly
5957	5957	upon arrival) to holding it or transacting business at the
5958	5958	meeting; (ii) the dissent or abstention from the action taken
5959	5959	is entered in the minutes of the meeting; or (iii) the
5960	5960	director delivers written notice of the director's dissent or
5961	5961	abstention to the presiding officer of the meeting before its
5962	5962	adjournment or to the nonprofit corporation immediately after
5963	5963	adjournment of the meeting. The right of dissent or abstention
5964	5964	is not available to a director who votes in favor of the
5965	5965	2913
5966	5966	2914
5967	5967	2915
5968	5968	2916
5969	5969	2917
5970	5970	2918
5971	5971	2919
5972	5972	2920
5973	5973	2921
5974	5974	2922
5975	5975	2923
5976	5976	2924
5977	5977	2925
5978	5978	2926
5979	5979	2927
5980	5980	2928
5981	5981	2929
5982	5982	2930
5983	5983	2931
5984	5984	2932
5985	5985	2933
5986	5986	2934
5987	5987	2935
5988	5988	2936
5989	5989	2937
5990	5990	2938
5991	5991	2939
5992	5992	2940 SB245 INTRODUCEDSB245 INTRODUCED
5993	5993	Page 106
5994	5994	action taken.
5995	5995	(e) A director, in that person's capacity as a
5996	5996	director, may not appoint an agent or proxy to vote, consent,
5997	5997	approve, attend, act, or otherwise carry out the duties of
5998	5998	that director for any purpose.
5999	5999	§10A-3A-8.25. Board and advisory committees.
6000	6000	(a) A committee of the board of directors composed
6001	6001	exclusively of one or more directors may be established to
6002	6002	perform functions of the board:
6003	6003	(1) by the certificate of incorporation or bylaws; or
6004	6004	(2) except as restricted by the certificate of
6005	6005	incorporation or bylaws, by the board of directors.
6006	6006	(b) Unless this chapter, the certificate of
6007	6007	incorporation, or the bylaws provide otherwise, the
6008	6008	establishment of a committee and appointment of directors to
6009	6009	it must be approved by the greater of:
6010	6010	(1) a majority of all the directors in office when the
6011	6011	action is taken; or
6012	6012	(2) the number of directors required by the certificate
6013	6013	of incorporation or bylaws to take action under Section
6014	6014	10A-3A-8.24.
6015	6015	(c) Sections 10A-3A-8.20 through 10A-3A-8.24 apply to
6016	6016	board committees and their members.
6017	6017	(d) A board committee may exercise the powers of the
6018	6018	board of directors under Section 10A-3A-8.01, to the extent
6019	6019	specified by the board of directors or in the certificate of
6020	6020	incorporation or bylaws, except that a board committee may
6021	6021	not:
6022	6022	2941
6023	6023	2942
6024	6024	2943
6025	6025	2944
6026	6026	2945
6027	6027	2946
6028	6028	2947
6029	6029	2948
6030	6030	2949
6031	6031	2950
6032	6032	2951
6033	6033	2952
6034	6034	2953
6035	6035	2954
6036	6036	2955
6037	6037	2956
6038	6038	2957
6039	6039	2958
6040	6040	2959
6041	6041	2960
6042	6042	2961
6043	6043	2962
6044	6044	2963
6045	6045	2964
6046	6046	2965
6047	6047	2966
6048	6048	2967
6049	6049	2968 SB245 INTRODUCEDSB245 INTRODUCED
6050	6050	Page 107
6051	6051	(1) in the case of a membership nonprofit corporation,
6052	6052	approve or propose to members action that this chapter
6053	6053	requires be approved by members;
6054	6054	(2) remove a director from office;
6055	6055	(3) fill a vacancy on the board of directors; or,
6056	6056	subject to subsection (e), on any committee of the board; or
6057	6057	(4) adopt, amend, or repeal a provision of the
6058	6058	certificate of incorporation or bylaws.
6059	6059	(e) The board of directors may appoint one or more
6060	6060	directors as alternate members of any board committee to
6061	6061	replace any absent or disqualified member during the member's
6062	6062	absence or disqualification. If the certificate of
6063	6063	incorporation, bylaws, or the action creating a board
6064	6064	committee so provides, the member or members present at any
6065	6065	board committee meeting and not disqualified from voting may,
6066	6066	by unanimous action, appoint another director to act in place
6067	6067	of an absent or disqualified member during that member's
6068	6068	absence or disqualification.
6069	6069	(f) The certificate of incorporation, bylaws, or board
6070	6070	of directors may create or authorize the creation of one or
6071	6071	more advisory committees whose members need not be directors.
6072	6072	An advisory committee:
6073	6073	(1) is not a committee of the board; and
6074	6074	(2) may not exercise any of the powers of the board.
6075	6075	DIVISION C. DIRECTORS.
6076	6076	§10A-3A-8.30. Standards of conduct for directors.
6077	6077	Division C of Article 3 of Chapter 1 shall not apply to
6078	6078	this chapter. Instead:
6079	6079	2969
6080	6080	2970
6081	6081	2971
6082	6082	2972
6083	6083	2973
6084	6084	2974
6085	6085	2975
6086	6086	2976
6087	6087	2977
6088	6088	2978
6089	6089	2979
6090	6090	2980
6091	6091	2981
6092	6092	2982
6093	6093	2983
6094	6094	2984
6095	6095	2985
6096	6096	2986
6097	6097	2987
6098	6098	2988
6099	6099	2989
6100	6100	2990
6101	6101	2991
6102	6102	2992
6103	6103	2993
6104	6104	2994
6105	6105	2995
6106	6106	2996 SB245 INTRODUCEDSB245 INTRODUCED
6107	6107	Page 108
6108	6108	(a) Each member of the board of directors, when
6109	6109	discharging the duties of a director, shall act: (i) in good
6110	6110	faith, and (ii) in a manner the director reasonably believes
6111	6111	to be in the best interests of the nonprofit corporation.
6112	6112	(b) The members of the board of directors or a board
6113	6113	committee, when becoming informed in connection with their
6114	6114	decision-making function or devoting attention to their
6115	6115	oversight function, shall discharge their duties with the care
6116	6116	that a person in a like position would reasonably believe
6117	6117	appropriate under similar circumstances.
6118	6118	(c) In discharging board of directors or board
6119	6119	committee duties, a director shall disclose, or cause to be
6120	6120	disclosed, to the other board of directors or board committee
6121	6121	members information not already known by them but known by the
6122	6122	director to be material to the discharge of their
6123	6123	decision-making or oversight functions, except that disclosure
6124	6124	is not required to the extent that the director reasonably
6125	6125	believes that doing so would violate a duty imposed under law,
6126	6126	a legally enforceable obligation of confidentiality, or a
6127	6127	professional ethics rule.
6128	6128	(d) In discharging board of directors or board
6129	6129	committee duties, a director who does not have knowledge that
6130	6130	makes reliance unwarranted is entitled to rely on the
6131	6131	performance by any of the persons specified in subsection
6132	6132	(f)(1) or subsection (f)(3) to whom the board of directors may
6133	6133	have delegated, formally or informally by course of conduct,
6134	6134	the authority or duty to perform one or more of the board of
6135	6135	directors' functions that are delegable under applicable law.
6136	6136	2997
6137	6137	2998
6138	6138	2999
6139	6139	3000
6140	6140	3001
6141	6141	3002
6142	6142	3003
6143	6143	3004
6144	6144	3005
6145	6145	3006
6146	6146	3007
6147	6147	3008
6148	6148	3009
6149	6149	3010
6150	6150	3011
6151	6151	3012
6152	6152	3013
6153	6153	3014
6154	6154	3015
6155	6155	3016
6156	6156	3017
6157	6157	3018
6158	6158	3019
6159	6159	3020
6160	6160	3021
6161	6161	3022
6162	6162	3023
6163	6163	3024 SB245 INTRODUCEDSB245 INTRODUCED
6164	6164	Page 109
6165	6165	(e) In discharging board of directors or board
6166	6166	committee duties, a director who does not have knowledge that
6167	6167	makes reliance unwarranted is entitled to rely on information,
6168	6168	opinions, reports, or statements, including financial
6169	6169	statements and other financial data, prepared or presented by
6170	6170	any of the persons specified in subsection (f).
6171	6171	(f) A director is entitled to rely, in accordance with
6172	6172	subsection (d) or (e), on:
6173	6173	(1) one or more officers, employees, or volunteers of
6174	6174	the nonprofit corporation or one or more persons associated
6175	6175	with the nonprofit corporation, whom the director reasonably
6176	6176	believes to be reliable and competent in the functions
6177	6177	performed or the information, opinions, reports, or statements
6178	6178	provided;
6179	6179	(2) legal counsel, public accountants, or other persons
6180	6180	retained by the nonprofit corporation as to matters involving
6181	6181	skills or expertise the director reasonably believes are
6182	6182	matters (i) within the particular person's professional or
6183	6183	expert competence, or (ii) as to which the particular person
6184	6184	merits confidence; or
6185	6185	(3) a board committee of which the director is not a
6186	6186	member if the director reasonably believes the committee
6187	6187	merits confidence.
6188	6188	(g) Except as set forth in subsections (a) and (b), a
6189	6189	director, when discharging the duties of a director, has no
6190	6190	duty to any person other than the nonprofit corporation.
6191	6191	§10A-3A-8.31. Standards of liability for directors.
6192	6192	Division C of Article 3 of Chapter 1 shall not apply to
6193	6193	3025
6194	6194	3026
6195	6195	3027
6196	6196	3028
6197	6197	3029
6198	6198	3030
6199	6199	3031
6200	6200	3032
6201	6201	3033
6202	6202	3034
6203	6203	3035
6204	6204	3036
6205	6205	3037
6206	6206	3038
6207	6207	3039
6208	6208	3040
6209	6209	3041
6210	6210	3042
6211	6211	3043
6212	6212	3044
6213	6213	3045
6214	6214	3046
6215	6215	3047
6216	6216	3048
6217	6217	3049
6218	6218	3050
6219	6219	3051
6220	6220	3052 SB245 INTRODUCEDSB245 INTRODUCED
6221	6221	Page 110
6222	6222	this chapter. Instead:
6223	6223	(a) A director shall not be liable to the nonprofit
6224	6224	corporation or its members for any decision to take or not to
6225	6225	take action, or any failure to take any action, as a director,
6226	6226	unless the party asserting liability in a proceeding
6227	6227	establishes that:
6228	6228	(1) no defense interposed by the director based on: (i)
6229	6229	any provision in the certificate of incorporation authorized
6230	6230	by Section 10A-3A-2.02(b)(4) or by Section 10A-3A-2.02(b)(6),
6231	6231	or (ii) the protection afforded by Section 10A-3A-8.60,
6232	6232	precludes liability; and
6233	6233	(2) the challenged conduct consisted or was the result
6234	6234	of:
6235	6235	(i) action not in good faith; or
6236	6236	(ii) a decision:
6237	6237	(A) which the director did not reasonably believe to be
6238	6238	in the best interests of the nonprofit corporation, or
6239	6239	(B) as to which the director was not informed to an
6240	6240	extent the director reasonably believed appropriate in the
6241	6241	circumstances; or
6242	6242	(iii) a lack of objectivity due to the director's
6243	6243	familial, financial or business relationship with, or a lack
6244	6244	of independence due to the director's domination or control
6245	6245	by, another person having a material interest in the
6246	6246	challenged conduct:
6247	6247	(A) which relationship or which domination or control
6248	6248	could reasonably be expected to have affected the director's
6249	6249	judgment respecting the challenged conduct in a manner adverse
6250	6250	3053
6251	6251	3054
6252	6252	3055
6253	6253	3056
6254	6254	3057
6255	6255	3058
6256	6256	3059
6257	6257	3060
6258	6258	3061
6259	6259	3062
6260	6260	3063
6261	6261	3064
6262	6262	3065
6263	6263	3066
6264	6264	3067
6265	6265	3068
6266	6266	3069
6267	6267	3070
6268	6268	3071
6269	6269	3072
6270	6270	3073
6271	6271	3074
6272	6272	3075
6273	6273	3076
6274	6274	3077
6275	6275	3078
6276	6276	3079
6277	6277	3080 SB245 INTRODUCEDSB245 INTRODUCED
6278	6278	Page 111
6279	6279	to the nonprofit corporation, and
6280	6280	(B) after a reasonable expectation to that effect has
6281	6281	been established, the director shall not have established that
6282	6282	the challenged conduct was reasonably believed by the director
6283	6283	to be in the best interests of the nonprofit corporation; or
6284	6284	(iv) a sustained failure of the director to devote
6285	6285	attention to ongoing oversight of the activities and affairs
6286	6286	of the nonprofit corporation, or a failure to devote timely
6287	6287	attention, by making (or causing to be made) appropriate
6288	6288	inquiry, when particular facts and circumstances of
6289	6289	significant concern materialize that would alert a reasonably
6290	6290	attentive director to the need for that inquiry; or
6291	6291	(v) receipt of a financial benefit to which the
6292	6292	director was not entitled or any other breach of the
6293	6293	director's duties to deal fairly with the nonprofit
6294	6294	corporation and its members that is actionable under
6295	6295	applicable law.
6296	6296	(b) The party seeking to hold the director liable:
6297	6297	(1) for money damages, shall also have the burden of
6298	6298	establishing that:
6299	6299	(i) harm to the nonprofit corporation or its members
6300	6300	has been suffered, and
6301	6301	(ii) the harm suffered was proximately caused by the
6302	6302	director's challenged conduct; or
6303	6303	(2) for other money payment under a legal remedy, such
6304	6304	as compensation for the unauthorized use of corporate assets,
6305	6305	shall also have whatever persuasion burden may be called for
6306	6306	to establish that the payment sought is appropriate in the
6307	6307	3081
6308	6308	3082
6309	6309	3083
6310	6310	3084
6311	6311	3085
6312	6312	3086
6313	6313	3087
6314	6314	3088
6315	6315	3089
6316	6316	3090
6317	6317	3091
6318	6318	3092
6319	6319	3093
6320	6320	3094
6321	6321	3095
6322	6322	3096
6323	6323	3097
6324	6324	3098
6325	6325	3099
6326	6326	3100
6327	6327	3101
6328	6328	3102
6329	6329	3103
6330	6330	3104
6331	6331	3105
6332	6332	3106
6333	6333	3107
6334	6334	3108 SB245 INTRODUCEDSB245 INTRODUCED
6335	6335	Page 112
6336	6336	circumstances; or
6337	6337	(3) for other money payment under an equitable remedy,
6338	6338	such as profit recovery by or disgorgement to the nonprofit
6339	6339	corporation, shall also have whatever persuasion burden may be
6340	6340	called for to establish that the equitable remedy sought is
6341	6341	appropriate in the circumstances.
6342	6342	(c) Nothing contained in this section shall:
6343	6343	(1) in any instance where fairness is at issue alter
6344	6344	the burden of proving the fact or lack of fairness otherwise
6345	6345	applicable;
6346	6346	(2) alter the fact or lack of liability of a director
6347	6347	under another section of this chapter, such as the provisions
6348	6348	governing the consequences of an unlawful distribution under
6349	6349	Section 10A-3A-8.32 or a transactional interest under Section
6350	6350	10A-3A-8.60;
6351	6351	(3) affect any rights to which a director may be
6352	6352	entitled under another statute of this state or the United
6353	6353	States; or
6354	6354	(4) affect any rights to which the nonprofit
6355	6355	corporation or a member may be entitled under another statute
6356	6356	of this state or the United States.
6357	6357	§10A-3A-8.32. Directors' liability for unlawful
6358	6358	distributions.
6359	6359	(a) A director who votes for or assents to a
6360	6360	distribution in excess of what may be authorized and made
6361	6361	pursuant to Section 10A-3A-6.40 or Section 10A-3A-11.07 is
6362	6362	personally liable to the nonprofit corporation for the amount
6363	6363	of the distribution that exceeds what could have been
6364	6364	3109
6365	6365	3110
6366	6366	3111
6367	6367	3112
6368	6368	3113
6369	6369	3114
6370	6370	3115
6371	6371	3116
6372	6372	3117
6373	6373	3118
6374	6374	3119
6375	6375	3120
6376	6376	3121
6377	6377	3122
6378	6378	3123
6379	6379	3124
6380	6380	3125
6381	6381	3126
6382	6382	3127
6383	6383	3128
6384	6384	3129
6385	6385	3130
6386	6386	3131
6387	6387	3132
6388	6388	3133
6389	6389	3134
6390	6390	3135
6391	6391	3136 SB245 INTRODUCEDSB245 INTRODUCED
6392	6392	Page 113
6393	6393	distributed without violating Section 10A-3A-6.40 or Section
6394	6394	10A-3A-11.07 if the party asserting liability establishes that
6395	6395	when taking the action the director did not comply with
6396	6396	Section 10A-3A-8.30.
6397	6397	(b) A director held liable under subsection (a) for an
6398	6398	unlawful distribution is entitled to:
6399	6399	(1) contribution from every other director who could be
6400	6400	held liable under subsection (a) for the unlawful
6401	6401	distribution; and
6402	6402	(2) recoupment from each person of the pro-rata portion
6403	6403	of the amount of the unlawful distribution the person
6404	6404	received, whether or not the person knew the distribution was
6405	6405	made in violation of Section 10A-3A-6.40 or Section
6406	6406	10A-3A-11.07.
6407	6407	(c) A proceeding to enforce:
6408	6408	(1) the liability of a director under subsection (a) is
6409	6409	barred unless it is commenced within two years after the date
6410	6410	on which the distribution was made; or
6411	6411	(2) contribution or recoupment under subsection (b) is
6412	6412	barred unless it is commenced within one year after the
6413	6413	liability of the claimant has been finally adjudicated under
6414	6414	subsection (a).
6415	6415	§10A-3A-8.33. Loans to or guarantees for directors and
6416	6416	officers.
6417	6417	(a) A nonprofit corporation may not lend money to or
6418	6418	guarantee the obligation of a director or officer of the
6419	6419	nonprofit corporation.
6420	6420	(b) The fact that a loan or guarantee is made in
6421	6421	3137
6422	6422	3138
6423	6423	3139
6424	6424	3140
6425	6425	3141
6426	6426	3142
6427	6427	3143
6428	6428	3144
6429	6429	3145
6430	6430	3146
6431	6431	3147
6432	6432	3148
6433	6433	3149
6434	6434	3150
6435	6435	3151
6436	6436	3152
6437	6437	3153
6438	6438	3154
6439	6439	3155
6440	6440	3156
6441	6441	3157
6442	6442	3158
6443	6443	3159
6444	6444	3160
6445	6445	3161
6446	6446	3162
6447	6447	3163
6448	6448	3164 SB245 INTRODUCEDSB245 INTRODUCED
6449	6449	Page 114
6450	6450	violation of this section does not affect the borrower's
6451	6451	liability on the loan.
6452	6452	DIVISION D. OFFICERS.
6453	6453	§10A-3A-8.40. Officers.
6454	6454	(a) A nonprofit corporation has the officers described
6455	6455	in its certificate of incorporation or bylaws or appointed by
6456	6456	the board of directors in accordance with the certificate of
6457	6457	incorporation or bylaws.
6458	6458	(b) The board of directors may elect individuals to
6459	6459	fill one or more offices of the nonprofit corporation.
6460	6460	(c) The certificate of incorporation, bylaws, or the
6461	6461	board of directors shall assign to an officer responsibility
6462	6462	for maintaining and authenticating the records of the
6463	6463	nonprofit corporation required to be kept under Section
6464	6464	10A-3A-4.01.
6465	6465	(d) Unless the certificate of incorporation or bylaws
6466	6466	provide otherwise, the same individual may simultaneously hold
6467	6467	more than one office in a nonprofit corporation.
6468	6468	§10A-3A-8.41. Functions of officers.
6469	6469	Each officer has the authority and shall perform the
6470	6470	functions set forth in the certificate of incorporation or
6471	6471	bylaws or, to the extent consistent with the certificate of
6472	6472	incorporation or bylaws, the functions prescribed by the board
6473	6473	of directors or by direction of an officer authorized by the
6474	6474	board of directors to prescribe the functions of other
6475	6475	officers.
6476	6476	§10A-3A-8.42. Standards of conduct for officers.
6477	6477	Division C of Article 3 of Chapter 1 shall not apply to
6478	6478	3165
6479	6479	3166
6480	6480	3167
6481	6481	3168
6482	6482	3169
6483	6483	3170
6484	6484	3171
6485	6485	3172
6486	6486	3173
6487	6487	3174
6488	6488	3175
6489	6489	3176
6490	6490	3177
6491	6491	3178
6492	6492	3179
6493	6493	3180
6494	6494	3181
6495	6495	3182
6496	6496	3183
6497	6497	3184
6498	6498	3185
6499	6499	3186
6500	6500	3187
6501	6501	3188
6502	6502	3189
6503	6503	3190
6504	6504	3191
6505	6505	3192 SB245 INTRODUCEDSB245 INTRODUCED
6506	6506	Page 115
6507	6507	this chapter. Instead:
6508	6508	(a) An officer, when performing in that capacity, has
6509	6509	the duty to act:
6510	6510	(1) in good faith;
6511	6511	(2) with the care that a person in a like position
6512	6512	would reasonably exercise under similar circumstances; and
6513	6513	(3) in a manner the officer reasonably believes to be
6514	6514	in the best interests of the nonprofit corporation.
6515	6515	(b) The duty of an officer includes the obligation:
6516	6516	(1) to inform the superior officer to whom, or the
6517	6517	board of directors or the board committee to which, the
6518	6518	officer reports of information about the affairs of the
6519	6519	nonprofit corporation known to the officer, within the scope
6520	6520	of the officer's functions, and known to the officer to be
6521	6521	material to the superior officer, board of directors, or board
6522	6522	committee; and
6523	6523	(2) to inform the officer's superior officer, or
6524	6524	another appropriate person within the nonprofit corporation,
6525	6525	or the board of directors, or a board committee, of any actual
6526	6526	or probable material violation of law involving the nonprofit
6527	6527	corporation or material breach of duty to the nonprofit
6528	6528	corporation by an officer, employee, or agent of the nonprofit
6529	6529	corporation, that the officer believes has occurred or is
6530	6530	likely to occur.
6531	6531	(c) In discharging the officer's duties, an officer who
6532	6532	does not have knowledge that makes reliance unwarranted is
6533	6533	entitled to rely on:
6534	6534	(1) the performance of properly delegated
6535	6535	3193
6536	6536	3194
6537	6537	3195
6538	6538	3196
6539	6539	3197
6540	6540	3198
6541	6541	3199
6542	6542	3200
6543	6543	3201
6544	6544	3202
6545	6545	3203
6546	6546	3204
6547	6547	3205
6548	6548	3206
6549	6549	3207
6550	6550	3208
6551	6551	3209
6552	6552	3210
6553	6553	3211
6554	6554	3212
6555	6555	3213
6556	6556	3214
6557	6557	3215
6558	6558	3216
6559	6559	3217
6560	6560	3218
6561	6561	3219
6562	6562	3220 SB245 INTRODUCEDSB245 INTRODUCED
6563	6563	Page 116
6564	6564	responsibilities by one or more employees, one or more
6565	6565	volunteers of the nonprofit corporation, or one or more other
6566	6566	persons associated with the nonprofit corporation, to whom
6567	6567	that officer has delegated responsibilities and whom the
6568	6568	officer reasonably believes to be reliable and competent in
6569	6569	performing the responsibilities delegated;
6570	6570	(2) information, opinions, reports, or statements,
6571	6571	including financial statements and other financial data,
6572	6572	prepared or presented by one or more officers or employees,
6573	6573	one or more volunteers of the nonprofit corporation, or one or
6574	6574	more other persons associated with the nonprofit corporation,
6575	6575	whom the officer reasonably believes to be reliable and
6576	6576	competent in the matters presented, or legal counsel, public
6577	6577	accountants, or other persons retained by the nonprofit
6578	6578	corporation as to matters involving skills or expertise the
6579	6579	officer reasonably believes are matters: (i) within the
6580	6580	particular person's professional or expert competence, or (ii)
6581	6581	as to which the particular person merits confidence; or
6582	6582	(3) volunteers of the nonprofit corporation or one or
6583	6583	more persons associated with the nonprofit corporation.
6584	6584	(d) An officer is not liable to the nonprofit
6585	6585	corporation or its members for any decision to take or not to
6586	6586	take action, or any failure to take any action, as an officer,
6587	6587	if the duties of the office are performed in compliance with
6588	6588	this section. Whether an officer who does not comply with this
6589	6589	section shall have liability will depend in such instance on
6590	6590	applicable law, including those principles of Section
6591	6591	10A-3A-8.31 that have relevance.
6592	6592	3221
6593	6593	3222
6594	6594	3223
6595	6595	3224
6596	6596	3225
6597	6597	3226
6598	6598	3227
6599	6599	3228
6600	6600	3229
6601	6601	3230
6602	6602	3231
6603	6603	3232
6604	6604	3233
6605	6605	3234
6606	6606	3235
6607	6607	3236
6608	6608	3237
6609	6609	3238
6610	6610	3239
6611	6611	3240
6612	6612	3241
6613	6613	3242
6614	6614	3243
6615	6615	3244
6616	6616	3245
6617	6617	3246
6618	6618	3247
6619	6619	3248 SB245 INTRODUCEDSB245 INTRODUCED
6620	6620	Page 117
6621	6621	§10A-3A-8.43. Resignation and removal of officers.
6622	6622	Division C of Article 3 of Chapter 1 shall not apply to
6623	6623	this chapter. Instead:
6624	6624	(a) An officer may resign at any time by delivering a
6625	6625	written notice to the board of directors, its chair, the
6626	6626	appointing officer, the secretary, or the nonprofit
6627	6627	corporation. A resignation is effective as provided in Section
6628	6628	10A-3A-1.03 unless the notice provides for a delayed
6629	6629	effectiveness, including effectiveness determined upon a
6630	6630	future event or events. If effectiveness of a resignation is
6631	6631	stated to be delayed and the board of directors or the
6632	6632	appointing officer accepts the delay, the board of directors
6633	6633	or the appointing officer may fill the pending vacancy before
6634	6634	the delayed effectiveness, but the new officer may not take
6635	6635	office until the vacancy occurs.
6636	6636	(b) An officer may be removed at any time with or
6637	6637	without cause by (i) the board of directors; (ii) the
6638	6638	appointing officer, unless the certificate of incorporation,
6639	6639	bylaws, or the board of directors provide otherwise; or (iii)
6640	6640	any other officer if authorized by the certificate of
6641	6641	incorporation, bylaws, or the board of directors.
6642	6642	(c) In this section, "appointing officer" means the
6643	6643	officer (including any successor to that officer) who
6644	6644	appointed the officer resigning or being removed.
6645	6645	§10A-3A-8.44. Contract rights of officers.
6646	6646	(a) The election or appointment of an officer does not
6647	6647	itself create contract rights.
6648	6648	(b) An officer's removal does not affect the officer's
6649	6649	3249
6650	6650	3250
6651	6651	3251
6652	6652	3252
6653	6653	3253
6654	6654	3254
6655	6655	3255
6656	6656	3256
6657	6657	3257
6658	6658	3258
6659	6659	3259
6660	6660	3260
6661	6661	3261
6662	6662	3262
6663	6663	3263
6664	6664	3264
6665	6665	3265
6666	6666	3266
6667	6667	3267
6668	6668	3268
6669	6669	3269
6670	6670	3270
6671	6671	3271
6672	6672	3272
6673	6673	3273
6674	6674	3274
6675	6675	3275
6676	6676	3276 SB245 INTRODUCEDSB245 INTRODUCED
6677	6677	Page 118
6678	6678	contract rights, if any, with the nonprofit corporation. An
6679	6679	officer's resignation does not affect the nonprofit
6680	6680	corporation's contract rights, if any, with the officer.
6681	6681	DIVISION E. INDEMNIFICATION AND ADVANCEMENT OF
6682	6682	EXPENSES.
6683	6683	§10A-3A-8.50. Division definitions.
6684	6684	In this division:
6685	6685	(1) "DIRECTOR" or "OFFICER" means an individual who is
6686	6686	or was a director or officer, respectively, of a nonprofit
6687	6687	corporation or who, while a director or officer of the
6688	6688	nonprofit corporation, is or was serving at the nonprofit
6689	6689	corporation's request as a director, officer, manager, member,
6690	6690	partner, trustee, employee, or agent of another entity or
6691	6691	employee benefit plan. A director or officer is considered to
6692	6692	be serving an employee benefit plan at the nonprofit
6693	6693	corporation's request if the individual's duties to the
6694	6694	nonprofit corporation also impose duties on, or otherwise
6695	6695	involve services by, the individual to the plan or to
6696	6696	participants in or beneficiaries of the plan. "Director" or
6697	6697	"officer" includes, unless the context requires otherwise (i)
6698	6698	the estate or personal representative of a director or officer
6699	6699	and (ii) with respect to a director, an individual designated,
6700	6700	elected, or appointed by that or any other name or title.
6701	6701	(2) "LIABILITY" means the obligation to pay a judgment,
6702	6702	settlement, penalty, fine (including an excise tax assessed
6703	6703	with respect to an employee benefit plan), or expenses
6704	6704	incurred with respect to a proceeding.
6705	6705	(3) "NONPROFIT CORPORATION" includes any domestic or
6706	6706	3277
6707	6707	3278
6708	6708	3279
6709	6709	3280
6710	6710	3281
6711	6711	3282
6712	6712	3283
6713	6713	3284
6714	6714	3285
6715	6715	3286
6716	6716	3287
6717	6717	3288
6718	6718	3289
6719	6719	3290
6720	6720	3291
6721	6721	3292
6722	6722	3293
6723	6723	3294
6724	6724	3295
6725	6725	3296
6726	6726	3297
6727	6727	3298
6728	6728	3299
6729	6729	3300
6730	6730	3301
6731	6731	3302
6732	6732	3303
6733	6733	3304 SB245 INTRODUCEDSB245 INTRODUCED
6734	6734	Page 119
6735	6735	foreign predecessor entity of a nonprofit corporation.
6736	6736	(4) "OFFICIAL CAPACITY" means: (i) when used with
6737	6737	respect to a director, the office of director in a nonprofit
6738	6738	corporation; and (ii) when used with respect to an officer, as
6739	6739	contemplated in Section 10A-3A-8.56, the office in a nonprofit
6740	6740	corporation held by the officer. "Official capacity" does not
6741	6741	include service for any other corporation or foreign
6742	6742	corporation or any joint venture, trust, employee benefit
6743	6743	plan, or other entity.
6744	6744	(5) "PARTY" means an individual who was, is, or is
6745	6745	threatened to be made, a defendant or respondent in a
6746	6746	proceeding.
6747	6747	(6) "PROCEEDING" means any threatened, pending, or
6748	6748	completed action, suit, or proceeding, whether civil,
6749	6749	criminal, administrative, arbitrative, or investigative and
6750	6750	whether formal or informal.
6751	6751	§10A-3A-8.51. Permissible indemnification.
6752	6752	(a) Except as otherwise provided in this section, a
6753	6753	nonprofit corporation may indemnify an individual who is a
6754	6754	party to a proceeding because the individual is a director
6755	6755	against liability incurred in the proceeding if:
6756	6756	(1)(i) the director conducted himself or herself in
6757	6757	good faith; and
6758	6758	(ii) the director reasonably believed:
6759	6759	(A) in the case of conduct in an official capacity,
6760	6760	that his or her conduct was in the best interests of the
6761	6761	nonprofit corporation; and
6762	6762	(B) in all other cases, that the director's conduct was
6763	6763	3305
6764	6764	3306
6765	6765	3307
6766	6766	3308
6767	6767	3309
6768	6768	3310
6769	6769	3311
6770	6770	3312
6771	6771	3313
6772	6772	3314
6773	6773	3315
6774	6774	3316
6775	6775	3317
6776	6776	3318
6777	6777	3319
6778	6778	3320
6779	6779	3321
6780	6780	3322
6781	6781	3323
6782	6782	3324
6783	6783	3325
6784	6784	3326
6785	6785	3327
6786	6786	3328
6787	6787	3329
6788	6788	3330
6789	6789	3331
6790	6790	3332 SB245 INTRODUCEDSB245 INTRODUCED
6791	6791	Page 120
6792	6792	at least not opposed to the best interests of the nonprofit
6793	6793	corporation; and
6794	6794	(iii) in the case of any criminal proceeding, the
6795	6795	director had no reasonable cause to believe his or her conduct
6796	6796	was unlawful; or
6797	6797	(2) the director engaged in conduct for which broader
6798	6798	indemnification has been made permissible or obligatory under
6799	6799	a provision of the certificate of incorporation (as authorized
6800	6800	by Section 10A-3A-2.02).
6801	6801	(b) A director's conduct with respect to an employee
6802	6802	benefit plan for a purpose the director reasonably believed to
6803	6803	be in the interests of the participants in, and the
6804	6804	beneficiaries of, the plan is conduct that satisfies the
6805	6805	requirement of subsection (a)(1)(ii)(B).
6806	6806	(c) The termination of a proceeding by judgment, order,
6807	6807	settlement, or conviction, or upon a plea of nolo contendere
6808	6808	or its equivalent, is not, of itself, determinative that the
6809	6809	director did not meet the relevant standard of conduct
6810	6810	described in this section.
6811	6811	(d) Unless ordered by a court under Section
6812	6812	10A-3A-8.54(a)(3), a nonprofit corporation may not indemnify a
6813	6813	director:
6814	6814	(1) in connection with a proceeding by the nonprofit
6815	6815	corporation, except for expenses incurred in connection with
6816	6816	the proceeding if it is determined that the director has met
6817	6817	the relevant standard of conduct under subsection (a); or
6818	6818	(2) in connection with any proceeding with respect to
6819	6819	conduct for which the director was adjudged liable on the
6820	6820	3333
6821	6821	3334
6822	6822	3335
6823	6823	3336
6824	6824	3337
6825	6825	3338
6826	6826	3339
6827	6827	3340
6828	6828	3341
6829	6829	3342
6830	6830	3343
6831	6831	3344
6832	6832	3345
6833	6833	3346
6834	6834	3347
6835	6835	3348
6836	6836	3349
6837	6837	3350
6838	6838	3351
6839	6839	3352
6840	6840	3353
6841	6841	3354
6842	6842	3355
6843	6843	3356
6844	6844	3357
6845	6845	3358
6846	6846	3359
6847	6847	3360 SB245 INTRODUCEDSB245 INTRODUCED
6848	6848	Page 121
6849	6849	basis of receiving a financial benefit to which the director
6850	6850	was not entitled, regardless of whether it involved action in
6851	6851	the director's official capacity.
6852	6852	§10A-3A-8.52. Permitted mandatory indemnification.
6853	6853	A nonprofit corporation may provide in its certificate
6854	6854	of incorporation or bylaws that the nonprofit corporation
6855	6855	shall indemnify a director who was wholly successful, on the
6856	6856	merits or otherwise, in the defense of any proceeding to which
6857	6857	the director was a party because the director was a director
6858	6858	of the nonprofit corporation against expenses incurred by the
6859	6859	director in connection with the proceeding.
6860	6860	§10A-3A-8.53. Advance for expenses.
6861	6861	(a) A nonprofit corporation may, before final
6862	6862	disposition of a proceeding, advance funds to pay for or
6863	6863	reimburse expenses incurred in connection with the proceeding
6864	6864	by an individual who is a party to the proceeding because that
6865	6865	individual is a director if the director delivers to the
6866	6866	nonprofit corporation a signed written undertaking of the
6867	6867	director to repay any funds advanced if (i) the director is
6868	6868	not entitled to mandatory indemnification under Section
6869	6869	10A-3A-8.52 and (ii) it is ultimately determined under Section
6870	6870	10A-3A-8.54 or Section 10A-3A-8.55 that the director is not
6871	6871	entitled to indemnification.
6872	6872	(b) The undertaking required by subsection (a) must be
6873	6873	an unlimited general obligation of the director but need not
6874	6874	be secured and may be accepted without reference to the
6875	6875	financial ability of the director to make repayment.
6876	6876	(c) Authorizations under this section shall be made:
6877	6877	3361
6878	6878	3362
6879	6879	3363
6880	6880	3364
6881	6881	3365
6882	6882	3366
6883	6883	3367
6884	6884	3368
6885	6885	3369
6886	6886	3370
6887	6887	3371
6888	6888	3372
6889	6889	3373
6890	6890	3374
6891	6891	3375
6892	6892	3376
6893	6893	3377
6894	6894	3378
6895	6895	3379
6896	6896	3380
6897	6897	3381
6898	6898	3382
6899	6899	3383
6900	6900	3384
6901	6901	3385
6902	6902	3386
6903	6903	3387
6904	6904	3388 SB245 INTRODUCEDSB245 INTRODUCED
6905	6905	Page 122
6906	6906	(1) by the board of directors:
6907	6907	(i) if there are two or more qualified directors, by a
6908	6908	majority vote of all the qualified directors (a majority of
6909	6909	whom shall for that purpose constitute a quorum) or by a
6910	6910	majority of the members of a committee consisting solely of
6911	6911	two or more qualified directors appointed by a majority vote
6912	6912	of qualified directors; or
6913	6913	(ii) if there are fewer than two qualified directors,
6914	6914	by the vote necessary for action by the board of directors in
6915	6915	accordance with Section 10A-3A-8.24(c), in which authorization
6916	6916	directors who are not qualified directors may participate; or
6917	6917	(2) by the members, but membership interests owned by
6918	6918	or voted under the control of a director who at the time is
6919	6919	not a qualified director may not be voted on the
6920	6920	authorization.
6921	6921	§10A-3A-8.54. Court-ordered indemnification and advance
6922	6922	for expenses.
6923	6923	(a) A director who is a party to a proceeding because
6924	6924	he or she is a director may apply for indemnification or an
6925	6925	advance for expenses to the court conducting the proceeding or
6926	6926	to another court of competent jurisdiction. After receipt of
6927	6927	an application and after giving any notice it considers
6928	6928	necessary, the court shall:
6929	6929	(1) order indemnification if the court determines that
6930	6930	the director is entitled to indemnification pursuant to a
6931	6931	provision authorized by Section 10A-3A-8.52;
6932	6932	(2) order indemnification or advance for expenses if
6933	6933	the court determines that the director is entitled to
6934	6934	3389
6935	6935	3390
6936	6936	3391
6937	6937	3392
6938	6938	3393
6939	6939	3394
6940	6940	3395
6941	6941	3396
6942	6942	3397
6943	6943	3398
6944	6944	3399
6945	6945	3400
6946	6946	3401
6947	6947	3402
6948	6948	3403
6949	6949	3404
6950	6950	3405
6951	6951	3406
6952	6952	3407
6953	6953	3408
6954	6954	3409
6955	6955	3410
6956	6956	3411
6957	6957	3412
6958	6958	3413
6959	6959	3414
6960	6960	3415
6961	6961	3416 SB245 INTRODUCEDSB245 INTRODUCED
6962	6962	Page 123
6963	6963	indemnification or advance for expenses pursuant to a
6964	6964	provision authorized by Section 10A-3A-8.58(a); or
6965	6965	(3) order indemnification or advance for expenses if
6966	6966	the court determines, in view of all the relevant
6967	6967	circumstances, that it is fair and reasonable: (i) to
6968	6968	indemnify the director, or (ii) to advance expenses to the
6969	6969	director, even if, in the case of (i) or (ii), the director
6970	6970	has not met the relevant standard of conduct set forth in
6971	6971	Section 10A-3A-8.51(a), failed to comply with Section
6972	6972	10A-3A-8.53, or was adjudged liable in a proceeding referred
6973	6973	to in Section 10A-3A-8.51(d)(1) or Section 10A-3A-8.51(d)(2),
6974	6974	but if the director was adjudged so liable indemnification
6975	6975	shall be limited to expenses incurred in connection with the
6976	6976	proceeding.
6977	6977	(b) If the court determines that the director is
6978	6978	entitled to indemnification under subsection (a)(1) or to
6979	6979	indemnification or advance for expenses under subsection
6980	6980	(a)(2), it shall also order the nonprofit corporation to pay
6981	6981	the director's expenses incurred in connection with obtaining
6982	6982	court-ordered indemnification or advance for expenses. If the
6983	6983	court determines that the director is entitled to
6984	6984	indemnification or advance for expenses under subsection
6985	6985	(a)(3), it may also order the nonprofit corporation to pay the
6986	6986	director's expenses to obtain court-ordered indemnification or
6987	6987	advance for expenses.
6988	6988	§10A-3A-8.55. Determination and authorization of
6989	6989	indemnification.
6990	6990	(a) A nonprofit corporation may not indemnify a
6991	6991	3417
6992	6992	3418
6993	6993	3419
6994	6994	3420
6995	6995	3421
6996	6996	3422
6997	6997	3423
6998	6998	3424
6999	6999	3425
7000	7000	3426
7001	7001	3427
7002	7002	3428
7003	7003	3429
7004	7004	3430
7005	7005	3431
7006	7006	3432
7007	7007	3433
7008	7008	3434
7009	7009	3435
7010	7010	3436
7011	7011	3437
7012	7012	3438
7013	7013	3439
7014	7014	3440
7015	7015	3441
7016	7016	3442
7017	7017	3443
7018	7018	3444 SB245 INTRODUCEDSB245 INTRODUCED
7019	7019	Page 124
7020	7020	director under Section 10A-3A-8.51 unless authorized for a
7021	7021	specific proceeding after a determination has been made that
7022	7022	indemnification is permissible because the director has met
7023	7023	the relevant standard of conduct set forth in Section
7024	7024	10A-3A-8.51.
7025	7025	(b) The determination shall be made:
7026	7026	(1) if there are two or more qualified directors, by
7027	7027	the board of directors by a majority vote of all the qualified
7028	7028	directors (a majority of whom shall for that purpose
7029	7029	constitute a quorum), or by a majority of the members of a
7030	7030	committee of two or more qualified directors appointed by a
7031	7031	majority vote of qualified directors;
7032	7032	(2) by special legal counsel:
7033	7033	(i) selected in the manner prescribed in subsection
7034	7034	(b)(1); or
7035	7035	(ii) if there are fewer than two qualified directors,
7036	7036	selected by the board of directors (in which selection
7037	7037	directors who are not qualified directors may participate); or
7038	7038	(3) by the members, but membership interests owned by
7039	7039	or voted under the control of a director who at the time is
7040	7040	not a qualified director may not be voted on the
7041	7041	determination.
7042	7042	(c) Authorization of indemnification shall be made in
7043	7043	the same manner as the determination that indemnification is
7044	7044	permissible except that if there are fewer than two qualified
7045	7045	directors, or if the determination is made by special legal
7046	7046	counsel, authorization of indemnification shall be made by
7047	7047	those entitled to select special legal counsel under
7048	7048	3445
7049	7049	3446
7050	7050	3447
7051	7051	3448
7052	7052	3449
7053	7053	3450
7054	7054	3451
7055	7055	3452
7056	7056	3453
7057	7057	3454
7058	7058	3455
7059	7059	3456
7060	7060	3457
7061	7061	3458
7062	7062	3459
7063	7063	3460
7064	7064	3461
7065	7065	3462
7066	7066	3463
7067	7067	3464
7068	7068	3465
7069	7069	3466
7070	7070	3467
7071	7071	3468
7072	7072	3469
7073	7073	3470
7074	7074	3471
7075	7075	3472 SB245 INTRODUCEDSB245 INTRODUCED
7076	7076	Page 125
7077	7077	subsection (b)(2)(ii).
7078	7078	§10A-3A-8.56. Indemnification of officers.
7079	7079	(a) A nonprofit corporation may indemnify and advance
7080	7080	expenses under this Division E of this Article 8 to an officer
7081	7081	who is a party to a proceeding because he or she is an
7082	7082	officer:
7083	7083	(1) to the same extent as a director; and
7084	7084	(2) if he or she is an officer but not a director, to
7085	7085	such further extent as may be provided by the certificate of
7086	7086	incorporation or the bylaws, or by a resolution adopted or a
7087	7087	contract approved by the board of directors or members except
7088	7088	for
7089	7089	(i) liability in connection with a proceeding by the
7090	7090	nonprofit corporation other than for expenses incurred in
7091	7091	connection with the proceeding, or
7092	7092	(ii) liability arising out of conduct that constitutes
7093	7093	(A) receipt by the officer of a financial benefit to
7094	7094	which the officer is not entitled,
7095	7095	(B) an intentional infliction of harm on the nonprofit
7096	7096	corporation or the members, or
7097	7097	(C) an intentional violation of criminal law.
7098	7098	(b) Subsection (a)(2) shall apply to an officer who is
7099	7099	also a director if the person is made a party to the
7100	7100	proceeding based on an act or omission solely as an officer.
7101	7101	(c) An officer who is not a director is entitled to
7102	7102	indemnification under Section 10A-3A-8.52 if the certificate
7103	7103	of incorporation or bylaws of the nonprofit corporation allows
7104	7104	for such indemnification, and may apply to a court under
7105	7105	3473
7106	7106	3474
7107	7107	3475
7108	7108	3476
7109	7109	3477
7110	7110	3478
7111	7111	3479
7112	7112	3480
7113	7113	3481
7114	7114	3482
7115	7115	3483
7116	7116	3484
7117	7117	3485
7118	7118	3486
7119	7119	3487
7120	7120	3488
7121	7121	3489
7122	7122	3490
7123	7123	3491
7124	7124	3492
7125	7125	3493
7126	7126	3494
7127	7127	3495
7128	7128	3496
7129	7129	3497
7130	7130	3498
7131	7131	3499
7132	7132	3500 SB245 INTRODUCEDSB245 INTRODUCED
7133	7133	Page 126
7134	7134	Section 10A-3A-8.54 for indemnification or an advance for
7135	7135	expenses, in each case to the same extent to which a director
7136	7136	may be entitled to indemnification or advance for expenses
7137	7137	under those sections, unless otherwise provided in the
7138	7138	certificate of incorporation or bylaws.
7139	7139	§10A-3A-8.57. Insurance.
7140	7140	A nonprofit corporation may purchase and maintain
7141	7141	insurance on behalf of an individual who is a director or
7142	7142	officer of the nonprofit corporation, or who, while a director
7143	7143	or officer of the nonprofit corporation, serves at the
7144	7144	nonprofit corporation's request as a director, officer,
7145	7145	partner, trustee, employee, or agent of another corporation or
7146	7146	foreign corporation or a joint venture, trust, employee
7147	7147	benefit plan, or other entity, against liability asserted
7148	7148	against or incurred by the individual in that capacity or
7149	7149	arising from the individual's status as a director or officer,
7150	7150	regardless of whether the nonprofit corporation would have
7151	7151	power to indemnify or advance expenses to the individual
7152	7152	against the same liability under this Division E of this
7153	7153	Article 8.
7154	7154	§10A-3A-8.58. Variation by corporate action;
7155	7155	application of division.
7156	7156	(a) A nonprofit corporation may, by a provision in its
7157	7157	certificate of incorporation, bylaws, or in a resolution
7158	7158	adopted or a contract approved by the board of directors or
7159	7159	members, obligate itself in advance of the act or omission
7160	7160	giving rise to a proceeding to provide indemnification in
7161	7161	accordance with Section 10A-3A-8.51 or advance funds to pay
7162	7162	3501
7163	7163	3502
7164	7164	3503
7165	7165	3504
7166	7166	3505
7167	7167	3506
7168	7168	3507
7169	7169	3508
7170	7170	3509
7171	7171	3510
7172	7172	3511
7173	7173	3512
7174	7174	3513
7175	7175	3514
7176	7176	3515
7177	7177	3516
7178	7178	3517
7179	7179	3518
7180	7180	3519
7181	7181	3520
7182	7182	3521
7183	7183	3522
7184	7184	3523
7185	7185	3524
7186	7186	3525
7187	7187	3526
7188	7188	3527
7189	7189	3528 SB245 INTRODUCEDSB245 INTRODUCED
7190	7190	Page 127
7191	7191	for or reimburse expenses in accordance with Section
7192	7192	10A-3A-8.53. Any obligatory provision shall be deemed to
7193	7193	satisfy the requirements for authorization referred to in
7194	7194	Section 10A-3A-8.53(c) and in Section 10A-3A-8.55(c). Any
7195	7195	provision that obligates the nonprofit corporation to provide
7196	7196	indemnification to the fullest extent permitted by law shall
7197	7197	be deemed to obligate the nonprofit corporation to advance
7198	7198	funds to pay for or reimburse expenses in accordance with
7199	7199	Section 10A-3A-8.53 to the fullest extent permitted by law,
7200	7200	unless the provision expressly provides otherwise.
7201	7201	(b) A right of indemnification or to advances for
7202	7202	expenses created by this Division E of this Article 8 or under
7203	7203	subsection (a) and in effect at the time of an act or omission
7204	7204	shall not be eliminated or impaired with respect to the act or
7205	7205	omission by an amendment of the certificate of incorporation,
7206	7206	bylaws, or a resolution of the board of directors or members,
7207	7207	adopted after the occurrence of the act or omission, unless,
7208	7208	in the case of a right created under subsection (a), the
7209	7209	provision creating the right and in effect at the time of the
7210	7210	act or omission explicitly authorizes elimination or
7211	7211	impairment after the act or omission has occurred.
7212	7212	(c) Any provision pursuant to subsection (a) shall not
7213	7213	obligate the nonprofit corporation to indemnify or advance
7214	7214	expenses to a director of a predecessor of the nonprofit
7215	7215	corporation, pertaining to conduct with respect to the
7216	7216	predecessor, unless otherwise expressly provided. Any
7217	7217	provision for indemnification or advance for expenses in the
7218	7218	certificate of incorporation, bylaws, or a resolution of the
7219	7219	3529
7220	7220	3530
7221	7221	3531
7222	7222	3532
7223	7223	3533
7224	7224	3534
7225	7225	3535
7226	7226	3536
7227	7227	3537
7228	7228	3538
7229	7229	3539
7230	7230	3540
7231	7231	3541
7232	7232	3542
7233	7233	3543
7234	7234	3544
7235	7235	3545
7236	7236	3546
7237	7237	3547
7238	7238	3548
7239	7239	3549
7240	7240	3550
7241	7241	3551
7242	7242	3552
7243	7243	3553
7244	7244	3554
7245	7245	3555
7246	7246	3556 SB245 INTRODUCEDSB245 INTRODUCED
7247	7247	Page 128
7248	7248	board of directors or other similar governing authority of a
7249	7249	predecessor of the nonprofit corporation in a merger or in a
7250	7250	contract to which the predecessor is a party, existing at the
7251	7251	time the merger takes effect, shall be governed by Section
7252	7252	10A-3A-12.06(a)(4).
7253	7253	(d) Subject to subsection (b), a nonprofit corporation
7254	7254	may, by a provision in its certificate of incorporation, limit
7255	7255	any of the rights to indemnification or advance for expenses
7256	7256	created by or pursuant to this Division E of this Article 8.
7257	7257	(e) This Division E of this Article 8 does not limit a
7258	7258	nonprofit corporation's power to pay or reimburse expenses
7259	7259	incurred by a director or an officer in connection with
7260	7260	appearing as a witness in a proceeding at a time when the
7261	7261	director or officer is not a party.
7262	7262	(f) This Division E of this Article 8 does not limit a
7263	7263	nonprofit corporation's power to indemnify, advance expenses
7264	7264	to or provide or maintain insurance on behalf of an employee,
7265	7265	agent, or volunteer.
7266	7266	§10A-3A-8.59. Exclusivity of division.
7267	7267	A nonprofit corporation may provide indemnification or
7268	7268	advance expenses to a director or an officer only as permitted
7269	7269	by this Division E of this Article 8.
7270	7270	DIVISION F. CONFLICTING INTEREST TRANSACTIONS.
7271	7271	§10A-3A-8.60. Interested directors; quorum.
7272	7272	(a) No contract or transaction between a nonprofit
7273	7273	corporation and one or more of its directors or officers, or
7274	7274	between a nonprofit corporation and any other corporation,
7275	7275	partnership, association, or other entity in which one or more
7276	7276	3557
7277	7277	3558
7278	7278	3559
7279	7279	3560
7280	7280	3561
7281	7281	3562
7282	7282	3563
7283	7283	3564
7284	7284	3565
7285	7285	3566
7286	7286	3567
7287	7287	3568
7288	7288	3569
7289	7289	3570
7290	7290	3571
7291	7291	3572
7292	7292	3573
7293	7293	3574
7294	7294	3575
7295	7295	3576
7296	7296	3577
7297	7297	3578
7298	7298	3579
7299	7299	3580
7300	7300	3581
7301	7301	3582
7302	7302	3583
7303	7303	3584 SB245 INTRODUCEDSB245 INTRODUCED
7304	7304	Page 129
7305	7305	of its directors or officers, are directors or officers, or
7306	7306	have a financial interest, shall be void or voidable solely
7307	7307	for this reason, or solely because the director or officer is
7308	7308	present at or participates in the meeting of the board of
7309	7309	directors or committee which authorizes the contract or
7310	7310	transaction, or solely because the director's or officer's
7311	7311	votes are counted for that purpose, if:
7312	7312	(1) The material facts as to the director's or
7313	7313	officer's relationship or interest and as to the contract or
7314	7314	transaction are disclosed or are known to the board of
7315	7315	directors or the committee of a nonmembership nonprofit
7316	7316	corporation, and the board or committee in good faith
7317	7317	authorizes the contract or transaction by the affirmative
7318	7318	votes of a majority of the qualified directors, even though
7319	7319	the qualified directors be less than a quorum; or
7320	7320	(2) The material facts as to the director's or
7321	7321	officer's relationship or interest and as to the contract or
7322	7322	transaction are disclosed or are known to (i) the members in a
7323	7323	membership nonprofit corporation entitled to vote thereon or
7324	7324	(ii) the qualified directors of the board of directors in a
7325	7325	membership nonprofit corporation, and the contract or
7326	7326	transaction is specifically approved in good faith by vote of
7327	7327	the members in a membership nonprofit corporation or the
7328	7328	qualified directors of the board of directors in a membership
7329	7329	nonprofit corporation; or
7330	7330	(3) The contract or transaction is fair as to the
7331	7331	nonprofit corporation as of the time it is authorized,
7332	7332	approved or ratified, by the board of directors, a committee,
7333	7333	3585
7334	7334	3586
7335	7335	3587
7336	7336	3588
7337	7337	3589
7338	7338	3590
7339	7339	3591
7340	7340	3592
7341	7341	3593
7342	7342	3594
7343	7343	3595
7344	7344	3596
7345	7345	3597
7346	7346	3598
7347	7347	3599
7348	7348	3600
7349	7349	3601
7350	7350	3602
7351	7351	3603
7352	7352	3604
7353	7353	3605
7354	7354	3606
7355	7355	3607
7356	7356	3608
7357	7357	3609
7358	7358	3610
7359	7359	3611
7360	7360	3612 SB245 INTRODUCEDSB245 INTRODUCED
7361	7361	Page 130
7362	7362	or the members.
7363	7363	(b) Common or interested directors may be counted in
7364	7364	determining the presence of a quorum at a meeting of the board
7365	7365	of directors or of a committee which authorizes the contract
7366	7366	or transaction.
7367	7367	ARTICLE 9. AMENDMENT OF CERTIFICATE OF INCORPORATION
7368	7368	AND BYLAWS.
7369	7369	DIVISION A. AMENDMENT OF CERTIFICATE OF INCORPORATION.
7370	7370	§10A-3A-9.00. Applicability of Division B of Article 3
7371	7371	of Chapter 1.
7372	7372	Division B of Article 3 of Chapter 1 shall not apply to
7373	7373	this chapter.
7374	7374	§10A-3A-9.01. Authority to amend.
7375	7375	(a) A nonprofit corporation may amend its certificate
7376	7376	of incorporation at any time to add or change a provision that
7377	7377	is required or permitted in the certificate of incorporation
7378	7378	as of the effective date of the amendment or to delete a
7379	7379	provision that is not required to be contained in the
7380	7380	certificate of incorporation. Whether a provision is required
7381	7381	or permitted in the certificate of incorporation is determined
7382	7382	as of the effective date of the amendment.
7383	7383	(b) Neither (i) a member of a membership nonprofit
7384	7384	corporation nor (ii) a person having rights under the
7385	7385	certificate of incorporation, has a vested property right
7386	7386	resulting from any provision in the certificate of
7387	7387	incorporation, including provisions relating to management,
7388	7388	control, purpose, or duration of the nonprofit corporation.
7389	7389	§10A-3A-9.02. Amendment of certificate of incorporation
7390	7390	3613
7391	7391	3614
7392	7392	3615
7393	7393	3616
7394	7394	3617
7395	7395	3618
7396	7396	3619
7397	7397	3620
7398	7398	3621
7399	7399	3622
7400	7400	3623
7401	7401	3624
7402	7402	3625
7403	7403	3626
7404	7404	3627
7405	7405	3628
7406	7406	3629
7407	7407	3630
7408	7408	3631
7409	7409	3632
7410	7410	3633
7411	7411	3634
7412	7412	3635
7413	7413	3636
7414	7414	3637
7415	7415	3638
7416	7416	3639
7417	7417	3640 SB245 INTRODUCEDSB245 INTRODUCED
7418	7418	Page 131
7419	7419	of membership nonprofit corporation before admission of
7420	7420	members.
7421	7421	Subject to Section 10A-3A-9.30, if a membership
7422	7422	nonprofit corporation has not yet admitted any members, the
7423	7423	board of directors, or its incorporators if it has no board of
7424	7424	directors, may adopt one or more amendments to the membership
7425	7425	nonprofit corporation's certificate of incorporation.
7426	7426	§10A-3A-9.03. Amendment of certificate of incorporation
7427	7427	of membership nonprofit corporation after members have been
7428	7428	admitted.
7429	7429	If a membership nonprofit corporation has admitted any
7430	7430	members, an amendment to the certificate of incorporation
7431	7431	shall be adopted in the following manner:
7432	7432	(a) The proposed amendment shall first be adopted by
7433	7433	the board of directors.
7434	7434	(b) Except as provided in subsection (g) and Sections
7435	7435	10A-3A-9.07 and 10A-3A-9.08, the amendment shall then be
7436	7436	approved by the members entitled to vote on the amendment. In
7437	7437	submitting the proposed amendment to the members for approval,
7438	7438	the board of directors shall recommend that the members
7439	7439	approve the amendment, unless the board of directors makes a
7440	7440	determination that because of conflicts of interest or other
7441	7441	special circumstances it should not make such a
7442	7442	recommendation, in which case the board of directors must
7443	7443	inform the members of the basis for that determination.
7444	7444	(c) The board of directors may set conditions for the
7445	7445	approval of the amendment by the members or the effectiveness
7446	7446	of the amendment.
7447	7447	3641
7448	7448	3642
7449	7449	3643
7450	7450	3644
7451	7451	3645
7452	7452	3646
7453	7453	3647
7454	7454	3648
7455	7455	3649
7456	7456	3650
7457	7457	3651
7458	7458	3652
7459	7459	3653
7460	7460	3654
7461	7461	3655
7462	7462	3656
7463	7463	3657
7464	7464	3658
7465	7465	3659
7466	7466	3660
7467	7467	3661
7468	7468	3662
7469	7469	3663
7470	7470	3664
7471	7471	3665
7472	7472	3666
7473	7473	3667
7474	7474	3668 SB245 INTRODUCEDSB245 INTRODUCED
7475	7475	Page 132
7476	7476	(d) If the amendment is required to be approved by the
7477	7477	members, and the approval is to be given at a meeting, the
7478	7478	membership nonprofit corporation shall notify each member
7479	7479	entitled to vote on the amendment of the meeting of members at
7480	7480	which the amendment is to be submitted for approval. The
7481	7481	notice must state that the purpose, or one of the purposes, of
7482	7482	the meeting is to consider the amendment. The notice must
7483	7483	contain or be accompanied by a copy of the amendment.
7484	7484	(e) Unless the certificate of incorporation, or the
7485	7485	board of directors acting pursuant to subsection (c), requires
7486	7486	a greater vote or a greater quorum, approval of the amendment
7487	7487	requires the approval of the members at a meeting at which a
7488	7488	quorum consisting of a majority of the votes entitled to be
7489	7489	cast on the amendment exists, and, if any class of members is
7490	7490	entitled to vote as a separate group on the amendment, except
7491	7491	as provided in Section 10A-3A-9.04(d), the approval of each
7492	7492	separate voting group at a meeting at which a quorum of the
7493	7493	voting group exists consisting of a majority of the votes
7494	7494	entitled to be cast on the amendment by that voting group.
7495	7495	(f) In addition to the adoption and approval of an
7496	7496	amendment by the board of directors and members as required by
7497	7497	this section, an amendment must also be approved by a person
7498	7498	or group of persons, if any, whose approval is required by the
7499	7499	certificate of incorporation in accordance with Section
7500	7500	10A-3A-9.30.
7501	7501	(g) Unless the certificate of incorporation provides
7502	7502	otherwise, the board of directors of a membership nonprofit
7503	7503	corporation may adopt amendments to the membership nonprofit
7504	7504	3669
7505	7505	3670
7506	7506	3671
7507	7507	3672
7508	7508	3673
7509	7509	3674
7510	7510	3675
7511	7511	3676
7512	7512	3677
7513	7513	3678
7514	7514	3679
7515	7515	3680
7516	7516	3681
7517	7517	3682
7518	7518	3683
7519	7519	3684
7520	7520	3685
7521	7521	3686
7522	7522	3687
7523	7523	3688
7524	7524	3689
7525	7525	3690
7526	7526	3691
7527	7527	3692
7528	7528	3693
7529	7529	3694
7530	7530	3695
7531	7531	3696 SB245 INTRODUCEDSB245 INTRODUCED
7532	7532	Page 133
7533	7533	corporation's certificate of incorporation without approval of
7534	7534	the members to:
7535	7535	(1) extend the duration of the membership nonprofit
7536	7536	corporation if it was incorporated at a time when limited
7537	7537	duration was required by law;
7538	7538	(2) delete the names and addresses of the incorporators
7539	7539	or initial directors;
7540	7540	(3) delete the name and address of the initial
7541	7541	registered agent or registered office, if a statement of
7542	7542	change is on file with the Secretary of State;
7543	7543	(4) delete a class of members from the certificate of
7544	7544	incorporation when there are no members in that class; or
7545	7545	(5) change the membership nonprofit corporation name,
7546	7546	provided that the name complies with Article 5 of Chapter 1.
7547	7547	§10A-3A-9.04. Voting on amendments by voting groups.
7548	7548	Except as provided in the certificate of incorporation
7549	7549	or bylaws:
7550	7550	(a) If a membership nonprofit corporation has more than
7551	7551	one class of members, the members of each class are entitled
7552	7552	to vote as a separate voting group (if member voting is
7553	7553	otherwise required by this chapter) on a proposed amendment to
7554	7554	the certificate of incorporation if the amendment would:
7555	7555	(1) effect an exchange or reclassification of all or
7556	7556	part of the memberships of the class into memberships of
7557	7557	another class;
7558	7558	(2) effect an exchange or reclassification, or create
7559	7559	the right of exchange, of all or part of the memberships of
7560	7560	another class into memberships of the class;
7561	7561	3697
7562	7562	3698
7563	7563	3699
7564	7564	3700
7565	7565	3701
7566	7566	3702
7567	7567	3703
7568	7568	3704
7569	7569	3705
7570	7570	3706
7571	7571	3707
7572	7572	3708
7573	7573	3709
7574	7574	3710
7575	7575	3711
7576	7576	3712
7577	7577	3713
7578	7578	3714
7579	7579	3715
7580	7580	3716
7581	7581	3717
7582	7582	3718
7583	7583	3719
7584	7584	3720
7585	7585	3721
7586	7586	3722
7587	7587	3723
7588	7588	3724 SB245 INTRODUCEDSB245 INTRODUCED
7589	7589	Page 134
7590	7590	(3) change the rights, preferences, or limitations of
7591	7591	all or part of the memberships of the class;
7592	7592	(4) change the rights, preferences, or limitations of
7593	7593	all or part of the memberships of the class by changing the
7594	7594	rights, preferences, or limitations of another class;
7595	7595	(5) create a new class of memberships having rights or
7596	7596	preferences that are prior or superior to the other
7597	7597	memberships;
7598	7598	(6) increase or decrease the number of memberships
7599	7599	authorized for the class;
7600	7600	(7) increase or decrease the number of memberships
7601	7601	authorized for another class; or
7602	7602	(8) authorize a new class of memberships.
7603	7603	(b) If a class of members will be divided into two or
7604	7604	more classes by an amendment to the certificate of
7605	7605	incorporation, the amendment must be approved by a majority of
7606	7606	the members of each class that will be created.
7607	7607	(c) If a proposed amendment would affect less than all
7608	7608	of the members of a class in one or more of the ways described
7609	7609	in subsection (a), the members so affected are entitled to
7610	7610	vote as a separate voting group on the proposed amendment.
7611	7611	(d) If a proposed amendment that entitles the holders
7612	7612	of two or more classes of memberships to vote as separate
7613	7613	voting groups under this section would affect those two or
7614	7614	more classes in the same or a substantially similar way, the
7615	7615	holders of the memberships of all the classes so affected
7616	7616	shall vote together as a single voting group on the proposed
7617	7617	amendment, unless added as a condition by the board of
7618	7618	3725
7619	7619	3726
7620	7620	3727
7621	7621	3728
7622	7622	3729
7623	7623	3730
7624	7624	3731
7625	7625	3732
7626	7626	3733
7627	7627	3734
7628	7628	3735
7629	7629	3736
7630	7630	3737
7631	7631	3738
7632	7632	3739
7633	7633	3740
7634	7634	3741
7635	7635	3742
7636	7636	3743
7637	7637	3744
7638	7638	3745
7639	7639	3746
7640	7640	3747
7641	7641	3748
7642	7642	3749
7643	7643	3750
7644	7644	3751
7645	7645	3752 SB245 INTRODUCEDSB245 INTRODUCED
7646	7646	Page 135
7647	7647	directors pursuant to Section 10A-3A-9.03(c).
7648	7648	§10A-3A-9.05. Amendment of certificate of incorporation
7649	7649	of nonmembership nonprofit corporation.
7650	7650	Except as otherwise provided in the certificate of
7651	7651	incorporation:
7652	7652	(1) the board of directors of a nonmembership nonprofit
7653	7653	corporation may adopt amendments to the nonmembership
7654	7654	nonprofit corporation's certificate of incorporation; and
7655	7655	(2) an amendment adopted by the board of directors
7656	7656	under this section must also be approved by that person or
7657	7657	group of persons, if any, whose approval is required by the
7658	7658	certificate of incorporation in accordance with Section
7659	7659	10A-3A-9.30.
7660	7660	§10A-3A-9.06. Certificate of amendment.
7661	7661	(a) After an amendment to the certificate of
7662	7662	incorporation has been adopted and approved in the manner
7663	7663	required by this chapter, the certificate of incorporation,
7664	7664	and bylaws, the nonprofit corporation must deliver to the
7665	7665	Secretary of State, for filing, a certificate of amendment,
7666	7666	which must set forth:
7667	7667	(1) the name of the nonprofit corporation;
7668	7668	(2) the text of each amendment adopted or the
7669	7669	information required by Section 10A-3A-1.04(c)(5);
7670	7670	(3) if an amendment provides for an exchange,
7671	7671	reclassification, or cancellation of memberships, provisions
7672	7672	for implementing the amendment if not contained in the
7673	7673	amendment itself (which may be made dependent upon facts
7674	7674	objectively ascertainable outside the articles of amendment in
7675	7675	3753
7676	7676	3754
7677	7677	3755
7678	7678	3756
7679	7679	3757
7680	7680	3758
7681	7681	3759
7682	7682	3760
7683	7683	3761
7684	7684	3762
7685	7685	3763
7686	7686	3764
7687	7687	3765
7688	7688	3766
7689	7689	3767
7690	7690	3768
7691	7691	3769
7692	7692	3770
7693	7693	3771
7694	7694	3772
7695	7695	3773
7696	7696	3774
7697	7697	3775
7698	7698	3776
7699	7699	3777
7700	7700	3778
7701	7701	3779
7702	7702	3780 SB245 INTRODUCEDSB245 INTRODUCED
7703	7703	Page 136
7704	7704	accordance with Section 10A-3A-1.04(c)(5));
7705	7705	(4) the date of each amendment's adoption;
7706	7706	(5) a statement that the amendment was adopted:
7707	7707	(i) in accordance with Sections 10A-3A-9.02, if the
7708	7708	nonprofit corporation is a membership nonprofit corporation
7709	7709	which has not yet admitted one or more members;
7710	7710	(ii) in accordance with Sections 10A-3A-9.03 and
7711	7711	10A-3A-9.04, if the nonprofit corporation is a membership
7712	7712	nonprofit corporation which has admitted one of more members;
7713	7713	(iii) in accordance with Section 10A-3A-9.05, if the
7714	7714	nonprofit corporation is a nonmembership nonprofit
7715	7715	corporation; or
7716	7716	(iv) in accordance with Section 10A-3A-1.04(c)(5);
7717	7717	(6) a statement that the amendment was adopted in
7718	7718	accordance with Section 10A-9A-9.30, if applicable; and
7719	7719	(7) the unique identifying number or other designation
7720	7720	as assigned by the Secretary of State.
7721	7721	(b) A certificate of amendment shall take effect at the
7722	7722	effective date and time determined in accordance with Article
7723	7723	4 of Chapter 1.
7724	7724	§10A-3A-9.07. Restated certificate of incorporation.
7725	7725	(a) A membership nonprofit corporation's board of
7726	7726	directors may restate its certificate of incorporation at any
7727	7727	time, without member approval, to consolidate all amendments
7728	7728	into a single document. A nonmembership nonprofit
7729	7729	corporation's board of directors may restate its certificate
7730	7730	of incorporation at any time to consolidate all amendments
7731	7731	into a single document.
7732	7732	3781
7733	7733	3782
7734	7734	3783
7735	7735	3784
7736	7736	3785
7737	7737	3786
7738	7738	3787
7739	7739	3788
7740	7740	3789
7741	7741	3790
7742	7742	3791
7743	7743	3792
7744	7744	3793
7745	7745	3794
7746	7746	3795
7747	7747	3796
7748	7748	3797
7749	7749	3798
7750	7750	3799
7751	7751	3800
7752	7752	3801
7753	7753	3802
7754	7754	3803
7755	7755	3804
7756	7756	3805
7757	7757	3806
7758	7758	3807
7759	7759	3808 SB245 INTRODUCEDSB245 INTRODUCED
7760	7760	Page 137
7761	7761	(b) If the restated certificate of incorporation
7762	7762	includes one or more new amendments, the amendments must be
7763	7763	adopted and approved as provided in (i) Sections 10A-3A-9.03
7764	7764	and 10A-3A-9.04 or (ii) Section 10A-3A-9.05.
7765	7765	(c) A nonprofit corporation that restates its
7766	7766	certificate of incorporation shall deliver to the Secretary of
7767	7767	State for filing a certificate of restatement setting forth:
7768	7768	(1) the name of the nonprofit corporation;
7769	7769	(2) the text of the restated certificate of
7770	7770	incorporation;
7771	7771	(3) a statement that the restated certificate of
7772	7772	incorporation consolidates all amendments into a single
7773	7773	document;
7774	7774	(4) if a new amendment is included in the restated
7775	7775	certificate of incorporation, the statements required under
7776	7776	Section 10A-3A-9.06 with respect to the new amendment; and
7777	7777	(5) the unique identifying number or other designation
7778	7778	as assigned by the Secretary of State.
7779	7779	(d) The duly adopted restated certificate of
7780	7780	incorporation supersedes the original certificate of
7781	7781	incorporation and all amendments to the certificate of
7782	7782	incorporation.
7783	7783	§10A-3A-9.08. Amendment pursuant to reorganization.
7784	7784	(a) A nonprofit corporation's certificate of
7785	7785	incorporation may be amended without action by the board of
7786	7786	directors, the members, if any, or a person or group of
7787	7787	persons, if any, whose approval is required by the certificate
7788	7788	of incorporation in accordance with Section 10A-3A-9.30, to
7789	7789	3809
7790	7790	3810
7791	7791	3811
7792	7792	3812
7793	7793	3813
7794	7794	3814
7795	7795	3815
7796	7796	3816
7797	7797	3817
7798	7798	3818
7799	7799	3819
7800	7800	3820
7801	7801	3821
7802	7802	3822
7803	7803	3823
7804	7804	3824
7805	7805	3825
7806	7806	3826
7807	7807	3827
7808	7808	3828
7809	7809	3829
7810	7810	3830
7811	7811	3831
7812	7812	3832
7813	7813	3833
7814	7814	3834
7815	7815	3835
7816	7816	3836 SB245 INTRODUCEDSB245 INTRODUCED
7817	7817	Page 138
7818	7818	carry out a plan of reorganization ordered or decreed by a
7819	7819	court of competent jurisdiction under the authority of a law
7820	7820	of the United States if the certificate of incorporation after
7821	7821	the amendment only contains provisions required or permitted
7822	7822	by Section 10A-3A-2.02.
7823	7823	(b) The individual or individuals designated by the
7824	7824	court shall deliver to the Secretary of State for filing a
7825	7825	certificate of amendment setting forth:
7826	7826	(1) the name of the nonprofit corporation;
7827	7827	(2) the text of each amendment approved by the court;
7828	7828	(3) the date of the court's order or decree approving
7829	7829	the certificate of amendment;
7830	7830	(4) the title of the reorganization proceeding in which
7831	7831	the order or decree was entered;
7832	7832	(5) a statement that the court had jurisdiction of the
7833	7833	proceeding under federal statute; and
7834	7834	(6) the unique identifying number or other designation
7835	7835	as assigned by the Secretary of State.
7836	7836	(c) This section does not apply after entry of a final
7837	7837	decree in the reorganization proceeding even though the court
7838	7838	retains jurisdiction of the proceeding for limited purposes
7839	7839	unrelated to consummation of the reorganization plan.
7840	7840	§10A-3A-9.09. Effect of amendment to certificate of
7841	7841	incorporation.
7842	7842	(a) An amendment to the certificate of incorporation
7843	7843	does not affect:
7844	7844	(1) a cause of action existing against or in favor of
7845	7845	the nonprofit corporation;
7846	7846	3837
7847	7847	3838
7848	7848	3839
7849	7849	3840
7850	7850	3841
7851	7851	3842
7852	7852	3843
7853	7853	3844
7854	7854	3845
7855	7855	3846
7856	7856	3847
7857	7857	3848
7858	7858	3849
7859	7859	3850
7860	7860	3851
7861	7861	3852
7862	7862	3853
7863	7863	3854
7864	7864	3855
7865	7865	3856
7866	7866	3857
7867	7867	3858
7868	7868	3859
7869	7869	3860
7870	7870	3861
7871	7871	3862
7872	7872	3863
7873	7873	3864 SB245 INTRODUCEDSB245 INTRODUCED
7874	7874	Page 139
7875	7875	(2) a proceeding to which the nonprofit corporation is
7876	7876	a party; or
7877	7877	(3) the existing rights of persons other than (i)
7878	7878	members of the nonprofit corporation, if any, or (ii) a person
7879	7879	or group of persons, if any, specified in the certificate of
7880	7880	incorporation as having approval rights under Section
7881	7881	10A-3A-9.30.
7882	7882	(b) An amendment changing a nonprofit corporation's
7883	7883	name does not affect a proceeding brought by or against the
7884	7884	nonprofit corporation in its former name.
7885	7885	§10A-3A-9.10. Effect of restatement of certificate of
7886	7886	incorporation.
7887	7887	(a) A restated certificate of incorporation takes
7888	7888	effect when the filing of the restated certificate of
7889	7889	incorporation takes effect as provided by Article 4 of Chapter
7890	7890	1.
7891	7891	(b) On the date and time the restated certificate of
7892	7892	incorporation takes effect, the original certificate of
7893	7893	incorporation and each prior amendment or restatement of the
7894	7894	certificate of incorporation is superseded and the restated
7895	7895	certificate of incorporation is the effective certificate of
7896	7896	incorporation.
7897	7897	(c) Section 10A-3A-9.09 applies to an amendment
7898	7898	effected by a restated certificate of incorporation.
7899	7899	DIVISION B. AMENDMENT OF BYLAWS.
7900	7900	§10A-3A-9.20. Authority to amend.
7901	7901	(a) The members of a membership nonprofit corporation
7902	7902	may amend or repeal the membership nonprofit corporation's
7903	7903	3865
7904	7904	3866
7905	7905	3867
7906	7906	3868
7907	7907	3869
7908	7908	3870
7909	7909	3871
7910	7910	3872
7911	7911	3873
7912	7912	3874
7913	7913	3875
7914	7914	3876
7915	7915	3877
7916	7916	3878
7917	7917	3879
7918	7918	3880
7919	7919	3881
7920	7920	3882
7921	7921	3883
7922	7922	3884
7923	7923	3885
7924	7924	3886
7925	7925	3887
7926	7926	3888
7927	7927	3889
7928	7928	3890
7929	7929	3891
7930	7930	3892 SB245 INTRODUCEDSB245 INTRODUCED
7931	7931	Page 140
7932	7932	bylaws except as provided in the certificate of incorporation
7933	7933	or bylaws.
7934	7934	(b) The board of directors of a membership nonprofit
7935	7935	corporation or nonmembership nonprofit corporation may amend
7936	7936	or repeal the nonprofit corporation's bylaws, except as
7937	7937	provided in the certificate of incorporation, bylaws, Section
7938	7938	10A-3A-9.21, or Section 10A-3A-9.22.
7939	7939	(c) Neither (i) a member of a membership nonprofit
7940	7940	corporation nor (ii) a person or group of persons having
7941	7941	rights under the certificate of incorporation, has a vested
7942	7942	property right resulting from any provision in the bylaws,
7943	7943	including provisions relating to management, control, or
7944	7944	purpose of the nonprofit corporation.
7945	7945	§10A-3A-9.21. Bylaw increasing quorum or voting
7946	7946	requirement for directors or requiring a meeting place in a
7947	7947	membership nonprofit corporation.
7948	7948	In a membership nonprofit corporation:
7949	7949	(a) A bylaw that increases a quorum or voting
7950	7950	requirement for the board of directors or that requires a
7951	7951	meeting of the members to be held at a place may be amended or
7952	7952	repealed:
7953	7953	(1) if originally adopted by the members, only by the
7954	7954	members, unless the bylaw otherwise provides;
7955	7955	(2) if adopted by the board of directors, either by the
7956	7956	members or the board of directors.
7957	7957	(b) A bylaw adopted or amended by the members that
7958	7958	increases a quorum or voting requirement for the board of
7959	7959	directors may provide that it can be amended or repealed only
7960	7960	3893
7961	7961	3894
7962	7962	3895
7963	7963	3896
7964	7964	3897
7965	7965	3898
7966	7966	3899
7967	7967	3900
7968	7968	3901
7969	7969	3902
7970	7970	3903
7971	7971	3904
7972	7972	3905
7973	7973	3906
7974	7974	3907
7975	7975	3908
7976	7976	3909
7977	7977	3910
7978	7978	3911
7979	7979	3912
7980	7980	3913
7981	7981	3914
7982	7982	3915
7983	7983	3916
7984	7984	3917
7985	7985	3918
7986	7986	3919
7987	7987	3920 SB245 INTRODUCEDSB245 INTRODUCED
7988	7988	Page 141
7989	7989	by a specified vote of either the members or the board of
7990	7990	directors.
7991	7991	(c) Action by the board of directors under subsection
7992	7992	(a) to amend or repeal a bylaw that changes a quorum or voting
7993	7993	requirement for the board of directors shall meet the same
7994	7994	quorum requirement and be adopted by the same vote required to
7995	7995	take action under the quorum.
7996	7996	§10A-3A-9.22. Bylaw amendments requiring member
7997	7997	approval.
7998	7998	In a membership nonprofit corporation, except as
7999	7999	provided in the certificate of incorporation or bylaws:
8000	8000	(a) The board of directors of a membership nonprofit
8001	8001	corporation that has one or more members at the time may not
8002	8002	adopt or amend a bylaw under:
8003	8003	(1) Section 10A-3A-6.10 providing that some of the
8004	8004	members shall have different rights or obligations than other
8005	8005	members with respect to voting, dissolution, transfer of
8006	8006	memberships, or other matters;
8007	8007	(2) Section 10A-3A-6.13 levying dues, assessments, or
8008	8008	fees on some or all of the members;
8009	8009	(3) Section 10A-3A-6.21 relating to the termination or
8010	8010	suspension of members;
8011	8011	(4) Section 10A-3A-8.08(a):
8012	8012	(i) requiring cause to remove a director; or
8013	8013	(ii) specifying what constitutes cause to remove a
8014	8014	director; or
8015	8015	(5) Section 10A-3A-8.08(e) relating to the removal of a
8016	8016	director who is designated in a manner other than election or
8017	8017	3921
8018	8018	3922
8019	8019	3923
8020	8020	3924
8021	8021	3925
8022	8022	3926
8023	8023	3927
8024	8024	3928
8025	8025	3929
8026	8026	3930
8027	8027	3931
8028	8028	3932
8029	8029	3933
8030	8030	3934
8031	8031	3935
8032	8032	3936
8033	8033	3937
8034	8034	3938
8035	8035	3939
8036	8036	3940
8037	8037	3941
8038	8038	3942
8039	8039	3943
8040	8040	3944
8041	8041	3945
8042	8042	3946
8043	8043	3947
8044	8044	3948 SB245 INTRODUCEDSB245 INTRODUCED
8045	8045	Page 142
8046	8046	appointment.
8047	8047	(b) The board of directors of a membership nonprofit
8048	8048	corporation may not amend the certificate of incorporation or
8049	8049	bylaws to vary the application of subsection (a) to the
8050	8050	membership nonprofit corporation.
8051	8051	(c) If a membership nonprofit corporation has more than
8052	8052	one class of members, the members of a class are entitled to
8053	8053	vote as a separate voting group on an amendment to the bylaws
8054	8054	that:
8055	8055	(1) is described in subsection (a) if the amendment
8056	8056	would affect the members of that class differently than the
8057	8057	members of another class; or
8058	8058	(2) has any of the effects described in Section
8059	8059	10A-3A-9.04.
8060	8060	(d) If a class of members will be divided into two or
8061	8061	more classes by an amendment to the bylaws, the amendment must
8062	8062	be approved by a majority of the members of each class that
8063	8063	will be created.
8064	8064	DIVISION C. SPECIAL RIGHTS.
8065	8065	§10A-3A-9.30. Approval by specified person or group of
8066	8066	persons.
8067	8067	(a) The certificate of incorporation of a membership
8068	8068	nonprofit corporation may require that an amendment to the
8069	8069	certificate of incorporation, including amendments under
8070	8070	Section 10A-3A-9.03(g), be approved in writing by a specified
8071	8071	person or group of persons in addition to the board of
8072	8072	directors and members. The certificate of incorporation of a
8073	8073	nonmembership nonprofit corporation may require that an
8074	8074	3949
8075	8075	3950
8076	8076	3951
8077	8077	3952
8078	8078	3953
8079	8079	3954
8080	8080	3955
8081	8081	3956
8082	8082	3957
8083	8083	3958
8084	8084	3959
8085	8085	3960
8086	8086	3961
8087	8087	3962
8088	8088	3963
8089	8089	3964
8090	8090	3965
8091	8091	3966
8092	8092	3967
8093	8093	3968
8094	8094	3969
8095	8095	3970
8096	8096	3971
8097	8097	3972
8098	8098	3973
8099	8099	3974
8100	8100	3975
8101	8101	3976 SB245 INTRODUCEDSB245 INTRODUCED
8102	8102	Page 143
8103	8103	amendment to the certificate of incorporation be approved in
8104	8104	writing by a specified person or group of persons in addition
8105	8105	to the board of directors.
8106	8106	(b) The certificate of incorporation or bylaws of a
8107	8107	membership nonprofit corporation may require that an amendment
8108	8108	to the bylaws be approved in writing by a specified person or
8109	8109	group of persons in addition to the board of directors and
8110	8110	members. The certificate of incorporation or bylaws of a
8111	8111	nonmembership nonprofit corporation may require that an
8112	8112	amendment to the bylaws be approved in writing by a specified
8113	8113	person or group of persons in addition to the board of
8114	8114	directors.
8115	8115	(c) A requirement in the certificate of incorporation
8116	8116	or bylaws described in Section 10A-3A-9.30(a) or (b) may only
8117	8117	be amended with the approval in writing of the specified
8118	8118	person or group of persons.
8119	8119	ARTICLE 10. DISPOSITION OF ASSETS.
8120	8120	§10A-3A-10.01. Disposition of assets not requiring
8121	8121	member approval in membership nonprofit corporation.
8122	8122	In a membership nonprofit corporation, no approval of
8123	8123	the members is required, unless the certificate of
8124	8124	incorporation otherwise provides:
8125	8125	(a) to sell, lease, exchange, or otherwise dispose of
8126	8126	any or all of the membership nonprofit corporation's assets in
8127	8127	the usual and regular course of the membership nonprofit
8128	8128	corporation's activities;
8129	8129	(b) to mortgage, pledge, dedicate to the repayment of
8130	8130	indebtedness (whether with or without recourse), or otherwise
8131	8131	3977
8132	8132	3978
8133	8133	3979
8134	8134	3980
8135	8135	3981
8136	8136	3982
8137	8137	3983
8138	8138	3984
8139	8139	3985
8140	8140	3986
8141	8141	3987
8142	8142	3988
8143	8143	3989
8144	8144	3990
8145	8145	3991
8146	8146	3992
8147	8147	3993
8148	8148	3994
8149	8149	3995
8150	8150	3996
8151	8151	3997
8152	8152	3998
8153	8153	3999
8154	8154	4000
8155	8155	4001
8156	8156	4002
8157	8157	4003
8158	8158	4004 SB245 INTRODUCEDSB245 INTRODUCED
8159	8159	Page 144
8160	8160	encumber any or all of the membership nonprofit corporation's
8161	8161	assets, regardless of whether in the usual and regular course
8162	8162	of its activities; or
8163	8163	(c) to transfer any or all of the membership nonprofit
8164	8164	corporation's assets to one or more corporations or other
8165	8165	entities all of the memberships or interests of which are
8166	8166	owned by the membership nonprofit corporation.
8167	8167	§10A-3A-10.02. Member approval of certain dispositions
8168	8168	in membership nonprofit corporation.
8169	8169	(a) A sale, lease, exchange, or other disposition of
8170	8170	assets, other than a disposition described in Section
8171	8171	10A-3A-10.01, requires approval of the membership nonprofit
8172	8172	corporation's members if the disposition would leave the
8173	8173	membership nonprofit corporation without a significant
8174	8174	continuing activity. A membership nonprofit corporation will
8175	8175	conclusively be deemed to have retained a significant
8176	8176	continuing activity if it retains an activity that
8177	8177	represented, for the membership nonprofit corporation and its
8178	8178	subsidiaries on a consolidated basis, at least (i) 25 percent
8179	8179	of total assets at the end of the most recently completed
8180	8180	fiscal year, and (ii) either 25 percent of either income from
8181	8181	continuing operations before taxes or 25 percent of revenues
8182	8182	from continuing operations, in each case for the most recently
8183	8183	completed fiscal year.
8184	8184	(b) To obtain the approval of the members under
8185	8185	subsection (a) the board of directors shall first adopt a
8186	8186	resolution authorizing the disposition. The disposition shall
8187	8187	then be approved by the members. In submitting the disposition
8188	8188	4005
8189	8189	4006
8190	8190	4007
8191	8191	4008
8192	8192	4009
8193	8193	4010
8194	8194	4011
8195	8195	4012
8196	8196	4013
8197	8197	4014
8198	8198	4015
8199	8199	4016
8200	8200	4017
8201	8201	4018
8202	8202	4019
8203	8203	4020
8204	8204	4021
8205	8205	4022
8206	8206	4023
8207	8207	4024
8208	8208	4025
8209	8209	4026
8210	8210	4027
8211	8211	4028
8212	8212	4029
8213	8213	4030
8214	8214	4031
8215	8215	4032 SB245 INTRODUCEDSB245 INTRODUCED
8216	8216	Page 145
8217	8217	to the members for approval, the board of directors shall
8218	8218	recommend that the members approve the disposition, unless the
8219	8219	board of directors makes a determination that because of
8220	8220	conflicts of interest or other special circumstances it should
8221	8221	not make a recommendation, in which case the board of
8222	8222	directors must inform the members of the basis for that
8223	8223	determination.
8224	8224	(c) The board of directors may set conditions for the
8225	8225	approval by the members of a disposition or the effectiveness
8226	8226	of the disposition.
8227	8227	(d) If a disposition is required to be approved by the
8228	8228	members under subsection (a), and if the approval is to be
8229	8229	given at a meeting, the membership nonprofit corporation shall
8230	8230	notify each member entitled to vote on the matter of the
8231	8231	meeting of members at which the disposition is to be submitted
8232	8232	for approval. The notice must state that the purpose, or one
8233	8233	of the purposes, of the meeting is to consider the disposition
8234	8234	and must contain a description of the disposition, including
8235	8235	the terms and conditions of the disposition and the
8236	8236	consideration to be received by the membership nonprofit
8237	8237	corporation.
8238	8238	(e) Unless the certificate of incorporation, bylaws, or
8239	8239	the board of directors acting pursuant to subsection (c)
8240	8240	requires a greater vote or a greater quorum, the approval of a
8241	8241	disposition by the members shall require the approval of the
8242	8242	members at a meeting at which a quorum exists consisting of a
8243	8243	majority of the votes entitled to be cast on the disposition.
8244	8244	(f) After a disposition has been approved by the
8245	8245	4033
8246	8246	4034
8247	8247	4035
8248	8248	4036
8249	8249	4037
8250	8250	4038
8251	8251	4039
8252	8252	4040
8253	8253	4041
8254	8254	4042
8255	8255	4043
8256	8256	4044
8257	8257	4045
8258	8258	4046
8259	8259	4047
8260	8260	4048
8261	8261	4049
8262	8262	4050
8263	8263	4051
8264	8264	4052
8265	8265	4053
8266	8266	4054
8267	8267	4055
8268	8268	4056
8269	8269	4057
8270	8270	4058
8271	8271	4059
8272	8272	4060 SB245 INTRODUCEDSB245 INTRODUCED
8273	8273	Page 146
8274	8274	members under this Article 10, and at any time before the
8275	8275	disposition has been consummated, it may be abandoned by the
8276	8276	membership nonprofit corporation without action by the
8277	8277	members, subject to any contractual rights of other parties to
8278	8278	the disposition.
8279	8279	(g) A disposition of assets in the course of
8280	8280	dissolution under Article 11 is not governed by this section.
8281	8281	(h) For purposes of this section only, the property and
8282	8282	assets of the membership nonprofit corporation include the
8283	8283	property and assets of any subsidiary of the membership
8284	8284	nonprofit corporation. As used in this subsection,
8285	8285	"subsidiary" means any entity wholly owned and controlled,
8286	8286	directly or indirectly, by the membership nonprofit
8287	8287	corporation and includes, without limitation, nonprofit
8288	8288	corporations, business corporations, partnerships (including
8289	8289	limited liability partnerships), limited partnerships
8290	8290	(including limited liability limited partnerships), limited
8291	8291	liability companies, and/or statutory trusts, whether domestic
8292	8292	or foreign.
8293	8293	(i) In addition to the approval of a disposition of
8294	8294	assets by the board of directors and members as required by
8295	8295	this section, the disposition must also be approved in writing
8296	8296	by a person or group of persons whose approval is required
8297	8297	under the certificate of incorporation in accordance with
8298	8298	Section 10A-3A-10.04.
8299	8299	§10A-3A-10.03. Disposition of assets in a nonmembership
8300	8300	nonprofit corporation.
8301	8301	Except as otherwise provided in the certificate of
8302	8302	4061
8303	8303	4062
8304	8304	4063
8305	8305	4064
8306	8306	4065
8307	8307	4066
8308	8308	4067
8309	8309	4068
8310	8310	4069
8311	8311	4070
8312	8312	4071
8313	8313	4072
8314	8314	4073
8315	8315	4074
8316	8316	4075
8317	8317	4076
8318	8318	4077
8319	8319	4078
8320	8320	4079
8321	8321	4080
8322	8322	4081
8323	8323	4082
8324	8324	4083
8325	8325	4084
8326	8326	4085
8327	8327	4086
8328	8328	4087
8329	8329	4088 SB245 INTRODUCEDSB245 INTRODUCED
8330	8330	Page 147
8331	8331	incorporation:
8332	8332	(1) a sale, lease, exchange, mortgage, pledge, or other
8333	8333	disposition of all, or substantially all, the property and
8334	8334	assets of the nonmembership nonprofit corporation may be
8335	8335	approved by the board of directors; and
8336	8336	(2) a sale, lease, exchange, mortgage, pledge, or other
8337	8337	disposition of all, or substantially all, of the property and
8338	8338	assets of the nonmembership nonprofit corporation approved by
8339	8339	the board of directors under this section must also be
8340	8340	approved by that person or group of persons whose approval is
8341	8341	required by the certificate of incorporation in accordance
8342	8342	with Section 10A-3A-10.04.
8343	8343	§10A-3A-10.04. Approval by specified person or group of
8344	8344	persons.
8345	8345	(a) The certificate of incorporation of a membership
8346	8346	nonprofit corporation may require that a disposition of assets
8347	8347	under Section 10A-3A-10.02 be approved in writing by a
8348	8348	specified person or group of persons in addition to the board
8349	8349	of directors and members.
8350	8350	(b) The certificate of incorporation of a nonmembership
8351	8351	nonprofit corporation may require that a disposition of assets
8352	8352	under Section 10A-3A-10.03 be approved in writing by a
8353	8353	specified person or group of persons in addition to the board
8354	8354	of directors.
8355	8355	(c) A requirement in the certificate of incorporation
8356	8356	described in subsection (a) or (b) of this section may only be
8357	8357	approved by the written approval of the specified person or
8358	8358	group of persons.
8359	8359	4089
8360	8360	4090
8361	8361	4091
8362	8362	4092
8363	8363	4093
8364	8364	4094
8365	8365	4095
8366	8366	4096
8367	8367	4097
8368	8368	4098
8369	8369	4099
8370	8370	4100
8371	8371	4101
8372	8372	4102
8373	8373	4103
8374	8374	4104
8375	8375	4105
8376	8376	4106
8377	8377	4107
8378	8378	4108
8379	8379	4109
8380	8380	4110
8381	8381	4111
8382	8382	4112
8383	8383	4113
8384	8384	4114
8385	8385	4115
8386	8386	4116 SB245 INTRODUCEDSB245 INTRODUCED
8387	8387	Page 148
8388	8388	ARTICLE 11. DISSOLUTION.
8389	8389	DIVISION A. VOLUNTARY DISSOLUTION.
8390	8390	§10A-3A-11.01. Dissolution by incorporators or
8391	8391	directors.
8392	8392	A majority of the incorporators or initial directors of
8393	8393	a nonprofit corporation that has not commenced activity may
8394	8394	dissolve the nonprofit corporation by delivering to the
8395	8395	Secretary of State for filing a certificate of dissolution
8396	8396	that sets forth:
8397	8397	(1) the name of the nonprofit corporation;
8398	8398	(2) the date of its incorporation;
8399	8399	(3) that the nonprofit corporation has not commenced
8400	8400	activity;
8401	8401	(4) that no debt of the nonprofit corporation remains
8402	8402	unpaid;
8403	8403	(5) that the net assets of the nonprofit corporation
8404	8404	remaining after winding up have been distributed;
8405	8405	(6) that a majority of the incorporators or directors
8406	8406	authorized the dissolution; and
8407	8407	(7) the unique identifying number or other designation
8408	8408	as assigned by the Secretary of State.
8409	8409	§10A-3A-11.02. Approval of dissolution of membership
8410	8410	nonprofit corporations.
8411	8411	(a) The board of directors of a membership nonprofit
8412	8412	corporation may propose dissolution for submission to the
8413	8413	members by first adopting a resolution authorizing the
8414	8414	dissolution.
8415	8415	(b) For a proposal to dissolve to be adopted, it shall
8416	8416	4117
8417	8417	4118
8418	8418	4119
8419	8419	4120
8420	8420	4121
8421	8421	4122
8422	8422	4123
8423	8423	4124
8424	8424	4125
8425	8425	4126
8426	8426	4127
8427	8427	4128
8428	8428	4129
8429	8429	4130
8430	8430	4131
8431	8431	4132
8432	8432	4133
8433	8433	4134
8434	8434	4135
8435	8435	4136
8436	8436	4137
8437	8437	4138
8438	8438	4139
8439	8439	4140
8440	8440	4141
8441	8441	4142
8442	8442	4143
8443	8443	4144 SB245 INTRODUCEDSB245 INTRODUCED
8444	8444	Page 149
8445	8445	then be approved by the members entitled to vote thereon. In
8446	8446	submitting the proposal to dissolve to the members for
8447	8447	approval, the board of directors shall recommend that the
8448	8448	members approve the dissolution, unless the board of directors
8449	8449	determines that because of conflict of interest or other
8450	8450	special circumstances it should make no recommendation in
8451	8451	which case the board of directors must inform the members of
8452	8452	the basis for that determination.
8453	8453	(c) The board of directors may set conditions for the
8454	8454	approval of the proposal for dissolution by the members or the
8455	8455	effectiveness of the dissolution.
8456	8456	(d) If the approval of the members is to be given at a
8457	8457	meeting, the membership nonprofit corporation shall notify
8458	8458	each member entitled to vote on the dissolution, of the
8459	8459	meeting of members at which the dissolution is to be submitted
8460	8460	for approval. The notice must state that the purpose, or one
8461	8461	of the purposes, of the meeting is to consider dissolving the
8462	8462	membership nonprofit corporation and how the assets of the
8463	8463	membership nonprofit corporation will be distributed after all
8464	8464	creditors have been paid, or how the distribution of assets
8465	8465	will be determined.
8466	8466	(e) Unless the certificate of incorporation, the
8467	8467	bylaws, or the board of directors acting pursuant to
8468	8468	subsection (c), requires a greater vote, a greater quorum, or
8469	8469	a vote by voting groups, adoption of the proposal to dissolve
8470	8470	shall require the approval of the members at a meeting at
8471	8471	which a quorum exists consisting of a majority of the votes
8472	8472	entitled to be cast on the proposal to dissolve.
8473	8473	4145
8474	8474	4146
8475	8475	4147
8476	8476	4148
8477	8477	4149
8478	8478	4150
8479	8479	4151
8480	8480	4152
8481	8481	4153
8482	8482	4154
8483	8483	4155
8484	8484	4156
8485	8485	4157
8486	8486	4158
8487	8487	4159
8488	8488	4160
8489	8489	4161
8490	8490	4162
8491	8491	4163
8492	8492	4164
8493	8493	4165
8494	8494	4166
8495	8495	4167
8496	8496	4168
8497	8497	4169
8498	8498	4170
8499	8499	4171
8500	8500	4172 SB245 INTRODUCEDSB245 INTRODUCED
8501	8501	Page 150
8502	8502	(f) Dissolution of a membership nonprofit corporation
8503	8503	may also be authorized without action of the directors if all
8504	8504	the members entitled to vote thereon shall consent in writing
8505	8505	and a certificate of dissolution shall be delivered to the
8506	8506	Secretary of State for filing pursuant to Section
8507	8507	10A-3A-11.05.
8508	8508	(g) In addition to the approval of the dissolution of a
8509	8509	membership nonprofit corporation as set forth in subsections
8510	8510	(a) through (f), the dissolution must also be approved in
8511	8511	writing by a person or group of persons whose approval is
8512	8512	required under the certificate of incorporation in accordance
8513	8513	with Section 10A-3A-11.04.
8514	8514	§10A-3A-11.03. Approval of dissolution of nonmembership
8515	8515	nonprofit corporations.
8516	8516	Except as otherwise provided in the certificate of
8517	8517	incorporation:
8518	8518	(1) the dissolution of a nonmembership nonprofit
8519	8519	corporation may be approved by the board of directors; and
8520	8520	(2) the dissolution of the nonmembership nonprofit
8521	8521	corporation approved by the board of directors under this
8522	8522	section must also be approved by those persons whose approval
8523	8523	is required by the certificate of incorporation in accordance
8524	8524	with Section 10A-3A-11.04.
8525	8525	§10A-3A-11.04. Approval by specified person or group of
8526	8526	persons.
8527	8527	(a) The certificate of incorporation of a membership
8528	8528	nonprofit corporation may require that a dissolution of a
8529	8529	membership nonprofit corporation under Section 10A-3A-11.02 be
8530	8530	4173
8531	8531	4174
8532	8532	4175
8533	8533	4176
8534	8534	4177
8535	8535	4178
8536	8536	4179
8537	8537	4180
8538	8538	4181
8539	8539	4182
8540	8540	4183
8541	8541	4184
8542	8542	4185
8543	8543	4186
8544	8544	4187
8545	8545	4188
8546	8546	4189
8547	8547	4190
8548	8548	4191
8549	8549	4192
8550	8550	4193
8551	8551	4194
8552	8552	4195
8553	8553	4196
8554	8554	4197
8555	8555	4198
8556	8556	4199
8557	8557	4200 SB245 INTRODUCEDSB245 INTRODUCED
8558	8558	Page 151
8559	8559	approved in writing by a specified person or group of persons
8560	8560	in addition to the board of directors and members.
8561	8561	(b) The certificate of incorporation of a nonmembership
8562	8562	nonprofit corporation may require that a dissolution of a
8563	8563	nonmembership nonprofit corporation under Section 10A-3A-11.03
8564	8564	be approved in writing by a specified person or group of
8565	8565	persons in addition to the board of directors.
8566	8566	(c) A requirement in the certificate of incorporation
8567	8567	described in subsection (a) or (b) of this section may only be
8568	8568	approved by the written approval of the specified person or
8569	8569	group of persons.
8570	8570	§10A-3A-11.05. Certificate of dissolution.
8571	8571	(a) At any time after dissolution is authorized, the
8572	8572	nonprofit corporation may dissolve by delivering to the
8573	8573	Secretary of State for filing a certificate of dissolution
8574	8574	setting forth:
8575	8575	(1) the name of the nonprofit corporation;
8576	8576	(2) the date that dissolution was authorized;
8577	8577	(3) if dissolution of a membership nonprofit
8578	8578	corporation was approved in accordance with Section
8579	8579	10A-3A-11.02, a statement that the proposal to dissolve was
8580	8580	duly approved in the manner required by this chapter and by
8581	8581	the certificate of incorporation;
8582	8582	(4) if dissolution of a nonmembership nonprofit
8583	8583	corporation was approved in accordance with Section
8584	8584	10A-3A-11.03, a statement that the proposal to dissolve was
8585	8585	duly approved in the manner required by this chapter and by
8586	8586	the certificate of incorporation;
8587	8587	4201
8588	8588	4202
8589	8589	4203
8590	8590	4204
8591	8591	4205
8592	8592	4206
8593	8593	4207
8594	8594	4208
8595	8595	4209
8596	8596	4210
8597	8597	4211
8598	8598	4212
8599	8599	4213
8600	8600	4214
8601	8601	4215
8602	8602	4216
8603	8603	4217
8604	8604	4218
8605	8605	4219
8606	8606	4220
8607	8607	4221
8608	8608	4222
8609	8609	4223
8610	8610	4224
8611	8611	4225
8612	8612	4226
8613	8613	4227
8614	8614	4228 SB245 INTRODUCEDSB245 INTRODUCED
8615	8615	Page 152
8616	8616	(5) if dissolution of a nonprofit corporation was
8617	8617	approved in accordance with Section 10A-3A-11.02 or Section
8618	8618	10A-3A-11.03, and the certificate of incorporation required
8619	8619	the dissolution to also be approved by a specified person or
8620	8620	group of persons in accordance with Section 10A-3A-11.04, a
8621	8621	statement that the proposal to dissolve was duly approved by
8622	8622	the manner required by this chapter and by the certificate of
8623	8623	incorporation; and
8624	8624	(6) the unique identifying number or other designation
8625	8625	as assigned by the Secretary of State.
8626	8626	(b) The certificate of dissolution shall take effect at
8627	8627	the effective date determined in accordance with Article 4 of
8628	8628	Chapter 1. A nonprofit corporation is dissolved upon the
8629	8629	effective date of its certificate of dissolution.
8630	8630	(c) For purposes of this Division A of this Article 11,
8631	8631	"dissolved nonprofit corporation" means a nonprofit
8632	8632	corporation whose certificate of dissolution has become
8633	8633	effective and includes a successor entity to which the
8634	8634	remaining assets of the nonprofit corporation are transferred
8635	8635	subject to its liabilities for purposes of liquidation.
8636	8636	§10A-3A-11.06. Revocation of dissolution.
8637	8637	(a) A nonprofit corporation may revoke its dissolution
8638	8638	within 120 days after its effective date and be reinstated.
8639	8639	(b) Revocation of dissolution and reinstatement shall
8640	8640	be authorized in the same manner as the dissolution was
8641	8641	authorized unless that authorization permitted revocation and
8642	8642	reinstatement by action of the board of directors alone, in
8643	8643	which event the board of directors may revoke the dissolution
8644	8644	4229
8645	8645	4230
8646	8646	4231
8647	8647	4232
8648	8648	4233
8649	8649	4234
8650	8650	4235
8651	8651	4236
8652	8652	4237
8653	8653	4238
8654	8654	4239
8655	8655	4240
8656	8656	4241
8657	8657	4242
8658	8658	4243
8659	8659	4244
8660	8660	4245
8661	8661	4246
8662	8662	4247
8663	8663	4248
8664	8664	4249
8665	8665	4250
8666	8666	4251
8667	8667	4252
8668	8668	4253
8669	8669	4254
8670	8670	4255
8671	8671	4256 SB245 INTRODUCEDSB245 INTRODUCED
8672	8672	Page 153
8673	8673	and effect the reinstatement without member action and without
8674	8674	the action of the specified person or group of persons set
8675	8675	forth in the certificate of incorporation in accordance with
8676	8676	Section 10A-3A-11.04.
8677	8677	(c) After the revocation of dissolution and
8678	8678	reinstatement is authorized, the nonprofit corporation may
8679	8679	revoke the dissolution and effect the reinstatement by
8680	8680	delivering to the Secretary of State for filing a certificate
8681	8681	of revocation of dissolution and reinstatement, together with
8682	8682	a copy of its certificate of dissolution, that sets forth:
8683	8683	(1) the name of the nonprofit corporation;
8684	8684	(2) the effective date of the dissolution that was
8685	8685	revoked;
8686	8686	(3) the date that the revocation of dissolution and
8687	8687	reinstatement was authorized;
8688	8688	(4) if the nonprofit corporation's board of directors
8689	8689	(or incorporators) revoked the dissolution and effected the
8690	8690	reinstatement, a statement to that effect;
8691	8691	(5) if the nonprofit corporation's board of directors
8692	8692	revoked a dissolution and effected the reinstatement as
8693	8693	authorized by the members and any specified person or group of
8694	8694	persons set forth in the certificate of incorporation in
8695	8695	accordance with Section 10A-3A-11.04, a statement that
8696	8696	revocation and reinstatement was permitted by action by the
8697	8697	board of directors alone pursuant to that authorization;
8698	8698	(6) if member action was required to revoke the
8699	8699	dissolution and effect the reinstatement, a statement that the
8700	8700	revocation and reinstatement was duly approved by the members
8701	8701	4257
8702	8702	4258
8703	8703	4259
8704	8704	4260
8705	8705	4261
8706	8706	4262
8707	8707	4263
8708	8708	4264
8709	8709	4265
8710	8710	4266
8711	8711	4267
8712	8712	4268
8713	8713	4269
8714	8714	4270
8715	8715	4271
8716	8716	4272
8717	8717	4273
8718	8718	4274
8719	8719	4275
8720	8720	4276
8721	8721	4277
8722	8722	4278
8723	8723	4279
8724	8724	4280
8725	8725	4281
8726	8726	4282
8727	8727	4283
8728	8728	4284 SB245 INTRODUCEDSB245 INTRODUCED
8729	8729	Page 154
8730	8730	in the manner required by this chapter and by the certificate
8731	8731	of incorporation;
8732	8732	(7) if the action of a specified person or group of
8733	8733	persons set forth in the certificate of incorporation in
8734	8734	accordance with Section 10A-3A-11.04 was required to revoke
8735	8735	the dissolution and effect the reinstatement, a statement that
8736	8736	the revocation and reinstatement was duly approved by that
8737	8737	specified person or group of persons in the manner required by
8738	8738	this chapter and by the certificate of incorporation; and
8739	8739	(8) the unique identifying number or other designation
8740	8740	as assigned by the Secretary of State.
8741	8741	(d) The certificate of revocation of dissolution and
8742	8742	reinstatement shall take effect at the effective date
8743	8743	determined in accordance with Article 4 of Chapter 1.
8744	8744	Revocation of dissolution and reinstatement is effective upon
8745	8745	the effective date of the certificate of revocation of
8746	8746	dissolution and reinstatement.
8747	8747	(e)(1) Subject to subsection (e)(2), upon revocation
8748	8748	and reinstatement, the nonprofit corporation shall be deemed
8749	8749	for all purposes to have continued its activities and affairs
8750	8750	as if dissolution had never occurred; and each right inuring
8751	8751	to, and each debt, obligation, and liability incurred by, the
8752	8752	nonprofit corporation after the dissolution shall be
8753	8753	determined as if the dissolution had never occurred.
8754	8754	(2) The rights of persons acting in reliance on the
8755	8755	dissolution before those persons had notice of the revocation
8756	8756	and reinstatement shall not be adversely affected by the
8757	8757	revocation and reinstatement.
8758	8758	4285
8759	8759	4286
8760	8760	4287
8761	8761	4288
8762	8762	4289
8763	8763	4290
8764	8764	4291
8765	8765	4292
8766	8766	4293
8767	8767	4294
8768	8768	4295
8769	8769	4296
8770	8770	4297
8771	8771	4298
8772	8772	4299
8773	8773	4300
8774	8774	4301
8775	8775	4302
8776	8776	4303
8777	8777	4304
8778	8778	4305
8779	8779	4306
8780	8780	4307
8781	8781	4308
8782	8782	4309
8783	8783	4310
8784	8784	4311
8785	8785	4312 SB245 INTRODUCEDSB245 INTRODUCED
8786	8786	Page 155
8787	8787	(f) If the nonprofit corporation is listed in the
8788	8788	Secretary of State's records as a nonprofit corporation that
8789	8789	has been dissolved, then the name of the nonprofit corporation
8790	8790	following revocation and reinstatement shall be that nonprofit
8791	8791	corporation name at the time of revocation and reinstatement
8792	8792	if that nonprofit corporation name complies with Article 5 of
8793	8793	Chapter 1 at the time of revocation and reinstatement. If that
8794	8794	nonprofit corporation name does not comply with Article 5 of
8795	8795	Chapter 1, the name of the nonprofit corporation following
8796	8796	revocation and reinstatement shall be that nonprofit
8797	8797	corporation name followed by the word "reinstated."
8798	8798	§10A-3A-11.07. Effect of dissolution.
8799	8799	(a) A dissolved nonprofit corporation continues its
8800	8800	existence as a nonprofit corporation but may not carry on any
8801	8801	activity except as is appropriate to wind up and liquidate its
8802	8802	activities and affairs, including:
8803	8803	(1) collecting its assets;
8804	8804	(2) disposing of its properties that will not be
8805	8805	distributed in kind;
8806	8806	(3) discharging or making provisions for discharging
8807	8807	its liabilities;
8808	8808	(4) distributing its remaining property among as
8809	8809	required by law, its certificate of incorporation, bylaws, and
8810	8810	as approved when the dissolution was authorized; and
8811	8811	(5) doing every other act necessary to wind up and
8812	8812	liquidate its activities and affairs.
8813	8813	(b) In winding up its activities and affairs, a
8814	8814	dissolved nonprofit corporation may:
8815	8815	4313
8816	8816	4314
8817	8817	4315
8818	8818	4316
8819	8819	4317
8820	8820	4318
8821	8821	4319
8822	8822	4320
8823	8823	4321
8824	8824	4322
8825	8825	4323
8826	8826	4324
8827	8827	4325
8828	8828	4326
8829	8829	4327
8830	8830	4328
8831	8831	4329
8832	8832	4330
8833	8833	4331
8834	8834	4332
8835	8835	4333
8836	8836	4334
8837	8837	4335
8838	8838	4336
8839	8839	4337
8840	8840	4338
8841	8841	4339
8842	8842	4340 SB245 INTRODUCEDSB245 INTRODUCED
8843	8843	Page 156
8844	8844	(1) preserve the nonprofit corporation's activities and
8845	8845	affairs and property as a going concern for a reasonable time;
8846	8846	(2) prosecute, defend, or settle actions or proceedings
8847	8847	whether civil, criminal, or administrative;
8848	8848	(3) transfer the nonprofit corporation's assets;
8849	8849	(4) resolve disputes by mediation or arbitration; and
8850	8850	(5) merge or convert in accordance with Article 12 or
8851	8851	13 of this chapter or Article 8 of Chapter 1.
8852	8852	(c) Dissolution of a nonprofit corporation does not:
8853	8853	(1) transfer title to the nonprofit corporation's
8854	8854	property;
8855	8855	(2) subject its directors or officers to standards of
8856	8856	conduct different from those prescribed in Article 8;
8857	8857	(3) change:
8858	8858	(i) quorum or voting requirements for its board of
8859	8859	directors or members;
8860	8860	(ii) provisions for selection, resignation, or removal
8861	8861	of its directors or officers or both; or
8862	8862	(iii) provisions for amending its bylaws;
8863	8863	(4) prevent commencement of a proceeding by or against
8864	8864	the nonprofit corporation in its corporate name;
8865	8865	(5) abate or suspend a proceeding pending by or against
8866	8866	the nonprofit corporation on the effective date of
8867	8867	dissolution; or
8868	8868	(6) terminate the authority of the registered agent of
8869	8869	the nonprofit corporation.
8870	8870	(d) A distribution in liquidation under this section
8871	8871	may only be made by a dissolved nonprofit corporation.
8872	8872	4341
8873	8873	4342
8874	8874	4343
8875	8875	4344
8876	8876	4345
8877	8877	4346
8878	8878	4347
8879	8879	4348
8880	8880	4349
8881	8881	4350
8882	8882	4351
8883	8883	4352
8884	8884	4353
8885	8885	4354
8886	8886	4355
8887	8887	4356
8888	8888	4357
8889	8889	4358
8890	8890	4359
8891	8891	4360
8892	8892	4361
8893	8893	4362
8894	8894	4363
8895	8895	4364
8896	8896	4365
8897	8897	4366
8898	8898	4367
8899	8899	4368 SB245 INTRODUCEDSB245 INTRODUCED
8900	8900	Page 157
8901	8901	§10A-3A-11.08. Known claims against dissolved nonprofit
8902	8902	corporation.
8903	8903	(a) A dissolved nonprofit corporation may dispose of
8904	8904	any known claims against it by following the procedures
8905	8905	described in subsection (b) at any time after the effective
8906	8906	date of the dissolution of the nonprofit corporation.
8907	8907	(b) A dissolved nonprofit corporation may give written
8908	8908	notice of the dissolution to the holder of any known claim.
8909	8909	The notice must:
8910	8910	(1) identify the dissolved nonprofit corporation;
8911	8911	(2) describe the information required to be included in
8912	8912	a claim;
8913	8913	(3) provide a mailing address to which the claim is to
8914	8914	be sent;
8915	8915	(4) state the deadline, which may not be fewer than 120
8916	8916	days from the effective date of the notice, by which the
8917	8917	dissolved nonprofit corporation must receive the claim; and
8918	8918	(5) state that if not sooner barred, the claim will be
8919	8919	barred if not received by the deadline.
8920	8920	(c) Unless sooner barred by any other statute limiting
8921	8921	actions, a claim against a dissolved nonprofit corporation is
8922	8922	barred:
8923	8923	(1) if a claimant who was given notice under subsection
8924	8924	(b) does not deliver the claim to the dissolved nonprofit
8925	8925	corporation by the deadline; or
8926	8926	(2) if a claimant whose claim was rejected by the
8927	8927	dissolved nonprofit corporation does not commence a proceeding
8928	8928	to enforce the claim within 90 days from the effective date of
8929	8929	4369
8930	8930	4370
8931	8931	4371
8932	8932	4372
8933	8933	4373
8934	8934	4374
8935	8935	4375
8936	8936	4376
8937	8937	4377
8938	8938	4378
8939	8939	4379
8940	8940	4380
8941	8941	4381
8942	8942	4382
8943	8943	4383
8944	8944	4384
8945	8945	4385
8946	8946	4386
8947	8947	4387
8948	8948	4388
8949	8949	4389
8950	8950	4390
8951	8951	4391
8952	8952	4392
8953	8953	4393
8954	8954	4394
8955	8955	4395
8956	8956	4396 SB245 INTRODUCEDSB245 INTRODUCED
8957	8957	Page 158
8958	8958	the rejection notice.
8959	8959	(d) For purposes of this section, "known claim" or
8960	8960	"claim" includes unliquidated claims, but does not include a
8961	8961	contingent liability that has not matured so that there is no
8962	8962	immediate right to bring suit or a claim based on an event
8963	8963	occurring after the effective date of dissolution.
8964	8964	(e) Nothing in this section shall be deemed to extend
8965	8965	any otherwise applicable statute of limitations.
8966	8966	§10A-3A-11.09. Other claims against dissolved nonprofit
8967	8967	corporation.
8968	8968	(a) A dissolved nonprofit corporation may publish
8969	8969	notice of its dissolution and request that persons with claims
8970	8970	against the dissolved nonprofit corporation present them in
8971	8971	accordance with the notice.
8972	8972	(b) The notice authorized by subsection (a) must:
8973	8973	(1) be published at least one time in a newspaper of
8974	8974	general circulation in the county in which the dissolved
8975	8975	nonprofit corporation's principal office is located or, if it
8976	8976	has none in this state, in the county in which the nonprofit
8977	8977	corporation's most recent registered office is located;
8978	8978	(2) describe the information that must be included in a
8979	8979	claim and provide a mailing address to which the claim is to
8980	8980	be sent; and
8981	8981	(3) state that if not sooner barred, a claim against
8982	8982	the dissolved nonprofit corporation will be barred unless a
8983	8983	proceeding to enforce the claim is commenced within two years
8984	8984	after the publication of the notice.
8985	8985	(c) If a dissolved nonprofit corporation publishes a
8986	8986	4397
8987	8987	4398
8988	8988	4399
8989	8989	4400
8990	8990	4401
8991	8991	4402
8992	8992	4403
8993	8993	4404
8994	8994	4405
8995	8995	4406
8996	8996	4407
8997	8997	4408
8998	8998	4409
8999	8999	4410
9000	9000	4411
9001	9001	4412
9002	9002	4413
9003	9003	4414
9004	9004	4415
9005	9005	4416
9006	9006	4417
9007	9007	4418
9008	9008	4419
9009	9009	4420
9010	9010	4421
9011	9011	4422
9012	9012	4423
9013	9013	4424 SB245 INTRODUCEDSB245 INTRODUCED
9014	9014	Page 159
9015	9015	newspaper notice in accordance with subsection (b), unless
9016	9016	sooner barred by any other statute limiting actions, the claim
9017	9017	of each of the following claimants is barred unless the
9018	9018	claimant commences a proceeding to enforce the claim against
9019	9019	the dissolved nonprofit corporation within two years after the
9020	9020	publication date of the newspaper notice:
9021	9021	(1) a claimant who was not given notice under Section
9022	9022	10A-3A-11.08;
9023	9023	(2) a claimant whose claim was timely sent to the
9024	9024	dissolved nonprofit corporation but not acted on by the
9025	9025	dissolved nonprofit corporation; and
9026	9026	(3) a claimant whose claim is contingent at the
9027	9027	effective date of the dissolution of the nonprofit
9028	9028	corporation, or is based on an event occurring after the
9029	9029	effective date of the dissolution of the nonprofit
9030	9030	corporation.
9031	9031	(d) A claim that is not barred under this section, any
9032	9032	other statute limiting actions, or Section 10A-3A-11.08 may be
9033	9033	enforced:
9034	9034	(1) against a dissolved nonprofit corporation, to the
9035	9035	extent of its undistributed assets; and
9036	9036	(2) except as provided in subsection (h), if the assets
9037	9037	of a dissolved nonprofit corporation have been distributed
9038	9038	after dissolution, against any person, other than a creditor
9039	9039	of the dissolved nonprofit corporation, to whom the nonprofit
9040	9040	corporation distributed its property to the extent of the
9041	9041	distributee's pro rata share of the claim or the corporate
9042	9042	assets distributed to the distributee in liquidation,
9043	9043	4425
9044	9044	4426
9045	9045	4427
9046	9046	4428
9047	9047	4429
9048	9048	4430
9049	9049	4431
9050	9050	4432
9051	9051	4433
9052	9052	4434
9053	9053	4435
9054	9054	4436
9055	9055	4437
9056	9056	4438
9057	9057	4439
9058	9058	4440
9059	9059	4441
9060	9060	4442
9061	9061	4443
9062	9062	4444
9063	9063	4445
9064	9064	4446
9065	9065	4447
9066	9066	4448
9067	9067	4449
9068	9068	4450
9069	9069	4451
9070	9070	4452 SB245 INTRODUCEDSB245 INTRODUCED
9071	9071	Page 160
9072	9072	whichever is less, but a distributee's total liability for all
9073	9073	claims under this section may not exceed the total amount of
9074	9074	assets distributed to the distributee.
9075	9075	(e) A dissolved nonprofit corporation that published a
9076	9076	notice under this section may file an application with the
9077	9077	circuit court for the county in which the dissolved nonprofit
9078	9078	corporation's principal office is located in this state and if
9079	9079	the dissolved nonprofit corporation does not have a principal
9080	9080	office within this state, with the circuit court for the
9081	9081	county in which the dissolved nonprofit corporation's most
9082	9082	recent registered office is located, for a determination of
9083	9083	the amount and form of security to be provided for payment of
9084	9084	claims that are contingent or have not been made known to the
9085	9085	dissolved nonprofit corporation or that are based on an event
9086	9086	occurring after the effective date of the dissolution of the
9087	9087	nonprofit corporation but that, based on the facts known to
9088	9088	the dissolved nonprofit corporation, are reasonably estimated
9089	9089	to arise after the effective date of the dissolution of the
9090	9090	nonprofit corporation. Provision need not be made for any
9091	9091	claim that is or is reasonably anticipated to be barred under
9092	9092	subsection (c).
9093	9093	(f) Within 10 days after the filing of the application
9094	9094	provided for in subsection (e), notice of the proceeding shall
9095	9095	be given by the dissolved nonprofit corporation to each
9096	9096	potential claimant as described in subsection (e).
9097	9097	(g) The circuit court under subsection (e) may appoint
9098	9098	a guardian ad litem to represent all claimants whose
9099	9099	identities are unknown in any proceeding brought under this
9100	9100	4453
9101	9101	4454
9102	9102	4455
9103	9103	4456
9104	9104	4457
9105	9105	4458
9106	9106	4459
9107	9107	4460
9108	9108	4461
9109	9109	4462
9110	9110	4463
9111	9111	4464
9112	9112	4465
9113	9113	4466
9114	9114	4467
9115	9115	4468
9116	9116	4469
9117	9117	4470
9118	9118	4471
9119	9119	4472
9120	9120	4473
9121	9121	4474
9122	9122	4475
9123	9123	4476
9124	9124	4477
9125	9125	4478
9126	9126	4479
9127	9127	4480 SB245 INTRODUCEDSB245 INTRODUCED
9128	9128	Page 161
9129	9129	section. The reasonable fees and expenses of the guardian,
9130	9130	including all reasonable expert witness fees, shall be paid by
9131	9131	the dissolved nonprofit corporation.
9132	9132	(h) Provision by the dissolved nonprofit corporation
9133	9133	for security in the amount and the form ordered by the circuit
9134	9134	court under subsection (e) shall satisfy the dissolved
9135	9135	nonprofit corporation's obligation with respect to claims that
9136	9136	are contingent, have not been made known to the dissolved
9137	9137	nonprofit corporation, or are based on an event occurring
9138	9138	after the effective date of the dissolution of the nonprofit
9139	9139	corporation, and those claims may not be enforced against a
9140	9140	distributee to whom assets have been distributed by the
9141	9141	dissolved nonprofit corporation after the effective date of
9142	9142	the dissolution of the nonprofit corporation.
9143	9143	(i) Nothing in this section shall be deemed to extend
9144	9144	any otherwise applicable statute of limitations.
9145	9145	(j) If a claim has been satisfied, disposed of, or
9146	9146	barred under Section 10A-3A-11.08, this section, or other law,
9147	9147	the person or persons designated to wind up the affairs of a
9148	9148	dissolved nonprofit corporation, and the distributees
9149	9149	receiving assets from the dissolved nonprofit corporation,
9150	9150	shall not be liable for that claim.
9151	9151	§10A-3A-11.10. Director duties.
9152	9152	(a) Directors shall cause the dissolved nonprofit
9153	9153	corporation to discharge or make reasonable provision for the
9154	9154	payment of claims and make distributions in liquidation of
9155	9155	assets to the persons designated to receive the assets of the
9156	9156	dissolved nonprofit corporation after payment or provision for
9157	9157	4481
9158	9158	4482
9159	9159	4483
9160	9160	4484
9161	9161	4485
9162	9162	4486
9163	9163	4487
9164	9164	4488
9165	9165	4489
9166	9166	4490
9167	9167	4491
9168	9168	4492
9169	9169	4493
9170	9170	4494
9171	9171	4495
9172	9172	4496
9173	9173	4497
9174	9174	4498
9175	9175	4499
9176	9176	4500
9177	9177	4501
9178	9178	4502
9179	9179	4503
9180	9180	4504
9181	9181	4505
9182	9182	4506
9183	9183	4507
9184	9184	4508 SB245 INTRODUCEDSB245 INTRODUCED
9185	9185	Page 162
9186	9186	claims.
9187	9187	(b) Directors of a dissolved nonprofit corporation
9188	9188	which has disposed of claims under Section 10A-3A-11.08 or
9189	9189	Section 10A-3A-11.09 shall not be liable for breach of Section
9190	9190	10A-3A-11.10(a) with respect to claims against the dissolved
9191	9191	nonprofit corporation that are barred or satisfied under
9192	9192	Section 10A-3A-11.08 or Section 10A-3A-11.09.
9193	9193	DIVISION B. JUDICIAL DISSOLUTION.
9194	9194	§10A-3A-11.20. Grounds for judicial dissolution.
9195	9195	The circuit court for the county in which the nonprofit
9196	9196	corporation's principal office is located in this state, and
9197	9197	if none in this state, the circuit court for the county in
9198	9198	which the nonprofit corporation's most recent registered
9199	9199	office is located may dissolve a nonprofit corporation:
9200	9200	(1) in a proceeding by the Attorney General if it is
9201	9201	established that:
9202	9202	(i) the nonprofit corporation obtained its certificate
9203	9203	of incorporation through fraud; or
9204	9204	(ii) the nonprofit corporation has continued to exceed
9205	9205	or abuse the authority conferred upon it by law;
9206	9206	(2) in a proceeding by a director, or members holding
9207	9207	at least 25 percent of the aggregate voting power of all of
9208	9208	the members entitled to vote on dissolution, unless the
9209	9209	certificate of incorporation reduces or eliminates that
9210	9210	percentage requirement, if it is established that:
9211	9211	(i) the directors are deadlocked in the management of
9212	9212	the corporate affairs, the members, if any, are unable to
9213	9213	break the deadlock, and irreparable injury to the nonprofit
9214	9214	4509
9215	9215	4510
9216	9216	4511
9217	9217	4512
9218	9218	4513
9219	9219	4514
9220	9220	4515
9221	9221	4516
9222	9222	4517
9223	9223	4518
9224	9224	4519
9225	9225	4520
9226	9226	4521
9227	9227	4522
9228	9228	4523
9229	9229	4524
9230	9230	4525
9231	9231	4526
9232	9232	4527
9233	9233	4528
9234	9234	4529
9235	9235	4530
9236	9236	4531
9237	9237	4532
9238	9238	4533
9239	9239	4534
9240	9240	4535
9241	9241	4536 SB245 INTRODUCEDSB245 INTRODUCED
9242	9242	Page 163
9243	9243	corporation or its mission is threatened or being suffered,
9244	9244	because of the deadlock;
9245	9245	(ii) the directors or those in control of the nonprofit
9246	9246	corporation have acted, are acting, or will act in a manner
9247	9247	that is illegal, oppressive, or fraudulent;
9248	9248	(iii) the members are deadlocked in voting power and
9249	9249	have failed, for a period that includes at least two
9250	9250	consecutive annual meeting dates, to elect successors to
9251	9251	directors whose terms have expired;
9252	9252	(iv) the corporate assets are being misapplied or
9253	9253	wasted;
9254	9254	(v) the nonprofit corporation has insufficient assets
9255	9255	to continue its activities and affairs;
9256	9256	(vi) the nonprofit corporation is not able to assemble
9257	9257	a quorum of directors or members; or
9258	9258	(vii) the nonprofit corporation has abandoned its
9259	9259	activities and affairs and has failed within a reasonable time
9260	9260	to liquidate and distribute its assets and dissolve; or
9261	9261	(3) in a proceeding by a creditor if it is established
9262	9262	that:
9263	9263	(i) the creditor's claim has been reduced to judgment,
9264	9264	the execution on the judgment returned unsatisfied, and the
9265	9265	nonprofit corporation is insolvent; or
9266	9266	(ii) the nonprofit corporation has admitted in writing
9267	9267	that the creditor's claim is due and owing and the nonprofit
9268	9268	corporation is insolvent;
9269	9269	(4) in a proceeding by the nonprofit corporation to
9270	9270	have its voluntary dissolution continued under court
9271	9271	4537
9272	9272	4538
9273	9273	4539
9274	9274	4540
9275	9275	4541
9276	9276	4542
9277	9277	4543
9278	9278	4544
9279	9279	4545
9280	9280	4546
9281	9281	4547
9282	9282	4548
9283	9283	4549
9284	9284	4550
9285	9285	4551
9286	9286	4552
9287	9287	4553
9288	9288	4554
9289	9289	4555
9290	9290	4556
9291	9291	4557
9292	9292	4558
9293	9293	4559
9294	9294	4560
9295	9295	4561
9296	9296	4562
9297	9297	4563
9298	9298	4564 SB245 INTRODUCEDSB245 INTRODUCED
9299	9299	Page 164
9300	9300	supervision; or
9301	9301	(5) in a proceeding by an interested person, as
9302	9302	determined by the court, if it is established that:
9303	9303	(i) there is not at least one member or director of the
9304	9304	nonprofit corporation; and
9305	9305	(ii) a member or director cannot be elected in
9306	9306	accordance with the certificate of incorporation or bylaws of
9307	9307	the nonprofit corporation.
9308	9308	§10A-3A-11.21. Procedure for judicial dissolution.
9309	9309	(a) Venue for a proceeding by the Attorney General to
9310	9310	dissolve a nonprofit corporation lies in circuit court for the
9311	9311	county in which the nonprofit corporation's principal office
9312	9312	is located in this state, and if none in this state, in the
9313	9313	circuit court for the county in which the nonprofit
9314	9314	corporation's most recent registered office is located. Venue
9315	9315	for a proceeding brought by any other party named in Section
9316	9316	10A-3A-11.20 lies in circuit court for the county in which the
9317	9317	nonprofit corporation's principal office is located in this
9318	9318	state, and if none in this state, in the circuit court for the
9319	9319	county in which the nonprofit corporation's most recent
9320	9320	registered office is located.
9321	9321	(b) It is not necessary to make members or directors
9322	9322	parties to a proceeding to dissolve a nonprofit corporation
9323	9323	unless relief is sought against them individually.
9324	9324	(c) A court in a proceeding brought to dissolve a
9325	9325	nonprofit corporation may issue injunctions, appoint a
9326	9326	receiver or custodian during the proceeding with all powers
9327	9327	and duties the court directs, take other action required to
9328	9328	4565
9329	9329	4566
9330	9330	4567
9331	9331	4568
9332	9332	4569
9333	9333	4570
9334	9334	4571
9335	9335	4572
9336	9336	4573
9337	9337	4574
9338	9338	4575
9339	9339	4576
9340	9340	4577
9341	9341	4578
9342	9342	4579
9343	9343	4580
9344	9344	4581
9345	9345	4582
9346	9346	4583
9347	9347	4584
9348	9348	4585
9349	9349	4586
9350	9350	4587
9351	9351	4588
9352	9352	4589
9353	9353	4590
9354	9354	4591
9355	9355	4592 SB245 INTRODUCEDSB245 INTRODUCED
9356	9356	Page 165
9357	9357	preserve the corporate assets wherever located, and carry on
9358	9358	the activities and affairs of the nonprofit corporation until
9359	9359	a full hearing can be held.
9360	9360	§10A-3A-11.22. Receivership; custodianship;
9361	9361	continuation.
9362	9362	(a) A court in a judicial proceeding brought to
9363	9363	dissolve a nonprofit corporation may (i) appoint one or more
9364	9364	receivers to wind up and liquidate, (ii) appoint one or more
9365	9365	custodians to manage the activities and affairs of the
9366	9366	nonprofit corporation, or (iii) appoint one or more custodians
9367	9367	to determine whether the nonprofit corporation should be
9368	9368	dissolved. The court shall hold a hearing, after notifying all
9369	9369	parties to the proceeding and any interested persons
9370	9370	designated by the court, before appointing a receiver or
9371	9371	custodian. The court appointing a receiver or custodian has
9372	9372	jurisdiction over the nonprofit corporation and all of its
9373	9373	property wherever located.
9374	9374	(b) The court may appoint an individual, nonprofit
9375	9375	corporation, or other entity as a receiver or custodian,
9376	9376	which, if a foreign entity, must be registered to do business
9377	9377	in this state. The court may require the receiver or custodian
9378	9378	to post bond, with or without sureties, in an amount the court
9379	9379	directs.
9380	9380	(c) The court shall describe the powers and duties of
9381	9381	the receiver or custodian in its appointing order, which may
9382	9382	be amended from time to time. Among other powers:
9383	9383	(1) the receiver: (i) may dispose of all or any part of
9384	9384	the assets of the nonprofit corporation wherever located, at a
9385	9385	4593
9386	9386	4594
9387	9387	4595
9388	9388	4596
9389	9389	4597
9390	9390	4598
9391	9391	4599
9392	9392	4600
9393	9393	4601
9394	9394	4602
9395	9395	4603
9396	9396	4604
9397	9397	4605
9398	9398	4606
9399	9399	4607
9400	9400	4608
9401	9401	4609
9402	9402	4610
9403	9403	4611
9404	9404	4612
9405	9405	4613
9406	9406	4614
9407	9407	4615
9408	9408	4616
9409	9409	4617
9410	9410	4618
9411	9411	4619
9412	9412	4620 SB245 INTRODUCEDSB245 INTRODUCED
9413	9413	Page 166
9414	9414	public or private sale; and (ii) may sue and defend in the
9415	9415	receiver's own name as receiver of the nonprofit corporation
9416	9416	in all courts of this state.
9417	9417	(2) the custodian may exercise all of the powers of the
9418	9418	nonprofit corporation, through or in place of its board of
9419	9419	directors, to the extent necessary to manage the affairs of
9420	9420	the nonprofit corporation in the best interests of the mission
9421	9421	of the nonprofit corporation and in the best interests of the
9422	9422	nonprofit corporation, its members, if any, and creditors.
9423	9423	(3) in lieu of dissolution, the court may authorize a
9424	9424	custodian in a proceeding brought under Section 10A-3A-11.20,
9425	9425	to determine whether the nonprofit corporation should be
9426	9426	dissolved. If the custodian determines that the nonprofit
9427	9427	corporation should not be dissolved, the custodian shall
9428	9428	prepare and present to the court a plan of operation which
9429	9429	shall set forth:
9430	9430	(i) the reasons that it is in the best interest of the
9431	9431	nonprofit corporation to continue its activities and affairs
9432	9432	and not be dissolved;
9433	9433	(ii) that the continuation of the activities and
9434	9434	affairs of the nonprofit corporation will not be in
9435	9435	contravention of the certificate of incorporation or bylaws of
9436	9436	the nonprofit corporation;
9437	9437	(iii) any amendments to the certificate of
9438	9438	incorporation or bylaws necessary for the nonprofit
9439	9439	corporation to continue its activities and affairs in
9440	9440	accordance with the plan of operation;
9441	9441	(iv) for a membership nonprofit corporation that does
9442	9442	4621
9443	9443	4622
9444	9444	4623
9445	9445	4624
9446	9446	4625
9447	9447	4626
9448	9448	4627
9449	9449	4628
9450	9450	4629
9451	9451	4630
9452	9452	4631
9453	9453	4632
9454	9454	4633
9455	9455	4634
9456	9456	4635
9457	9457	4636
9458	9458	4637
9459	9459	4638
9460	9460	4639
9461	9461	4640
9462	9462	4641
9463	9463	4642
9464	9464	4643
9465	9465	4644
9466	9466	4645
9467	9467	4646
9468	9468	4647
9469	9469	4648 SB245 INTRODUCEDSB245 INTRODUCED
9470	9470	Page 167
9471	9471	not have any members, the name of at least one person proposed
9472	9472	to be a member; and
9473	9473	(v) for a nonmembership nonprofit corporation that does
9474	9474	not have any directors, the name of at least one person
9475	9475	proposed to be a director.
9476	9476	(4) the receiver or custodian shall have any other
9477	9477	powers and duties as the court may provide in the appointing
9478	9478	order, which may be amended from time to time.
9479	9479	(d) The court during a receivership may redesignate the
9480	9480	receiver a custodian and during a custodianship may
9481	9481	redesignate the custodian a receiver.
9482	9482	(e) The court from time to time during the receivership
9483	9483	or custodianship may order compensation paid and expenses paid
9484	9484	or reimbursed to the receiver or custodian from the assets of
9485	9485	the nonprofit corporation or proceeds from the sale of the
9486	9486	assets.
9487	9487	§10A-3A-11.23. Decree of dissolution or continuation.
9488	9488	(a) If after a hearing the court determines that one or
9489	9489	more grounds for judicial dissolution described in Section
9490	9490	10A-3A-11.20 exist, the court may enter a decree dissolving
9491	9491	the nonprofit corporation and specifying the effective date of
9492	9492	the dissolution. If the court enters a decree dissolving the
9493	9493	nonprofit corporation, then the clerk of the court shall
9494	9494	deliver a certified copy of the decree to the Secretary of
9495	9495	State for filing.
9496	9496	(b) After entering the decree of dissolution, the court
9497	9497	shall direct the winding up and liquidation of the nonprofit
9498	9498	corporation's activities and affairs in accordance with
9499	9499	4649
9500	9500	4650
9501	9501	4651
9502	9502	4652
9503	9503	4653
9504	9504	4654
9505	9505	4655
9506	9506	4656
9507	9507	4657
9508	9508	4658
9509	9509	4659
9510	9510	4660
9511	9511	4661
9512	9512	4662
9513	9513	4663
9514	9514	4664
9515	9515	4665
9516	9516	4666
9517	9517	4667
9518	9518	4668
9519	9519	4669
9520	9520	4670
9521	9521	4671
9522	9522	4672
9523	9523	4673
9524	9524	4674
9525	9525	4675
9526	9526	4676 SB245 INTRODUCEDSB245 INTRODUCED
9527	9527	Page 168
9528	9528	Section 10A-3A-11.07 and the notification of claimants in
9529	9529	accordance with Sections 10A-3A-11.08 and 10A-3A-11.09.
9530	9530	(c) If after a hearing the court determines pursuant to
9531	9531	Section 10A-3A-11.22(c)(3) that a nonprofit corporation should
9532	9532	not be dissolved, but should continue its activities and
9533	9533	affairs, the court shall issue a decree naming at least one
9534	9534	person as a member of the nonprofit corporation if it is a
9535	9535	membership nonprofit corporation, naming at least one director
9536	9536	if the nonprofit corporation is a nonmembership nonprofit
9537	9537	corporation, and such other matters as the court may
9538	9538	determine. If the court approves an amendment to the
9539	9539	certificate of incorporation in accordance with Section
9540	9540	10A-3A-11.22(c)(3), then the court's decree shall also set
9541	9541	forth that amendment, specifying the effective date of that
9542	9542	amendment, and the clerk of the court shall deliver a
9543	9543	certified copy of the decree to the Secretary of State for
9544	9544	filing.
9545	9545	§10A-3A-11.24. Deposit with State Treasurer.
9546	9546	Assets of a dissolved nonprofit corporation that should
9547	9547	be transferred to a creditor, claimant, or a person designated
9548	9548	to receive the assets of the nonprofit corporation who cannot
9549	9549	be found or who is not competent to receive them shall be
9550	9550	reduced to cash and deposited with the State Treasurer or
9551	9551	other appropriate state official for safekeeping. When the
9552	9552	creditor, claimant, or person designated to receive the assets
9553	9553	of the nonprofit corporation furnishes satisfactory proof of
9554	9554	entitlement to the amount deposited, the State Treasurer or
9555	9555	other appropriate state official shall pay that person or that
9556	9556	4677
9557	9557	4678
9558	9558	4679
9559	9559	4680
9560	9560	4681
9561	9561	4682
9562	9562	4683
9563	9563	4684
9564	9564	4685
9565	9565	4686
9566	9566	4687
9567	9567	4688
9568	9568	4689
9569	9569	4690
9570	9570	4691
9571	9571	4692
9572	9572	4693
9573	9573	4694
9574	9574	4695
9575	9575	4696
9576	9576	4697
9577	9577	4698
9578	9578	4699
9579	9579	4700
9580	9580	4701
9581	9581	4702
9582	9582	4703
9583	9583	4704 SB245 INTRODUCEDSB245 INTRODUCED
9584	9584	Page 169
9585	9585	person's representative that amount.
9586	9586	ARTICLE 12. MERGERS.
9587	9587	§10A-3A-12.01. Definitions.
9588	9588	As used in this article, unless the context otherwise
9589	9589	requires, the following terms mean:
9590	9590	(1) CONSTITUENT CORPORATION means a constituent
9591	9591	organization that is a nonprofit corporation.
9592	9592	(2) CONSTITUENT ORGANIZATION means an organization that
9593	9593	is party to a merger under this article.
9594	9594	(3) GOVERNING STATUTE of an organization means the
9595	9595	statute that governs the organization's internal affairs.
9596	9596	(4) ORGANIZATION means a general partnership, including
9597	9597	a limited liability partnership; limited partnership,
9598	9598	including a limited liability limited partnership; limited
9599	9599	liability company; business trust; business corporation;
9600	9600	nonprofit corporation; professional corporation; or any other
9601	9601	person having a governing statute. The term includes domestic
9602	9602	and foreign organizations whether or not organized for profit.
9603	9603	(5) ORGANIZATIONAL DOCUMENTS means:
9604	9604	(A) for a general partnership or foreign general
9605	9605	partnership, its partnership agreement and if applicable, its
9606	9606	registration as a limited liability partnership or a foreign
9607	9607	limited liability partnership;
9608	9608	(B) for a limited partnership or foreign limited
9609	9609	partnership, its certificate of formation and partnership
9610	9610	agreement, or comparable writings as provided in its governing
9611	9611	statute;
9612	9612	(C) for a limited liability company or foreign limited
9613	9613	4705
9614	9614	4706
9615	9615	4707
9616	9616	4708
9617	9617	4709
9618	9618	4710
9619	9619	4711
9620	9620	4712
9621	9621	4713
9622	9622	4714
9623	9623	4715
9624	9624	4716
9625	9625	4717
9626	9626	4718
9627	9627	4719
9628	9628	4720
9629	9629	4721
9630	9630	4722
9631	9631	4723
9632	9632	4724
9633	9633	4725
9634	9634	4726
9635	9635	4727
9636	9636	4728
9637	9637	4729
9638	9638	4730
9639	9639	4731
9640	9640	4732 SB245 INTRODUCEDSB245 INTRODUCED
9641	9641	Page 170
9642	9642	liability company, its certificate of formation and limited
9643	9643	liability company agreement, or comparable writings as
9644	9644	provided in its governing statute;
9645	9645	(D) for a business or statutory trust or foreign
9646	9646	business or statutory trust its agreement of trust and
9647	9647	declaration of trust, or comparable writings as provided in
9648	9648	its governing statute;
9649	9649	(E) for a business corporation or foreign business
9650	9650	corporation, its certificate of incorporation, bylaws, and
9651	9651	other agreements among its stockholders that are authorized by
9652	9652	its governing statute, or comparable writings as provided in
9653	9653	its governing statute;
9654	9654	(F) for a nonprofit corporation or foreign nonprofit
9655	9655	corporation, its certificate of incorporation, bylaws, and
9656	9656	other agreements that are authorized by its governing statute,
9657	9657	or comparable writings as provided in its governing statute;
9658	9658	(G) for a professional corporation or foreign
9659	9659	professional corporation, its certificate of incorporation,
9660	9660	bylaws, and other agreements among its stockholders that are
9661	9661	authorized by its governing statute, or comparable writings as
9662	9662	provided in its governing statute; and
9663	9663	(H) for any other organization, the basic writings that
9664	9664	create the organization and determine its internal governance
9665	9665	and the relations among the persons that own it, have an
9666	9666	interest in it, or are members of it.
9667	9667	(6) SURVIVING ORGANIZATION means an organization into
9668	9668	which one or more other organizations are merged under this
9669	9669	article, whether the organization pre-existed the merger or
9670	9670	4733
9671	9671	4734
9672	9672	4735
9673	9673	4736
9674	9674	4737
9675	9675	4738
9676	9676	4739
9677	9677	4740
9678	9678	4741
9679	9679	4742
9680	9680	4743
9681	9681	4744
9682	9682	4745
9683	9683	4746
9684	9684	4747
9685	9685	4748
9686	9686	4749
9687	9687	4750
9688	9688	4751
9689	9689	4752
9690	9690	4753
9691	9691	4754
9692	9692	4755
9693	9693	4756
9694	9694	4757
9695	9695	4758
9696	9696	4759
9697	9697	4760 SB245 INTRODUCEDSB245 INTRODUCED
9698	9698	Page 171
9699	9699	was created pursuant to the merger.
9700	9700	§10A-3A-12.02. Merger.
9701	9701	(a) A nonprofit corporation may merge with one or more
9702	9702	other constituent organizations pursuant to this article, and
9703	9703	a plan of merger, if:
9704	9704	(1) the governing statute of each of the other
9705	9705	organizations authorizes the merger;
9706	9706	(2) the merger is not prohibited by the law of a
9707	9707	jurisdiction that enacted any of those governing statutes; and
9708	9708	(3) each of the other organizations complies with its
9709	9709	governing statute in effecting the merger.
9710	9710	(b) A plan of merger must be in writing and must
9711	9711	include:
9712	9712	(1) the name, type of organization, and mailing address
9713	9713	of the principal office of each constituent organization, the
9714	9714	jurisdiction of the governing statute of each constituent
9715	9715	organization, and the respective unique identifying number or
9716	9716	other designation as assigned by the Secretary of State, if
9717	9717	any, of each constituent organization;
9718	9718	(2) the name, type of organization, and mailing address
9719	9719	of the principal office of the surviving organization, the
9720	9720	unique identifying number or other designation as assigned by
9721	9721	the Secretary of State, if any, of the surviving organization,
9722	9722	the jurisdiction of the governing statute of the surviving
9723	9723	organization, and, if the surviving organization is created
9724	9724	pursuant to the merger, a statement to that effect;
9725	9725	(3) the terms and conditions of the merger, including
9726	9726	the manner and basis for converting the interests in each
9727	9727	4761
9728	9728	4762
9729	9729	4763
9730	9730	4764
9731	9731	4765
9732	9732	4766
9733	9733	4767
9734	9734	4768
9735	9735	4769
9736	9736	4770
9737	9737	4771
9738	9738	4772
9739	9739	4773
9740	9740	4774
9741	9741	4775
9742	9742	4776
9743	9743	4777
9744	9744	4778
9745	9745	4779
9746	9746	4780
9747	9747	4781
9748	9748	4782
9749	9749	4783
9750	9750	4784
9751	9751	4785
9752	9752	4786
9753	9753	4787
9754	9754	4788 SB245 INTRODUCEDSB245 INTRODUCED
9755	9755	Page 172
9756	9756	constituent organization into any combination of money,
9757	9757	securities, interests in the surviving organization, and other
9758	9758	consideration as allowed by subsection (c);
9759	9759	(4) if the surviving organization is to be created
9760	9760	pursuant to the merger, the surviving organization's
9761	9761	organizational documents; and
9762	9762	(5) if the surviving organization is not to be created
9763	9763	pursuant to the merger, any amendments to be made by the
9764	9764	merger to the surviving organization's organizational
9765	9765	documents.
9766	9766	(c) In connection with a merger, rights, securities, or
9767	9767	interests, if any, in a constituent organization may be
9768	9768	exchanged for or converted into cash, property, rights,
9769	9769	securities, or interests, if any, in the surviving
9770	9770	organization, or, in addition to or in lieu thereof, may be
9771	9771	exchanged for or converted into cash, property, rights,
9772	9772	securities, or interests, if any, in another organization, or
9773	9773	may be cancelled.
9774	9774	(d) In addition to the requirements of subsection (b),
9775	9775	a plan of merger may contain any other provision not
9776	9776	prohibited by law.
9777	9777	(e) Terms of a plan of merger may be made dependent on
9778	9778	facts objectively ascertainable outside the plan in accordance
9779	9779	with Section 10A-3A-1.04(c)(5).
9780	9780	(f) A plan of merger may be amended only with the
9781	9781	consent of each constituent organization, except as provided
9782	9782	in the plan. A domestic constituent organization may approve
9783	9783	an amendment to a plan:
9784	9784	4789
9785	9785	4790
9786	9786	4791
9787	9787	4792
9788	9788	4793
9789	9789	4794
9790	9790	4795
9791	9791	4796
9792	9792	4797
9793	9793	4798
9794	9794	4799
9795	9795	4800
9796	9796	4801
9797	9797	4802
9798	9798	4803
9799	9799	4804
9800	9800	4805
9801	9801	4806
9802	9802	4807
9803	9803	4808
9804	9804	4809
9805	9805	4810
9806	9806	4811
9807	9807	4812
9808	9808	4813
9809	9809	4814
9810	9810	4815
9811	9811	4816 SB245 INTRODUCEDSB245 INTRODUCED
9812	9812	Page 173
9813	9813	(1) in the same manner as the plan was approved, if the
9814	9814	plan does not provide for the manner in which it may be
9815	9815	amended; or
9816	9816	(2) in the manner provided in the plan, except that if
9817	9817	the plan has been approved by the interest holders that were
9818	9818	entitled to vote on, consent to, or approve of, the plan, then
9819	9819	those interest holders are entitled to vote on, consent to, or
9820	9820	approve of any amendment of the plan that will change:
9821	9821	(i) the amount or kind of securities, interests,
9822	9822	obligations, rights to acquire other interests or securities,
9823	9823	cash, or other property to be received under the plan by the
9824	9824	interest holders of a constituent organization;
9825	9825	(ii) the certificate of incorporation of any nonprofit
9826	9826	corporation, foreign nonprofit corporation, business
9827	9827	corporation, foreign business corporation or the
9828	9828	organizational documents of any other organization, that will
9829	9829	be the surviving organization, except for changes permitted by
9830	9830	Section 10A-3A-9.03(g) or by comparable provisions of the
9831	9831	governing statute of the foreign nonprofit corporation,
9832	9832	business corporation, foreign business corporation, or other
9833	9833	organization; or
9834	9834	(iii) any of the other terms or conditions of the plan
9835	9835	if the change would adversely affect the interest holders in
9836	9836	any material respect.
9837	9837	§10A-3A-12.03. Action on a plan of merger in a
9838	9838	membership nonprofit corporation.
9839	9839	In the case of a membership nonprofit corporation that
9840	9840	is a constituent organization, the plan of merger shall be
9841	9841	4817
9842	9842	4818
9843	9843	4819
9844	9844	4820
9845	9845	4821
9846	9846	4822
9847	9847	4823
9848	9848	4824
9849	9849	4825
9850	9850	4826
9851	9851	4827
9852	9852	4828
9853	9853	4829
9854	9854	4830
9855	9855	4831
9856	9856	4832
9857	9857	4833
9858	9858	4834
9859	9859	4835
9860	9860	4836
9861	9861	4837
9862	9862	4838
9863	9863	4839
9864	9864	4840
9865	9865	4841
9866	9866	4842
9867	9867	4843
9868	9868	4844 SB245 INTRODUCEDSB245 INTRODUCED
9869	9869	Page 174
9870	9870	adopted in the following manner:
9871	9871	(a) The plan of merger shall first be adopted by the
9872	9872	board of directors.
9873	9873	(b) Except as provided in subsection (h), the plan of
9874	9874	merger shall then be approved by the members entitled to vote
9875	9875	thereon. In submitting the plan of merger to the members for
9876	9876	approval, the board of directors shall recommend that the
9877	9877	members approve the plan of merger, unless the board of
9878	9878	directors makes a determination that because of conflicts of
9879	9879	interest or other special circumstances it should not make a
9880	9880	recommendation, in which case the board of directors shall
9881	9881	inform the members of the basis for its so proceeding.
9882	9882	(c) The board of directors may set conditions for the
9883	9883	approval of the plan of merger by the members or the
9884	9884	effectiveness of the plan of merger.
9885	9885	(d) If the plan of merger is required to be approved by
9886	9886	the members, and if the approval is to be given at a meeting,
9887	9887	the membership nonprofit corporation shall notify each member
9888	9888	who is entitled to vote, of the meeting of the members at
9889	9889	which the plan of merger is to be submitted for approval. The
9890	9890	notice must state that the purpose, or one of the purposes, of
9891	9891	the meeting is to consider the plan of merger and must contain
9892	9892	or be accompanied by a copy or summary of the plan of merger.
9893	9893	If the membership nonprofit corporation is to be merged into
9894	9894	an existing nonprofit corporation, foreign nonprofit
9895	9895	corporation, or other organization, the notice must also
9896	9896	include or be accompanied by a copy or summary of the
9897	9897	certificate of incorporation and bylaws or the organizational
9898	9898	4845
9899	9899	4846
9900	9900	4847
9901	9901	4848
9902	9902	4849
9903	9903	4850
9904	9904	4851
9905	9905	4852
9906	9906	4853
9907	9907	4854
9908	9908	4855
9909	9909	4856
9910	9910	4857
9911	9911	4858
9912	9912	4859
9913	9913	4860
9914	9914	4861
9915	9915	4862
9916	9916	4863
9917	9917	4864
9918	9918	4865
9919	9919	4866
9920	9920	4867
9921	9921	4868
9922	9922	4869
9923	9923	4870
9924	9924	4871
9925	9925	4872 SB245 INTRODUCEDSB245 INTRODUCED
9926	9926	Page 175
9927	9927	documents of that nonprofit corporation, foreign nonprofit
9928	9928	corporation, or other organization. If the membership
9929	9929	nonprofit corporation is to be merged with a nonprofit
9930	9930	corporation, foreign nonprofit corporation, or other
9931	9931	organization and a new nonprofit corporation, foreign
9932	9932	nonprofit corporation, or organization is to be created
9933	9933	pursuant to the merger, the notice must include or be
9934	9934	accompanied by a copy or a summary of the certificate of
9935	9935	incorporation and bylaws or the organizational documents of
9936	9936	the new nonprofit corporation, foreign nonprofit corporation,
9937	9937	or other organization.
9938	9938	(e) Unless the certificate of incorporation, or the
9939	9939	board of directors acting pursuant to subsection (c), requires
9940	9940	a greater vote or a greater quorum, approval of the plan of
9941	9941	merger requires the approval of the members entitled to vote
9942	9942	at a meeting at which a quorum exists consisting of a majority
9943	9943	of the votes entitled to be cast on the plan of merger, and,
9944	9944	if any class of membership interests entitled to vote as a
9945	9945	separate group on the plan of merger, the approval of each
9946	9946	separate voting group at a meeting at which a quorum of the
9947	9947	voting group is present consisting of a majority of the votes
9948	9948	entitled to be cast on the merger by that voting group.
9949	9949	(f) Subject to subsection (g), separate voting by
9950	9950	voting groups is required:
9951	9951	(1) on a plan of merger, by each class of membership
9952	9952	interests that:
9953	9953	(i) are to be converted under the plan of merger into
9954	9954	securities, interests, obligations, rights to acquire other
9955	9955	4873
9956	9956	4874
9957	9957	4875
9958	9958	4876
9959	9959	4877
9960	9960	4878
9961	9961	4879
9962	9962	4880
9963	9963	4881
9964	9964	4882
9965	9965	4883
9966	9966	4884
9967	9967	4885
9968	9968	4886
9969	9969	4887
9970	9970	4888
9971	9971	4889
9972	9972	4890
9973	9973	4891
9974	9974	4892
9975	9975	4893
9976	9976	4894
9977	9977	4895
9978	9978	4896
9979	9979	4897
9980	9980	4898
9981	9981	4899
9982	9982	4900 SB245 INTRODUCEDSB245 INTRODUCED
9983	9983	Page 176
9984	9984	securities or interests, cash, other property, or any
9985	9985	combination of the foregoing; or
9986	9986	(ii) are entitled to vote as a separate group on a
9987	9987	provision in the plan of merger that constitutes a proposed
9988	9988	amendment to the certificate of incorporation of a surviving
9989	9989	nonprofit corporation that requires action by separate voting
9990	9990	groups under Section 10A-3A-9.04; and
9991	9991	(2) on a plan of merger, if the voting group is
9992	9992	entitled under the certificate of incorporation or bylaws to
9993	9993	vote as a voting group to approve a plan of merger,
9994	9994	respectively.
9995	9995	(g) The certificate of incorporation may expressly
9996	9996	limit or eliminate the separate voting rights provided in
9997	9997	subsection (f)(1)(i) and subsection (f)(2) as to any class of
9998	9998	membership, except when the plan of merger includes what is or
9999	9999	would be in effect an amendment subject to subsection
10000	10000	(f)(1)(ii).
10001	10001	(h) Unless the certificate of incorporation otherwise
10002	10002	provides, approval by the membership nonprofit corporation's
10003	10003	members of a plan of merger is not required if:
10004	10004	(1) the membership nonprofit corporation will survive
10005	10005	the merger;
10006	10006	(2) except for amendments that do not require member
10007	10007	approval under Section 10A-3A-9.03(g) or the approval of a
10008	10008	person or group of persons under Section 10A-3A-9.30, its
10009	10009	certificate of incorporation will not be changed;
10010	10010	(3) except for amendments that do not require member
10011	10011	approval under Section 10A-3A-9.22 or the approval of a person
10012	10012	4901
10013	10013	4902
10014	10014	4903
10015	10015	4904
10016	10016	4905
10017	10017	4906
10018	10018	4907
10019	10019	4908
10020	10020	4909
10021	10021	4910
10022	10022	4911
10023	10023	4912
10024	10024	4913
10025	10025	4914
10026	10026	4915
10027	10027	4916
10028	10028	4917
10029	10029	4918
10030	10030	4919
10031	10031	4920
10032	10032	4921
10033	10033	4922
10034	10034	4923
10035	10035	4924
10036	10036	4925
10037	10037	4926
10038	10038	4927
10039	10039	4928 SB245 INTRODUCEDSB245 INTRODUCED
10040	10040	Page 177
10041	10041	or group of persons under Section 10A-3A-9.30, its bylaws will
10042	10042	not be changed; and
10043	10043	(4) each member of the membership nonprofit corporation
10044	10044	whose membership interest was outstanding immediately before
10045	10045	the effective date of the merger will hold the same number of
10046	10046	membership interests, with identical preferences, rights, and
10047	10047	limitations, immediately after the effective date of the
10048	10048	merger.
10049	10049	(i) In addition to the adoption and approval of the
10050	10050	plan of merger as required by this section, the plan must also
10051	10051	be approved in writing by a person or group of persons, if
10052	10052	any, whose approval is required under Section 10A-3A-12.08.
10053	10053	§10A-3A-12.04. Action on a plan of merger in a
10054	10054	nonmembership nonprofit corporation.
10055	10055	In the case of a merger of a nonmembership nonprofit
10056	10056	corporation the plan of merger shall be adopted in the
10057	10057	following manner:
10058	10058	(a) The plan of merger shall be adopted by the board of
10059	10059	directors; and
10060	10060	(b) A plan of merger adopted by the board of directors
10061	10061	under this section must also be approved in writing by a
10062	10062	person or group of persons, if any, whose approval is required
10063	10063	under Section 10A-3A-12.08.
10064	10064	§10A-3A-12.05. Statement of merger.
10065	10065	(a) After a plan of merger has been adopted and
10066	10066	approved as required by this article, then a statement of
10067	10067	merger shall be signed by each party to the merger. The
10068	10068	statement of merger must set forth:
10069	10069	4929
10070	10070	4930
10071	10071	4931
10072	10072	4932
10073	10073	4933
10074	10074	4934
10075	10075	4935
10076	10076	4936
10077	10077	4937
10078	10078	4938
10079	10079	4939
10080	10080	4940
10081	10081	4941
10082	10082	4942
10083	10083	4943
10084	10084	4944
10085	10085	4945
10086	10086	4946
10087	10087	4947
10088	10088	4948
10089	10089	4949
10090	10090	4950
10091	10091	4951
10092	10092	4952
10093	10093	4953
10094	10094	4954
10095	10095	4955
10096	10096	4956 SB245 INTRODUCEDSB245 INTRODUCED
10097	10097	Page 178
10098	10098	(1) the name, type of organization, and mailing address
10099	10099	of the principal office of each constituent organization, the
10100	10100	jurisdiction of the governing statute of each constituent
10101	10101	organization, and the respective unique identifying number or
10102	10102	other designation as assigned by the Secretary of State, if
10103	10103	any, of each constituent organization;
10104	10104	(2) the name, type of organization, and mailing address
10105	10105	of the principal office of the surviving organization, the
10106	10106	unique identifying number or other designation as assigned by
10107	10107	the Secretary of State, if any, of the surviving organization,
10108	10108	the jurisdiction of the governing statute of the surviving
10109	10109	organization, and, if the surviving organization is created
10110	10110	pursuant to the merger, a statement to that effect;
10111	10111	(3) the date the merger is effective under the
10112	10112	governing statute of the surviving organization;
10113	10113	(4) if the surviving organization is to be created
10114	10114	pursuant to the merger:
10115	10115	(A) if it will be a nonprofit corporation, the
10116	10116	nonprofit corporation's certificate of incorporation; or
10117	10117	(B) if it will be an organization other than a
10118	10118	nonprofit corporation, any organizational document that
10119	10119	creates the organization that is required to be in a public
10120	10120	writing or in the case of a limited liability partnership, its
10121	10121	statement of limited liability partnership;
10122	10122	(5) if the surviving organization exists before the
10123	10123	merger, any amendments provided for in the plan of merger for
10124	10124	the organizational document that created the organization that
10125	10125	are in a public writing;
10126	10126	4957
10127	10127	4958
10128	10128	4959
10129	10129	4960
10130	10130	4961
10131	10131	4962
10132	10132	4963
10133	10133	4964
10134	10134	4965
10135	10135	4966
10136	10136	4967
10137	10137	4968
10138	10138	4969
10139	10139	4970
10140	10140	4971
10141	10141	4972
10142	10142	4973
10143	10143	4974
10144	10144	4975
10145	10145	4976
10146	10146	4977
10147	10147	4978
10148	10148	4979
10149	10149	4980
10150	10150	4981
10151	10151	4982
10152	10152	4983
10153	10153	4984 SB245 INTRODUCEDSB245 INTRODUCED
10154	10154	Page 179
10155	10155	(6) a statement as to each constituent organization
10156	10156	that the merger was approved as required by the organization's
10157	10157	governing statute;
10158	10158	(7) if the surviving organization is a foreign
10159	10159	organization not authorized to conduct activities and affairs
10160	10160	in this state, the street and mailing address of an office for
10161	10161	the purposes of Section 10A-3A-12.06(b);
10162	10162	(8) any additional information required by the
10163	10163	governing statute of any constituent organization;
10164	10164	(9) if the plan of merger required approval by the
10165	10165	members of a membership nonprofit corporation that is a
10166	10166	constituent organization, a statement that the plan was duly
10167	10167	approved by the members and, if voting by any separate voting
10168	10168	group was required, by each separate voting group, in the
10169	10169	manner required by this chapter, the certificate of
10170	10170	incorporation or bylaws;
10171	10171	(10) if the plan of merger required approval by a
10172	10172	person or group of persons as specified in the certificate of
10173	10173	incorporation pursuant to Section 10A-3A-12.08, a statement
10174	10174	that the plan was duly approved by that person or group of
10175	10175	persons;
10176	10176	(11) if the plan of merger did not require approval by
10177	10177	the members of a membership nonprofit corporation that is a
10178	10178	constituent organization, a statement to that effect; and
10179	10179	(12) a statement that the plan of merger will be
10180	10180	furnished by the surviving organization, on request and
10181	10181	without cost, to any member or owner of any constituent
10182	10182	organization which is a party to the merger.
10183	10183	4985
10184	10184	4986
10185	10185	4987
10186	10186	4988
10187	10187	4989
10188	10188	4990
10189	10189	4991
10190	10190	4992
10191	10191	4993
10192	10192	4994
10193	10193	4995
10194	10194	4996
10195	10195	4997
10196	10196	4998
10197	10197	4999
10198	10198	5000
10199	10199	5001
10200	10200	5002
10201	10201	5003
10202	10202	5004
10203	10203	5005
10204	10204	5006
10205	10205	5007
10206	10206	5008
10207	10207	5009
10208	10208	5010
10209	10209	5011
10210	10210	5012 SB245 INTRODUCEDSB245 INTRODUCED
10211	10211	Page 180
10212	10212	(b) In addition to the requirements of subsection (a),
10213	10213	a statement of merger may contain any other provision not
10214	10214	prohibited by law.
10215	10215	(c) The statement of merger shall be delivered to the
10216	10216	Secretary of State for filing and, subject to subsection (d),
10217	10217	the merger shall take effect at the effective date and time
10218	10218	determined in accordance with Article 4 of Chapter 1.
10219	10219	(d) With respect to a merger in which one or more
10220	10220	foreign organizations is a constituent organization or a
10221	10221	foreign organization created by the merger is the surviving
10222	10222	organization, the merger itself shall become effective at the
10223	10223	later of:
10224	10224	(1) when all documents required to be filed in foreign
10225	10225	jurisdictions to effect the merger have become effective, or
10226	10226	(2) when the statement of merger takes effect.
10227	10227	(e) A statement of merger filed under this section may
10228	10228	be combined with any filing required under the governing
10229	10229	statute governing any domestic organization involved in the
10230	10230	transaction if the combined filing satisfies the requirements
10231	10231	of this section, the other governing statute, and Article 4 of
10232	10232	Chapter 1.
10233	10233	(f) A certified copy of the statement of merger
10234	10234	required to be filed under this section may be filed in the
10235	10235	real estate records in the office of the judge of probate in
10236	10236	any county in which any constituent organization owned real
10237	10237	property, without payment and without collection by the judge
10238	10238	of probate of any deed or other transfer tax or fee. The judge
10239	10239	of probate, however, shall be entitled to collect the filing
10240	10240	5013
10241	10241	5014
10242	10242	5015
10243	10243	5016
10244	10244	5017
10245	10245	5018
10246	10246	5019
10247	10247	5020
10248	10248	5021
10249	10249	5022
10250	10250	5023
10251	10251	5024
10252	10252	5025
10253	10253	5026
10254	10254	5027
10255	10255	5028
10256	10256	5029
10257	10257	5030
10258	10258	5031
10259	10259	5032
10260	10260	5033
10261	10261	5034
10262	10262	5035
10263	10263	5036
10264	10264	5037
10265	10265	5038
10266	10266	5039
10267	10267	5040 SB245 INTRODUCEDSB245 INTRODUCED
10268	10268	Page 181
10269	10269	fee of five dollars ($5). Any filing shall evidence chain of
10270	10270	title, but lack of filing shall not affect the surviving
10271	10271	organization's title to real property.
10272	10272	(g) A statement of conversion is a filing instrument
10273	10273	under Chapter 1.
10274	10274	(h) The filing fees for a statement of conversion shall
10275	10275	be as set forth in Chapter 1.
10276	10276	§10A-3A-12.06. Effect of merger.
10277	10277	(a) When a merger becomes effective:
10278	10278	(1) the surviving organization continues or, in the
10279	10279	case of a surviving organization created pursuant to the
10280	10280	merger, comes into existence;
10281	10281	(2) each constituent organization that merges into the
10282	10282	surviving organization ceases to exist as a separate entity;
10283	10283	(3) except as provided in the plan of merger, all
10284	10284	property owned by, and every contract right possessed by, each
10285	10285	constituent organization that ceases to exist vests in the
10286	10286	surviving organization without transfer, reversion, or
10287	10287	impairment and the title to any property and contract rights
10288	10288	vested by deed or otherwise in the surviving organization
10289	10289	shall not revert, be in any way impaired, or be deemed to be a
10290	10290	transfer by reason of the merger;
10291	10291	(4) all debts, obligations, and other liabilities of
10292	10292	each constituent organization, other than the surviving
10293	10293	organization, are debts, obligations, and liabilities of the
10294	10294	surviving organization, and neither the rights of creditors,
10295	10295	nor any liens upon the property of any constituent
10296	10296	organization, shall be impaired by the merger;
10297	10297	5041
10298	10298	5042
10299	10299	5043
10300	10300	5044
10301	10301	5045
10302	10302	5046
10303	10303	5047
10304	10304	5048
10305	10305	5049
10306	10306	5050
10307	10307	5051
10308	10308	5052
10309	10309	5053
10310	10310	5054
10311	10311	5055
10312	10312	5056
10313	10313	5057
10314	10314	5058
10315	10315	5059
10316	10316	5060
10317	10317	5061
10318	10318	5062
10319	10319	5063
10320	10320	5064
10321	10321	5065
10322	10322	5066
10323	10323	5067
10324	10324	5068 SB245 INTRODUCEDSB245 INTRODUCED
10325	10325	Page 182
10326	10326	(5) an action or proceeding pending by or against any
10327	10327	constituent organization continues as if the merger had not
10328	10328	occurred and the name of the surviving organization may, but
10329	10329	need not be, substituted in any pending proceeding for the
10330	10330	name of any constituent organization whose separate existence
10331	10331	ceased in the merger;
10332	10332	(6) except as prohibited by law other than this chapter
10333	10333	or as provided in the plan of merger, all the rights,
10334	10334	privileges, franchises, immunities, powers, and purposes of
10335	10335	each constituent organization, other than the surviving
10336	10336	organization, vest in the surviving organization;
10337	10337	(7) except as otherwise provided in the plan of merger,
10338	10338	the terms and conditions of the plan of merger take effect;
10339	10339	(8) except as otherwise agreed, if a constituent
10340	10340	organization that is a nonprofit corporation ceases to exist,
10341	10341	the merger does not dissolve the nonprofit corporation;
10342	10342	(9) if the surviving organization is created pursuant
10343	10343	to the merger:
10344	10344	(A) if it is a nonprofit corporation, the certificate
10345	10345	of incorporation and bylaws become effective; or
10346	10346	(B) if it is an organization other than a nonprofit
10347	10347	corporation, the organizational documents that create the
10348	10348	organization becomes effective;
10349	10349	(10) if the surviving organization existed before the
10350	10350	merger, any amendments provided for in the statement of merger
10351	10351	for the organizational documents of that organization become
10352	10352	effective;
10353	10353	(11) the membership interests, if any, of each
10354	10354	5069
10355	10355	5070
10356	10356	5071
10357	10357	5072
10358	10358	5073
10359	10359	5074
10360	10360	5075
10361	10361	5076
10362	10362	5077
10363	10363	5078
10364	10364	5079
10365	10365	5080
10366	10366	5081
10367	10367	5082
10368	10368	5083
10369	10369	5084
10370	10370	5085
10371	10371	5086
10372	10372	5087
10373	10373	5088
10374	10374	5089
10375	10375	5090
10376	10376	5091
10377	10377	5092
10378	10378	5093
10379	10379	5094
10380	10380	5095
10381	10381	5096 SB245 INTRODUCEDSB245 INTRODUCED
10382	10382	Page 183
10383	10383	nonprofit corporation or foreign nonprofit corporation that is
10384	10384	a constituent organization to the merger, and the interests in
10385	10385	an organization that is a constituent organization, that are
10386	10386	to be converted in accordance with the terms of the merger
10387	10387	into securities, interests, obligations, rights to acquire
10388	10388	other securities or interests, cash, other property, or any
10389	10389	combination of the foregoing, are converted, and the former
10390	10390	holders of membership interests, if any, or interests are
10391	10391	entitled only to the rights provided to them by those terms or
10392	10392	to any rights they may have under the governing statute
10393	10393	governing that constituent organization;
10394	10394	(12) if the surviving organization exists before the
10395	10395	merger:
10396	10396	(A) except as provided in the plan of merger, all
10397	10397	property and contract rights of the surviving organization
10398	10398	remain its property and contract rights without transfer,
10399	10399	reversion, or impairment;
10400	10400	(B) the surviving organization remains subject to all
10401	10401	its debts, obligations, and other liabilities; and
10402	10402	(C) except as provided by law other than this chapter
10403	10403	or the plan of merger, the surviving organization continues to
10404	10404	hold all of its rights, privileges, franchises, immunities,
10405	10405	powers and purposes.
10406	10406	(b) A surviving organization that is a foreign
10407	10407	organization:
10408	10408	(1) consents to the jurisdiction of this state to
10409	10409	enforce any debt, obligation, or other liability owed by a
10410	10410	constituent organization, if before the merger the constituent
10411	10411	5097
10412	10412	5098
10413	10413	5099
10414	10414	5100
10415	10415	5101
10416	10416	5102
10417	10417	5103
10418	10418	5104
10419	10419	5105
10420	10420	5106
10421	10421	5107
10422	10422	5108
10423	10423	5109
10424	10424	5110
10425	10425	5111
10426	10426	5112
10427	10427	5113
10428	10428	5114
10429	10429	5115
10430	10430	5116
10431	10431	5117
10432	10432	5118
10433	10433	5119
10434	10434	5120
10435	10435	5121
10436	10436	5122
10437	10437	5123
10438	10438	5124 SB245 INTRODUCEDSB245 INTRODUCED
10439	10439	Page 184
10440	10440	organization was subject to suit in this state on the debt,
10441	10441	obligation, or other liability; and
10442	10442	(2) consents that if it fails to designate or maintain
10443	10443	a registered agent, or the designated registered agent cannot
10444	10444	with reasonable diligence be served, then the service of
10445	10445	process on that surviving organization for the purposes of
10446	10446	enforcing a debt, obligation, or other liability under this
10447	10447	subsection and for enforcing the rights, if any, of members of
10448	10448	each nonprofit corporation that is a constituent organization
10449	10449	may be made in the same manner and has the same consequences
10450	10450	as provided in Section 10A-1-5.35.
10451	10451	§10A-3A-12.07. Abandonment of a merger.
10452	10452	(a) After a plan of merger has been adopted and
10453	10453	approved as required by this Article 12, and before the
10454	10454	statement of merger has become effective, the plan may be
10455	10455	abandoned by a nonprofit corporation that is a party to the
10456	10456	plan without action by its members, if any, or a person or
10457	10457	group of persons under Section 10A-3A-12.08, if any, in
10458	10458	accordance with any procedures set forth in the plan of merger
10459	10459	or, if no procedures are set forth in the plan, in the manner
10460	10460	determined by the board of directors.
10461	10461	(b) If a merger is abandoned under subsection (a) after
10462	10462	the statement of merger has been delivered to the Secretary of
10463	10463	State for filing but before the merger has become effective, a
10464	10464	statement of abandonment signed by all the parties that signed
10465	10465	the statement of merger shall be delivered to the Secretary of
10466	10466	State for filing before the statement of merger becomes
10467	10467	effective. The statement shall take effect on filing and the
10468	10468	5125
10469	10469	5126
10470	10470	5127
10471	10471	5128
10472	10472	5129
10473	10473	5130
10474	10474	5131
10475	10475	5132
10476	10476	5133
10477	10477	5134
10478	10478	5135
10479	10479	5136
10480	10480	5137
10481	10481	5138
10482	10482	5139
10483	10483	5140
10484	10484	5141
10485	10485	5142
10486	10486	5143
10487	10487	5144
10488	10488	5145
10489	10489	5146
10490	10490	5147
10491	10491	5148
10492	10492	5149
10493	10493	5150
10494	10494	5151
10495	10495	5152 SB245 INTRODUCEDSB245 INTRODUCED
10496	10496	Page 185
10497	10497	merger shall be deemed abandoned and shall not become
10498	10498	effective. The statement of abandonment must contain:
10499	10499	(1) the name of each party to the merger;
10500	10500	(2) the date on which the statement of merger was filed
10501	10501	by the Secretary of State; and
10502	10502	(3) a statement that the merger has been abandoned in
10503	10503	accordance with this section.
10504	10504	§10A-3A-12.08. Approval by specified person or group of
10505	10505	persons.
10506	10506	(a) The certificate of incorporation of a membership
10507	10507	nonprofit corporation may require that a merger under this
10508	10508	article or under Article 8 of Chapter 1 be approved in writing
10509	10509	by a specified person or group of persons in addition to the
10510	10510	board of directors and members.
10511	10511	(b) The certificate of incorporation of a nonmembership
10512	10512	nonprofit corporation may require that a merger under this
10513	10513	article or under Article 8 of Chapter 1 be approved in writing
10514	10514	by a specified person or group of persons in addition to the
10515	10515	board of directors.
10516	10516	(c) A requirement in the certificate of incorporation
10517	10517	described in subsections (a) or (b) of this section may only
10518	10518	be approved by the written approval of the specified person or
10519	10519	group of persons.
10520	10520	§10A-3A-12.09. Nonexclusive.
10521	10521	This article is not exclusive. This article does not
10522	10522	preclude a nonprofit corporation from merging under law other
10523	10523	than this chapter.
10524	10524	ARTICLE 13. CONVERSIONS.
10525	10525	5153
10526	10526	5154
10527	10527	5155
10528	10528	5156
10529	10529	5157
10530	10530	5158
10531	10531	5159
10532	10532	5160
10533	10533	5161
10534	10534	5162
10535	10535	5163
10536	10536	5164
10537	10537	5165
10538	10538	5166
10539	10539	5167
10540	10540	5168
10541	10541	5169
10542	10542	5170
10543	10543	5171
10544	10544	5172
10545	10545	5173
10546	10546	5174
10547	10547	5175
10548	10548	5176
10549	10549	5177
10550	10550	5178
10551	10551	5179
10552	10552	5180 SB245 INTRODUCEDSB245 INTRODUCED
10553	10553	Page 186
10554	10554	§10A-3A-13.01. Definitions.
10555	10555	As used in this article, unless the context otherwise
10556	10556	requires, the following terms mean:
10557	10557	(1) CONVERTED ORGANIZATION means the organization into
10558	10558	which a converting organization converts pursuant to this
10559	10559	article.
10560	10560	(2) CONVERTING NONPROFIT CORPORATION means a converting
10561	10561	organization that is a nonprofit corporation.
10562	10562	(3) CONVERTING ORGANIZATION means an organization that
10563	10563	converts into another organization pursuant to this article.
10564	10564	(4) GOVERNING STATUTE of an organization means the
10565	10565	statute that governs the organization's internal affairs.
10566	10566	(5) ORGANIZATION means a general partnership, including
10567	10567	a limited liability partnership; limited partnership,
10568	10568	including a limited liability limited partnership; limited
10569	10569	liability company; business trust; business corporation;
10570	10570	nonprofit corporation; professional corporation; or any other
10571	10571	person having a governing statute. The term includes domestic
10572	10572	and foreign organizations whether or not organized for profit.
10573	10573	(6) ORGANIZATIONAL DOCUMENTS means:
10574	10574	(A) for a general partnership or foreign general
10575	10575	partnership, its partnership agreement and if applicable, its
10576	10576	registration as a limited liability partnership or a foreign
10577	10577	limited liability partnership;
10578	10578	(B) for a limited partnership or foreign limited
10579	10579	partnership, its certificate of formation and partnership
10580	10580	agreement, or comparable writings as provided in its governing
10581	10581	statute;
10582	10582	5181
10583	10583	5182
10584	10584	5183
10585	10585	5184
10586	10586	5185
10587	10587	5186
10588	10588	5187
10589	10589	5188
10590	10590	5189
10591	10591	5190
10592	10592	5191
10593	10593	5192
10594	10594	5193
10595	10595	5194
10596	10596	5195
10597	10597	5196
10598	10598	5197
10599	10599	5198
10600	10600	5199
10601	10601	5200
10602	10602	5201
10603	10603	5202
10604	10604	5203
10605	10605	5204
10606	10606	5205
10607	10607	5206
10608	10608	5207
10609	10609	5208 SB245 INTRODUCEDSB245 INTRODUCED
10610	10610	Page 187
10611	10611	(C) for a limited liability company or foreign limited
10612	10612	liability company, its certificate of formation and limited
10613	10613	liability company agreement, or comparable writings as
10614	10614	provided in its governing statute;
10615	10615	(D) for a business or statutory trust or foreign
10616	10616	business or statutory trust, its agreement of trust and
10617	10617	declaration of trust, or comparable writings as provided in
10618	10618	its governing statute;
10619	10619	(E) for a business corporation or foreign business
10620	10620	corporation, its certificate of incorporation, bylaws, and
10621	10621	other agreements among its stockholders that are authorized by
10622	10622	its governing statute or comparable writings as provided in
10623	10623	its governing statute;
10624	10624	(F) for a nonprofit corporation or foreign nonprofit
10625	10625	corporation, its certificate of incorporation, bylaws, and
10626	10626	other agreements that are authorized by its governing statute,
10627	10627	or comparable writings as provided in its governing statute;
10628	10628	(G) for a professional corporation or foreign
10629	10629	professional corporation, its certificate of incorporation,
10630	10630	bylaws, and other agreements among its stockholders that are
10631	10631	authorized by its governing statute or comparable writings as
10632	10632	provided in its governing statute; and
10633	10633	(H) for any other organization, the basic writings that
10634	10634	create the organization and determine its internal governance
10635	10635	and the relations among the persons that own it, have an
10636	10636	interest in it, or are members of it.
10637	10637	§10A-3A-13.02. Conversion.
10638	10638	(a) An organization other than a nonprofit corporation
10639	10639	5209
10640	10640	5210
10641	10641	5211
10642	10642	5212
10643	10643	5213
10644	10644	5214
10645	10645	5215
10646	10646	5216
10647	10647	5217
10648	10648	5218
10649	10649	5219
10650	10650	5220
10651	10651	5221
10652	10652	5222
10653	10653	5223
10654	10654	5224
10655	10655	5225
10656	10656	5226
10657	10657	5227
10658	10658	5228
10659	10659	5229
10660	10660	5230
10661	10661	5231
10662	10662	5232
10663	10663	5233
10664	10664	5234
10665	10665	5235
10666	10666	5236 SB245 INTRODUCEDSB245 INTRODUCED
10667	10667	Page 188
10668	10668	may convert to a nonprofit corporation, and a nonprofit
10669	10669	corporation may convert to an organization other than a
10670	10670	nonprofit corporation pursuant to this article, and a plan of
10671	10671	conversion, if:
10672	10672	(1) the governing statute of the organization that is
10673	10673	not a nonprofit corporation authorizes the conversion;
10674	10674	(2) the law of the jurisdiction governing the
10675	10675	converting organization and the converted organization does
10676	10676	not prohibit the conversion; and
10677	10677	(3) the converting organization and the converted
10678	10678	organization each comply with the governing statute and
10679	10679	organizational documents applicable to that organization in
10680	10680	effecting the conversion.
10681	10681	(b) A plan of conversion must be in writing and must
10682	10682	include:
10683	10683	(1) the name, type of organization, and mailing address
10684	10684	of the principal office of the converting organization and its
10685	10685	unique identifying number or other designation as assigned by
10686	10686	the Secretary of State, if any, before conversion;
10687	10687	(2) the name, type of organization, and mailing address
10688	10688	of the principal office of the converted organization after
10689	10689	conversion;
10690	10690	(3) the terms and conditions of the conversion,
10691	10691	including the manner and basis for converting interests, if
10692	10692	any, in the converting organization into any combination of
10693	10693	money, interests in the converted organization, and other
10694	10694	consideration allowed in subsection (c); and
10695	10695	(4) the organizational documents of the converted
10696	10696	5237
10697	10697	5238
10698	10698	5239
10699	10699	5240
10700	10700	5241
10701	10701	5242
10702	10702	5243
10703	10703	5244
10704	10704	5245
10705	10705	5246
10706	10706	5247
10707	10707	5248
10708	10708	5249
10709	10709	5250
10710	10710	5251
10711	10711	5252
10712	10712	5253
10713	10713	5254
10714	10714	5255
10715	10715	5256
10716	10716	5257
10717	10717	5258
10718	10718	5259
10719	10719	5260
10720	10720	5261
10721	10721	5262
10722	10722	5263
10723	10723	5264 SB245 INTRODUCEDSB245 INTRODUCED
10724	10724	Page 189
10725	10725	organization.
10726	10726	(c) In connection with a conversion, rights or
10727	10727	securities of or interests, if any, in the converting
10728	10728	organization may be exchanged for or converted into cash,
10729	10729	property, or rights or securities of or interests, if any, in
10730	10730	the converted organization, or, in addition to or in lieu
10731	10731	thereof, may be exchanged for or converted into cash,
10732	10732	property, rights, securities, or interests, if any, in another
10733	10733	organization, or may be cancelled.
10734	10734	(d) In addition to the requirements of subsection (b),
10735	10735	a plan of conversion may contain any other provision not
10736	10736	prohibited by law.
10737	10737	(e) Terms of a plan of conversion may be made dependent
10738	10738	on facts objectively ascertainable outside the plan in
10739	10739	accordance with Section 10A-3A-1.04(c).
10740	10740	§10A-3A-13.03. Action on a plan of conversion in a
10741	10741	membership nonprofit corporation.
10742	10742	In the case of a conversion of a membership nonprofit
10743	10743	corporation the plan of conversion shall be adopted in the
10744	10744	following manner:
10745	10745	(a) The plan of conversion shall first be adopted by
10746	10746	the board of directors.
10747	10747	(b) The plan of conversion shall then be approved by
10748	10748	the members entitled to vote thereon. In submitting the plan
10749	10749	of conversion to the members for their approval, the board of
10750	10750	directors must recommend that the members approve the plan of
10751	10751	conversion, unless the board of directors makes a
10752	10752	determination that because of conflicts of interest or other
10753	10753	5265
10754	10754	5266
10755	10755	5267
10756	10756	5268
10757	10757	5269
10758	10758	5270
10759	10759	5271
10760	10760	5272
10761	10761	5273
10762	10762	5274
10763	10763	5275
10764	10764	5276
10765	10765	5277
10766	10766	5278
10767	10767	5279
10768	10768	5280
10769	10769	5281
10770	10770	5282
10771	10771	5283
10772	10772	5284
10773	10773	5285
10774	10774	5286
10775	10775	5287
10776	10776	5288
10777	10777	5289
10778	10778	5290
10779	10779	5291
10780	10780	5292 SB245 INTRODUCEDSB245 INTRODUCED
10781	10781	Page 190
10782	10782	special circumstances it should not make a recommendation, in
10783	10783	which case the board of directors shall inform the members of
10784	10784	the basis for its so proceeding.
10785	10785	(c) The board of directors may set conditions for the
10786	10786	approval of the plan of conversion by the members or the
10787	10787	effectiveness of the plan of conversion.
10788	10788	(d) If the approval of the members is to be given at a
10789	10789	meeting, the nonprofit corporation shall notify each member
10790	10790	entitled to vote of the meeting of members at which the plan
10791	10791	of conversion is to be submitted for approval. The notice must
10792	10792	state that the purpose, or one of the purposes, of the meeting
10793	10793	is to consider the plan of conversion and must contain or be
10794	10794	accompanied by a copy or summary of the plan of conversion.
10795	10795	The notice must include or be accompanied by a copy of the
10796	10796	organizational documents of the converted organization which
10797	10797	are to be in writing as they will be in effect immediately
10798	10798	after the conversion.
10799	10799	(e) Unless the certificate of incorporation or the
10800	10800	board of directors acting pursuant to subsection (c), requires
10801	10801	a greater vote or a greater quorum, approval of the plan of
10802	10802	conversion requires (i) the approval of the members entitled
10803	10803	to vote at a meeting at which a quorum exists consisting of a
10804	10804	majority of the votes entitled to be cast on the plan of
10805	10805	conversion, and (ii) the approval of each class of members
10806	10806	voting as a separate voting group at a meeting at which a
10807	10807	quorum of the voting group exists consisting of a majority of
10808	10808	the votes entitled to be cast on the plan of conversion by
10809	10809	that voting group.
10810	10810	5293
10811	10811	5294
10812	10812	5295
10813	10813	5296
10814	10814	5297
10815	10815	5298
10816	10816	5299
10817	10817	5300
10818	10818	5301
10819	10819	5302
10820	10820	5303
10821	10821	5304
10822	10822	5305
10823	10823	5306
10824	10824	5307
10825	10825	5308
10826	10826	5309
10827	10827	5310
10828	10828	5311
10829	10829	5312
10830	10830	5313
10831	10831	5314
10832	10832	5315
10833	10833	5316
10834	10834	5317
10835	10835	5318
10836	10836	5319
10837	10837	5320 SB245 INTRODUCEDSB245 INTRODUCED
10838	10838	Page 191
10839	10839	(f) In addition to the adoption and approval of the
10840	10840	plan of conversion as required by this section, the plan of
10841	10841	conversion must also be approved in writing by a person or
10842	10842	group of persons, if any, whose approval is required under
10843	10843	Section 10A-3A-13.08.
10844	10844	§10A-3A-13.04. Action on a plan of conversion in a
10845	10845	nonmembership nonprofit corporation.
10846	10846	In the case of a conversion of a nonmembership
10847	10847	nonprofit corporation the plan of conversion shall be adopted
10848	10848	in the following manner:
10849	10849	(a) The plan of conversion shall be adopted by the
10850	10850	board of directors; and
10851	10851	(b) A plan of conversion adopted by the board of
10852	10852	directors under this section must also be approved in writing
10853	10853	by a person or group of persons, if any, whose approval is
10854	10854	required under Section 10A-3A-13.08.
10855	10855	§10A-3A-13.05. Statement of conversion; effectiveness.
10856	10856	(a) After a plan of conversion is approved:
10857	10857	(1) if the converting organization is an organization
10858	10858	formed under, or its internal affairs are governed by, the
10859	10859	laws of this state, the converting organization shall file a
10860	10860	statement of conversion in accordance with subsection (c),
10861	10861	which statement of conversion must be signed in accordance
10862	10862	with Section 10A-1-4.01 and which must include:
10863	10863	(A) the name, type of organization, and mailing address
10864	10864	of the principal office of the converting organization, and
10865	10865	its unique identifying number or other designation as assigned
10866	10866	by the Secretary of State, if any;
10867	10867	5321
10868	10868	5322
10869	10869	5323
10870	10870	5324
10871	10871	5325
10872	10872	5326
10873	10873	5327
10874	10874	5328
10875	10875	5329
10876	10876	5330
10877	10877	5331
10878	10878	5332
10879	10879	5333
10880	10880	5334
10881	10881	5335
10882	10882	5336
10883	10883	5337
10884	10884	5338
10885	10885	5339
10886	10886	5340
10887	10887	5341
10888	10888	5342
10889	10889	5343
10890	10890	5344
10891	10891	5345
10892	10892	5346
10893	10893	5347
10894	10894	5348 SB245 INTRODUCEDSB245 INTRODUCED
10895	10895	Page 192
10896	10896	(B) a statement that the converting organization has
10897	10897	been converted into the converted organization;
10898	10898	(C) the name and type of organization of the converted
10899	10899	organization and the jurisdiction of its governing statute;
10900	10900	(D) the street and mailing address of the principal
10901	10901	office of the converted organization;
10902	10902	(E) the date the conversion is effective under the
10903	10903	governing statute of the converted organization;
10904	10904	(F) a statement that the conversion was approved as
10905	10905	required by this chapter;
10906	10906	(G) a statement that the conversion was approved as
10907	10907	required by the governing statute of the converted
10908	10908	organization;
10909	10909	(H) a statement that a copy of the plan of conversion
10910	10910	will be furnished by the converted organization, on request
10911	10911	and without cost, to any owner of the converting organization;
10912	10912	and
10913	10913	(I) if the converted organization is a foreign
10914	10914	organization not authorized to conduct activities and affairs
10915	10915	in this state, the street and mailing address of an office for
10916	10916	the purposes of Section 10A-3A-13.07(b); and
10917	10917	(2) if the converted organization is a nonprofit
10918	10918	corporation, the converting organization shall deliver for
10919	10919	filing a certificate of incorporation in accordance with
10920	10920	subsection (d), which certificate of incorporation must
10921	10921	include, in addition to the information required by Section
10922	10922	10A-3A-2.02:
10923	10923	(A) a statement that the nonprofit corporation was
10924	10924	5349
10925	10925	5350
10926	10926	5351
10927	10927	5352
10928	10928	5353
10929	10929	5354
10930	10930	5355
10931	10931	5356
10932	10932	5357
10933	10933	5358
10934	10934	5359
10935	10935	5360
10936	10936	5361
10937	10937	5362
10938	10938	5363
10939	10939	5364
10940	10940	5365
10941	10941	5366
10942	10942	5367
10943	10943	5368
10944	10944	5369
10945	10945	5370
10946	10946	5371
10947	10947	5372
10948	10948	5373
10949	10949	5374
10950	10950	5375
10951	10951	5376 SB245 INTRODUCEDSB245 INTRODUCED
10952	10952	Page 193
10953	10953	converted from the converting organization;
10954	10954	(B) the name and type of organization of the converting
10955	10955	organization, the jurisdiction of the converting
10956	10956	organization's governing statute, and the converting
10957	10957	organization's unique identifying number or other designation
10958	10958	as assigned by the Secretary of State, if any; and
10959	10959	(C) a statement that the conversion was approved in a
10960	10960	manner that complied with the converting organization's
10961	10961	governing statute.
10962	10962	(b) A conversion becomes effective:
10963	10963	(1) if the converted organization is a nonprofit
10964	10964	corporation, when the certificate of incorporation takes
10965	10965	effect; and
10966	10966	(2) if the converted organization is not a nonprofit
10967	10967	corporation, as provided by the governing statute of the
10968	10968	converted organization.
10969	10969	(c) If the converting organization is an organization
10970	10970	formed under, or its internal affairs are governed by, the
10971	10971	laws of this state, then the converting organization shall
10972	10972	deliver for filing the statement of conversion required under
10973	10973	subsection (a)(1) to the Secretary of State.
10974	10974	(d) If the converted organization is a nonprofit
10975	10975	corporation, then, the converting organization shall deliver
10976	10976	for filing the certificate of incorporation required under
10977	10977	subsection (a)(2) to the Secretary of State.
10978	10978	(e) If the converting organization is required to
10979	10979	deliver for filing a statement of conversion and a certificate
10980	10980	of formation or a certificate of incorporation to the
10981	10981	5377
10982	10982	5378
10983	10983	5379
10984	10984	5380
10985	10985	5381
10986	10986	5382
10987	10987	5383
10988	10988	5384
10989	10989	5385
10990	10990	5386
10991	10991	5387
10992	10992	5388
10993	10993	5389
10994	10994	5390
10995	10995	5391
10996	10996	5392
10997	10997	5393
10998	10998	5394
10999	10999	5395
11000	11000	5396
11001	11001	5397
11002	11002	5398
11003	11003	5399
11004	11004	5400
11005	11005	5401
11006	11006	5402
11007	11007	5403
11008	11008	5404 SB245 INTRODUCEDSB245 INTRODUCED
11009	11009	Page 194
11010	11010	Secretary of State, then the converting organization shall
11011	11011	deliver for filing the statement of conversion and the
11012	11012	certificate of formation or certificate of incorporation to
11013	11013	the Secretary of State simultaneously.
11014	11014	(f) If:
11015	11015	(1) the converting organization is a filing entity or a
11016	11016	foreign filing entity registered to conduct activities and
11017	11017	affairs in this state;
11018	11018	(2) the converted organization will be a filing entity
11019	11019	or a foreign filing entity registered to conduct activities
11020	11020	and affairs in this state;
11021	11021	(3) the name of the converting organization and the
11022	11022	converted organization are to be the same, other than words,
11023	11023	phrases, or abbreviations indicating the type of entity; and
11024	11024	(4) the name of the converted organization complies
11025	11025	with Division A of Article 5 of Chapter 1 or Section
11026	11026	10A-1-7.07, as the case may be; then notwithstanding Division
11027	11027	B of Article 5 of Chapter 1, no name reservation shall be
11028	11028	required and the converted organization shall for all purposes
11029	11029	of this title be entitled to utilize the name of the
11030	11030	converting organization without any further action by the
11031	11031	converting organization or the converted organization.
11032	11032	(g) A certified copy of any document required to be
11033	11033	filed under this section may be filed in the real estate
11034	11034	records in the office of the judge of probate in any county in
11035	11035	which the converting organization owned real property, without
11036	11036	payment and without collection by the judge of probate of any
11037	11037	deed or other transfer tax or fee. The judge of probate shall,
11038	11038	5405
11039	11039	5406
11040	11040	5407
11041	11041	5408
11042	11042	5409
11043	11043	5410
11044	11044	5411
11045	11045	5412
11046	11046	5413
11047	11047	5414
11048	11048	5415
11049	11049	5416
11050	11050	5417
11051	11051	5418
11052	11052	5419
11053	11053	5420
11054	11054	5421
11055	11055	5422
11056	11056	5423
11057	11057	5424
11058	11058	5425
11059	11059	5426
11060	11060	5427
11061	11061	5428
11062	11062	5429
11063	11063	5430
11064	11064	5431
11065	11065	5432 SB245 INTRODUCEDSB245 INTRODUCED
11066	11066	Page 195
11067	11067	however, be entitled to collect a filing fee of five dollars
11068	11068	($5). Any such filing with the judge of probate shall evidence
11069	11069	chain of title, but lack of filing shall not affect the
11070	11070	converted organization's title to such real property.
11071	11071	(h) A statement of conversion is a filing instrument
11072	11072	under Chapter 1.
11073	11073	(i) The filing fees for a statement of conversion shall
11074	11074	be as set forth in Chapter 1.
11075	11075	§10A-3A-13.06. Amendment of plan of conversion;
11076	11076	abandonment.
11077	11077	(a) A plan of conversion of a converting organization
11078	11078	that is a nonprofit corporation may be amended:
11079	11079	(1) in the same manner as the plan was approved, if the
11080	11080	plan does not provide for the manner in which it may be
11081	11081	amended; or
11082	11082	(2) in the manner provided in the plan, except that if
11083	11083	the plan has been approved by the members that were entitled
11084	11084	to vote on, consent to, or approve of the plan, then those
11085	11085	members are entitled to vote on, consent to, or approve of any
11086	11086	amendment of the plan that will change:
11087	11087	(i) the amount or kind of interests, if any, or other
11088	11088	securities, obligations, rights to acquire interests, if any,
11089	11089	or other securities, cash, other property, or any combination
11090	11090	of the foregoing, to be received by the members, if any, of
11091	11091	the converting nonprofit corporation under the plan;
11092	11092	(ii) the organizational documents of the converted
11093	11093	organization that will be in effect immediately after the
11094	11094	conversion becomes effective, except for changes that do not
11095	11095	5433
11096	11096	5434
11097	11097	5435
11098	11098	5436
11099	11099	5437
11100	11100	5438
11101	11101	5439
11102	11102	5440
11103	11103	5441
11104	11104	5442
11105	11105	5443
11106	11106	5444
11107	11107	5445
11108	11108	5446
11109	11109	5447
11110	11110	5448
11111	11111	5449
11112	11112	5450
11113	11113	5451
11114	11114	5452
11115	11115	5453
11116	11116	5454
11117	11117	5455
11118	11118	5456
11119	11119	5457
11120	11120	5458
11121	11121	5459
11122	11122	5460 SB245 INTRODUCEDSB245 INTRODUCED
11123	11123	Page 196
11124	11124	require approval of the interest holders of the converted
11125	11125	organization under its governing statute or organizational
11126	11126	documents; or
11127	11127	(iii) any other terms or conditions of the plan, if the
11128	11128	change would adversely affect the members in any material
11129	11129	respect.
11130	11130	(b) After a plan of conversion has been approved by a
11131	11131	converting organization that is a nonprofit corporation in the
11132	11132	manner required by this article and before the statement of
11133	11133	conversion becomes effective, the plan may be abandoned by the
11134	11134	nonprofit corporation without action by its members, if any,
11135	11135	or a person or group of persons under Section 10A-3A-13.08, in
11136	11136	accordance with any procedures set forth in the plan or, if no
11137	11137	procedures are set forth in the plan, in the manner determined
11138	11138	by the board of directors.
11139	11139	(c) If a conversion is abandoned after the statement of
11140	11140	conversion has been delivered to the Secretary of State for
11141	11141	filing and before the statement of conversion becomes
11142	11142	effective, a statement of abandonment, signed by the
11143	11143	converting organization, must be delivered to the Secretary of
11144	11144	State for filing before the statement of conversion becomes
11145	11145	effective. The statement of abandonment takes effect on
11146	11146	filing, and the conversion is abandoned and does not become
11147	11147	effective. The statement of abandonment must contain:
11148	11148	(1) the name of the converting organization;
11149	11149	(2) the date on which the statement of conversion was
11150	11150	filed by the Secretary of State; and
11151	11151	(3) a statement that the conversion has been abandoned
11152	11152	5461
11153	11153	5462
11154	11154	5463
11155	11155	5464
11156	11156	5465
11157	11157	5466
11158	11158	5467
11159	11159	5468
11160	11160	5469
11161	11161	5470
11162	11162	5471
11163	11163	5472
11164	11164	5473
11165	11165	5474
11166	11166	5475
11167	11167	5476
11168	11168	5477
11169	11169	5478
11170	11170	5479
11171	11171	5480
11172	11172	5481
11173	11173	5482
11174	11174	5483
11175	11175	5484
11176	11176	5485
11177	11177	5486
11178	11178	5487
11179	11179	5488 SB245 INTRODUCEDSB245 INTRODUCED
11180	11180	Page 197
11181	11181	in accordance with this section.
11182	11182	§10A-3A-13.07. Effect of conversion.
11183	11183	(a) When a conversion takes effect:
11184	11184	(1) all property and contract rights owned by the
11185	11185	converting organization remain vested in the converted
11186	11186	organization without transfer, reversion, or impairment, and
11187	11187	the title to any property vested by deed or otherwise in the
11188	11188	converting organization shall not revert or be in any way
11189	11189	impaired by reason of the conversion;
11190	11190	(2) all debts, obligations, or other liabilities of the
11191	11191	converting organization continue as debts, obligations, or
11192	11192	other liabilities of the converted organization and neither
11193	11193	the rights of creditors, nor the liens upon the property of
11194	11194	the converting organization shall be impaired by the
11195	11195	conversion;
11196	11196	(3) an action or proceeding pending by or against the
11197	11197	converting organization continues as if the conversion had not
11198	11198	occurred and the name of the converted organization may, but
11199	11199	need not, be substituted for the name of the converting
11200	11200	organization in any pending action or proceeding;
11201	11201	(4) except as prohibited by law other than this
11202	11202	chapter, all of the rights, privileges, immunities, powers,
11203	11203	and purposes of the converting organization remain vested in
11204	11204	the converted organization;
11205	11205	(5) except as otherwise provided in the plan of
11206	11206	conversion, the terms and conditions of the plan of conversion
11207	11207	take effect;
11208	11208	(6) except as otherwise agreed, for all purposes of the
11209	11209	5489
11210	11210	5490
11211	11211	5491
11212	11212	5492
11213	11213	5493
11214	11214	5494
11215	11215	5495
11216	11216	5496
11217	11217	5497
11218	11218	5498
11219	11219	5499
11220	11220	5500
11221	11221	5501
11222	11222	5502
11223	11223	5503
11224	11224	5504
11225	11225	5505
11226	11226	5506
11227	11227	5507
11228	11228	5508
11229	11229	5509
11230	11230	5510
11231	11231	5511
11232	11232	5512
11233	11233	5513
11234	11234	5514
11235	11235	5515
11236	11236	5516 SB245 INTRODUCEDSB245 INTRODUCED
11237	11237	Page 198
11238	11238	laws of this state, the converting organization shall not be
11239	11239	required to wind up its affairs or pay its liabilities and
11240	11240	distribute its assets, and the conversion shall not be deemed
11241	11241	to constitute a dissolution of the converting organization;
11242	11242	(7) for all purposes of the laws of this state, the
11243	11243	rights, privileges, powers, interests in property, debts,
11244	11244	liabilities, and duties of the converting organization, shall
11245	11245	be the rights, privileges, powers, interests in property,
11246	11246	debts, liabilities, and duties of the converted organization,
11247	11247	and shall not be deemed as a consequence of the conversion, to
11248	11248	have been transferred to the converted organization;
11249	11249	(8) if the converted organization is a nonprofit
11250	11250	corporation, for all purposes of the laws of this state, the
11251	11251	nonprofit corporation shall be deemed to be the same
11252	11252	organization as the converting organization, and the
11253	11253	conversion shall constitute a continuation of the existence of
11254	11254	the converting organization in the form of a nonprofit
11255	11255	corporation;
11256	11256	(9) if the converted organization is a nonprofit
11257	11257	corporation, the existence of the nonprofit corporation shall
11258	11258	be deemed to have commenced on the date the converting
11259	11259	organization commenced its existence in the jurisdiction in
11260	11260	which the converting organization was first created, formed,
11261	11261	organized, incorporated, or otherwise came into being;
11262	11262	(10) the conversion shall not affect the choice of law
11263	11263	applicable to matters arising prior to conversion;
11264	11264	(11) if the Secretary of State has assigned a unique
11265	11265	identifying number or other designation to the converting
11266	11266	5517
11267	11267	5518
11268	11268	5519
11269	11269	5520
11270	11270	5521
11271	11271	5522
11272	11272	5523
11273	11273	5524
11274	11274	5525
11275	11275	5526
11276	11276	5527
11277	11277	5528
11278	11278	5529
11279	11279	5530
11280	11280	5531
11281	11281	5532
11282	11282	5533
11283	11283	5534
11284	11284	5535
11285	11285	5536
11286	11286	5537
11287	11287	5538
11288	11288	5539
11289	11289	5540
11290	11290	5541
11291	11291	5542
11292	11292	5543
11293	11293	5544 SB245 INTRODUCEDSB245 INTRODUCED
11294	11294	Page 199
11295	11295	organization and (i) the converted organization is formed
11296	11296	pursuant to, or its internal affairs are governed by, the laws
11297	11297	of this state, or (ii) the converted organization is, within
11298	11298	30 days after the effective date of the conversion, registered
11299	11299	to transact business in this state, then that unique
11300	11300	identifying number or other designation shall continue to be
11301	11301	assigned to the converted organization; and
11302	11302	(12) the interests, if any, of the converting
11303	11303	organization are reclassified into interests or other
11304	11304	securities, obligations, rights to acquire interests or other
11305	11305	securities, cash, or other property in accordance with the
11306	11306	terms of the conversion, and the interest holders, if any, of
11307	11307	the converting organization are entitled only to the rights
11308	11308	provided to them by those terms and to any rights they may
11309	11309	have under the governing statute of the converting
11310	11310	organization.
11311	11311	(b) A converted organization that is a foreign entity
11312	11312	consents to the jurisdiction of the courts of this state to
11313	11313	enforce any debt, obligation, or other liability for which the
11314	11314	converting nonprofit corporation, is liable if, before the
11315	11315	conversion, the converting nonprofit corporation was subject
11316	11316	to suit in this state on the debt, obligation, or other
11317	11317	liability. If a converted organization is a foreign entity and
11318	11318	fails to designate or maintain a registered agent, or the
11319	11319	designated registered agent cannot with reasonable diligence
11320	11320	be served, then service of process on that converted
11321	11321	organization for the purposes of enforcing a debt, obligation,
11322	11322	or other liability under this subsection may be made in the
11323	11323	5545
11324	11324	5546
11325	11325	5547
11326	11326	5548
11327	11327	5549
11328	11328	5550
11329	11329	5551
11330	11330	5552
11331	11331	5553
11332	11332	5554
11333	11333	5555
11334	11334	5556
11335	11335	5557
11336	11336	5558
11337	11337	5559
11338	11338	5560
11339	11339	5561
11340	11340	5562
11341	11341	5563
11342	11342	5564
11343	11343	5565
11344	11344	5566
11345	11345	5567
11346	11346	5568
11347	11347	5569
11348	11348	5570
11349	11349	5571
11350	11350	5572 SB245 INTRODUCEDSB245 INTRODUCED
11351	11351	Page 200
11352	11352	same manner and has the same consequences as provided in
11353	11353	Section 10A-1-5.35.
11354	11354	§10A-3A-13.08. Approval by specified person or group of
11355	11355	persons.
11356	11356	(a) The certificate of incorporation of a membership
11357	11357	nonprofit corporation may require that a conversion under this
11358	11358	article or under Article 8 of Chapter 1 be approved in writing
11359	11359	by a specified person or group of persons in addition to the
11360	11360	board of directors and members.
11361	11361	(b) The certificate of incorporation of a nonmembership
11362	11362	nonprofit corporation may require that a conversion under this
11363	11363	article or under Article 8 of Chapter 1 be approved in writing
11364	11364	by a specified person or group of persons in addition to the
11365	11365	board of directors.
11366	11366	(c) A requirement in the certificate of incorporation
11367	11367	described in subsections (a) or (b) of this section may only
11368	11368	be approved by the written approval of the specified person or
11369	11369	group of persons.
11370	11370	§10A-3A-13.09. Nonexclusive.
11371	11371	This article is not exclusive. This article does not
11372	11372	preclude a nonprofit corporation from converting under law
11373	11373	other than this chapter.
11374	11374	ARTICLE 14. TRANSITIONAL PROVISIONS.
11375	11375	§10A-3A-14.01. Application to existing nonprofit
11376	11376	corporations.
11377	11377	(a) Before January 1, 2025, this chapter governs only:
11378	11378	(1) a nonprofit corporation incorporated on or after
11379	11379	January 1, 2024; and
11380	11380	5573
11381	11381	5574
11382	11382	5575
11383	11383	5576
11384	11384	5577
11385	11385	5578
11386	11386	5579
11387	11387	5580
11388	11388	5581
11389	11389	5582
11390	11390	5583
11391	11391	5584
11392	11392	5585
11393	11393	5586
11394	11394	5587
11395	11395	5588
11396	11396	5589
11397	11397	5590
11398	11398	5591
11399	11399	5592
11400	11400	5593
11401	11401	5594
11402	11402	5595
11403	11403	5596
11404	11404	5597
11405	11405	5598
11406	11406	5599
11407	11407	5600 SB245 INTRODUCEDSB245 INTRODUCED
11408	11408	Page 201
11409	11409	(2) a nonprofit corporation incorporated before January
11410	11410	1, 2024, which elects, by amending or restating that nonprofit
11411	11411	corporation's certificate of incorporation, to be governed by
11412	11412	this chapter.
11413	11413	(b) On and after January 1, 2025, this chapter governs
11414	11414	all existing nonprofit corporations incorporated under:
11415	11415	(1) any general or special law of this state providing
11416	11416	for the incorporation of nonprofit corporations for a purpose
11417	11417	or purposes for which a nonprofit corporation might be
11418	11418	incorporated under this chapter, where the power has been
11419	11419	reserved to amend, repeal, or modify the law under which the
11420	11420	nonprofit corporation was incorporated; and
11421	11421	(2) any predecessor statute hereto.
11422	11422	(c) For purposes of applying this chapter to a
11423	11423	nonprofit corporation incorporated before January 1, 2024:
11424	11424	(1) the nonprofit corporation is not required to amend
11425	11425	its certificate of incorporation to comply with Section
11426	11426	10A-3A-2.02(a)(5); but once amended or restated, the
11427	11427	certificate of incorporation must comply with Section
11428	11428	10A-3A-2.02(a)(5);
11429	11429	(2) if on December 31, 2023, the certificate of
11430	11430	incorporation or bylaws of a nonprofit corporation in
11431	11431	existence on that date provides members with the right to
11432	11432	cumulate their votes for the election of directors, that right
11433	11433	to cumulate their votes shall continue unless the certificate
11434	11434	of incorporation or bylaws of the nonprofit corporation are
11435	11435	amended to deny that right. Notwithstanding the foregoing, no
11436	11436	such members may cumulate their votes for the election of
11437	11437	5601
11438	11438	5602
11439	11439	5603
11440	11440	5604
11441	11441	5605
11442	11442	5606
11443	11443	5607
11444	11444	5608
11445	11445	5609
11446	11446	5610
11447	11447	5611
11448	11448	5612
11449	11449	5613
11450	11450	5614
11451	11451	5615
11452	11452	5616
11453	11453	5617
11454	11454	5618
11455	11455	5619
11456	11456	5620
11457	11457	5621
11458	11458	5622
11459	11459	5623
11460	11460	5624
11461	11461	5625
11462	11462	5626
11463	11463	5627
11464	11464	5628 SB245 INTRODUCEDSB245 INTRODUCED
11465	11465	Page 202
11466	11466	directors by utilizing an action by written consent.
11467	11467	(3) the nonprofit corporation's incorporation document,
11468	11468	whether a certificate of incorporation, certificate of
11469	11469	formation, charter, or articles of incorporation is deemed to
11470	11470	be the nonprofit corporation's certificate of incorporation;
11471	11471	(4) the nonprofit corporation's bylaws are deemed to be
11472	11472	the nonprofit corporation's bylaws;
11473	11473	(5) any amendment or restatement of a nonprofit
11474	11474	corporation's certificate of incorporation or bylaws on or
11475	11475	after January 1, 2024, shall conform with this chapter; and
11476	11476	(d) No nonprofit corporation may be incorporated after
11477	11477	December 31, 2023, pursuant to Sections 10A-3-1.01 to
11478	11478	10A-3-8.02, inclusive.
11479	11479	§10-3A-14.02. Application to existing foreign nonprofit
11480	11480	corporations.
11481	11481	A foreign nonprofit corporation registered or
11482	11482	authorized to transact business in this state on January 1,
11483	11483	2024, is subject to this chapter and is deemed to be
11484	11484	registered to transact business in this state, and is not
11485	11485	required to renew its registration to transact business under
11486	11486	Article 7 of Chapter 1, except as required by Article 7 of
11487	11487	Chapter 1.
11488	11488	§10A-3A-14.03. Saving Provisions.
11489	11489	(a) Except as provided in subsection (b), the repeal of
11490	11490	a statute by this chapter does not affect:
11491	11491	(1) the operation of the statute or any action taken
11492	11492	under it before its repeal;
11493	11493	(2) any ratification, right, remedy, privilege,
11494	11494	5629
11495	11495	5630
11496	11496	5631
11497	11497	5632
11498	11498	5633
11499	11499	5634
11500	11500	5635
11501	11501	5636
11502	11502	5637
11503	11503	5638
11504	11504	5639
11505	11505	5640
11506	11506	5641
11507	11507	5642
11508	11508	5643
11509	11509	5644
11510	11510	5645
11511	11511	5646
11512	11512	5647
11513	11513	5648
11514	11514	5649
11515	11515	5650
11516	11516	5651
11517	11517	5652
11518	11518	5653
11519	11519	5654
11520	11520	5655
11521	11521	5656 SB245 INTRODUCEDSB245 INTRODUCED
11522	11522	Page 203
11523	11523	obligation, or liability acquired, accrued, or incurred under
11524	11524	the statute before its repeal;
11525	11525	(3) any violation of the statute, or any penalty,
11526	11526	forfeiture, or punishment incurred because of the violation
11527	11527	before its repeal; or
11528	11528	(4) any proceeding, reorganization, or dissolution
11529	11529	commenced under the statute before its repeal, and the
11530	11530	proceeding, reorganization, or dissolution may be completed in
11531	11531	accordance with the statute as if it had not been repealed.
11532	11532	(b) If a penalty or punishment imposed for violation of
11533	11533	a statute repealed by this chapter is reduced by this chapter,
11534	11534	the penalty or punishment, if not already imposed, shall be
11535	11535	imposed in accordance with this chapter.
11536	11536	§10A-3A-14.04. Severability.
11537	11537	If any provision of this chapter or its application to
11538	11538	any person or circumstance is held invalid by a court of
11539	11539	competent jurisdiction, the invalidity does not affect other
11540	11540	provisions or applications of this chapter that can be given
11541	11541	effect without the invalid provision or application, and to
11542	11542	this end the provisions of this chapter are severable.
11543	11543	§10A-3A-14.05. Relation to electronic signatures in
11544	11544	global and national commerce act.
11545	11545	This chapter modifies, limits, and supersedes the
11546	11546	Federal Electronic Signatures in Global and National Commerce
11547	11547	Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or
11548	11548	supersede Section 101(c) of that act, 15 U.S.C. § 7001(c), or
11549	11549	authorize electronic delivery of any of the notices described
11550	11550	in Section 103(b) of that act, 15 U.S.C. § 7003(b).
11551	11551	§10A-3A-14.06. Interstate application.
11552	11552	5657
11553	11553	5658
11554	11554	5659
11555	11555	5660
11556	11556	5661
11557	11557	5662
11558	11558	5663
11559	11559	5664
11560	11560	5665
11561	11561	5666
11562	11562	5667
11563	11563	5668
11564	11564	5669
11565	11565	5670
11566	11566	5671
11567	11567	5672
11568	11568	5673
11569	11569	5674
11570	11570	5675
11571	11571	5676
11572	11572	5677
11573	11573	5678
11574	11574	5679
11575	11575	5680
11576	11576	5681
11577	11577	5682
11578	11578	5683
11579	11579	5684
11580	11580	5685 SB245 INTRODUCEDSB245 INTRODUCED
11581	11581	Page 204
11582	11582	A nonprofit corporation formed and existing under this
11583	11583	chapter may conduct its activities and affairs, carry on its
11584	11584	operations, and have and exercise the powers granted by this
11585	11585	chapter in any state, foreign country, or other jurisdiction.
11586	11586	Section 2. Sections 10A-1-1.03, 10A-1-1.08, 10A-1-3.32,
11587	11587	10A-1-8.01, 10A-1-8.02, and 10A-1-9.01 of the Code of Alabama
11588	11588	1975, are amended to read as follows:
11589	11589	"§10A-1-1.03
11590	11590	(a) If a term, including a term that is defined in
11591	11591	subsection (b) of this section, is defined in a chapter of
11592	11592	this title, then, when used in that chapter, the term shall
11593	11593	have the meaning set forth in that chapter.
11594	11594	(b) As used in this title, except as provided in
11595	11595	subsection (a) of this section or where the context otherwise
11596	11596	requires, the following terms mean:
11597	11597	(1) AFFILIATE. A person who controls, is controlled by,
11598	11598	or is under common control with another person. An affiliate
11599	11599	of an individual includes the spouse, or a parent or sibling
11600	11600	thereof, of the individual, or a child, grandchild, sibling,
11601	11601	parent, or spouse of any thereof, of the individual, or an
11602	11602	individual having the same home as the individual, or a trust
11603	11603	or estate of which an individual specified in this sentence is
11604	11604	a substantial beneficiary; a trust, estate, incompetent,
11605	11605	conservatee, protected person, or minor of which the
11606	11606	individual is a fiduciary; or an entity of which the
11607	11607	individual is director, general partner, agent, employee or
11608	11608	the governing authority or member of the governing authority.
11609	11609	(2) ASSOCIATE. When used to indicate a relationship
11610	11610	5686
11611	11611	5687
11612	11612	5688
11613	11613	5689
11614	11614	5690
11615	11615	5691
11616	11616	5692
11617	11617	5693
11618	11618	5694
11619	11619	5695
11620	11620	5696
11621	11621	5697
11622	11622	5698
11623	11623	5699
11624	11624	5700
11625	11625	5701
11626	11626	5702
11627	11627	5703
11628	11628	5704
11629	11629	5705
11630	11630	5706
11631	11631	5707
11632	11632	5708
11633	11633	5709
11634	11634	5710
11635	11635	5711
11636	11636	5712
11637	11637	5713 SB245 INTRODUCEDSB245 INTRODUCED
11638	11638	Page 205
11639	11639	with:
11640	11640	(A) a domestic or foreign entity for which the person
11641	11641	is:
11642	11642	(i) an officer or governing person; or
11643	11643	(ii) a beneficial owner of 10 percent or more of a
11644	11644	class of voting ownership interests or similar securities of
11645	11645	the entity;
11646	11646	(B) a trust or estate in which the person has a
11647	11647	substantial beneficial interest or for which the person serves
11648	11648	as trustee or in a similar fiduciary capacity;
11649	11649	(C) the person's spouse or a relative of the person
11650	11650	related by consanguinity or affinity within the fifth degree
11651	11651	who resides with the person; or
11652	11652	(D) a governing person or an affiliate or officer of
11653	11653	the person.
11654	11654	(3) ASSOCIATION. Includes, but is not limited to, an
11655	11655	unincorporated nonprofit association as defined in Chapter 17
11656	11656	and an unincorporated professional association as defined in
11657	11657	Article 1 of Chapter 30.
11658	11658	(4) BENEFIT CORPORATION. A benefit corporation as
11659	11659	defined in Chapter 2A.
11660	11660	(5) BUSINESS CORPORATION. A corporation or foreign
11661	11661	corporation as defined in Chapter 2A. The term includes a
11662	11662	benefit corporation as defined in Chapter 2A.
11663	11663	(6) BUSINESS TRUST. A business trust as defined in
11664	11664	Chapter 16.
11665	11665	(7) CERTIFICATE OF DISSOLUTION. Any document such as a
11666	11666	certificate of dissolution, statement of dissolution, or
11667	11667	5714
11668	11668	5715
11669	11669	5716
11670	11670	5717
11671	11671	5718
11672	11672	5719
11673	11673	5720
11674	11674	5721
11675	11675	5722
11676	11676	5723
11677	11677	5724
11678	11678	5725
11679	11679	5726
11680	11680	5727
11681	11681	5728
11682	11682	5729
11683	11683	5730
11684	11684	5731
11685	11685	5732
11686	11686	5733
11687	11687	5734
11688	11688	5735
11689	11689	5736
11690	11690	5737
11691	11691	5738
11692	11692	5739
11693	11693	5740
11694	11694	5741 SB245 INTRODUCEDSB245 INTRODUCED
11695	11695	Page 206
11696	11696	articles of dissolution, required or permitted to be filed
11697	11697	publicly with respect to an entity's dissolution and winding
11698	11698	up of its business, activity, activities, not for profit
11699	11699	activity, or affairs.
11700	11700	(8) CERTIFICATE OF FORMATION.
11701	11701	(A) The document required to be filed publicly under
11702	11702	this title to form a filing entity; and
11703	11703	(B) if appropriate, a restated certificate of formation
11704	11704	and all amendments of an original or restated certificate of
11705	11705	formation; provided that a restated certificate of formation
11706	11706	and an amendment of an original or restated certificate of
11707	11707	formation shall not be deemed to be a certificate of formation
11708	11708	for purposes of Section 10A-1-4.31 .
11709	11709	(9) CERTIFICATE OF OWNERSHIP. An instrument evidencing
11710	11710	an ownership interest or membership interest in an entity.
11711	11711	(10) CERTIFICATED OWNERSHIP INTEREST. An ownership
11712	11712	interest of a domestic entity represented by a certificate.
11713	11713	(11) CERTIFICATION or CERTIFIED. Duly authenticated by
11714	11714	the proper officer or filing officer of the jurisdiction the
11715	11715	laws of which govern the internal affairs of an entity.
11716	11716	(12) CONTRIBUTION. A tangible or intangible benefit
11717	11717	that a person transfers to an entity in consideration for an
11718	11718	ownership interest in the entity or otherwise in the person's
11719	11719	capacity as an owner or a member. A benefit that may
11720	11720	constitute a contribution transferred in exchange for an
11721	11721	ownership interest or transferred in the transferor's capacity
11722	11722	as an owner or member may include cash, property, services
11723	11723	rendered, a contract for services to be performed, a
11724	11724	5742
11725	11725	5743
11726	11726	5744
11727	11727	5745
11728	11728	5746
11729	11729	5747
11730	11730	5748
11731	11731	5749
11732	11732	5750
11733	11733	5751
11734	11734	5752
11735	11735	5753
11736	11736	5754
11737	11737	5755
11738	11738	5756
11739	11739	5757
11740	11740	5758
11741	11741	5759
11742	11742	5760
11743	11743	5761
11744	11744	5762
11745	11745	5763
11746	11746	5764
11747	11747	5765
11748	11748	5766
11749	11749	5767
11750	11750	5768
11751	11751	5769 SB245 INTRODUCEDSB245 INTRODUCED
11752	11752	Page 207
11753	11753	promissory note or other obligation of a person to pay cash or
11754	11754	transfer property to the entity, or securities or other
11755	11755	interests in or obligations of an entity. In either case, the
11756	11756	benefit does not include cash or property received by the
11757	11757	entity:
11758	11758	(A) with respect to a promissory note or other
11759	11759	obligation to the extent that the agreed value of the note or
11760	11760	obligation has previously been included as a contribution; or
11761	11761	(B) that the person intends to be a loan to the entity.
11762	11762	(13) CONVERSION. A conversion, whether referred to as a
11763	11763	conversion, domestication, or otherwise, means:
11764	11764	(A) the continuance of a domestic entity as a foreign
11765	11765	entity of any type;
11766	11766	(B) the continuance of a foreign entity as a domestic
11767	11767	entity of any type; or
11768	11768	(C) the continuance of a domestic entity of one type as
11769	11769	a domestic entity of another type.
11770	11770	(14) CONVERTED ENTITY. An entity resulting from a
11771	11771	conversion.
11772	11772	(15) CONVERTING ENTITY. An entity as the entity existed
11773	11773	before the entity's conversion.
11774	11774	(16) COOPERATIVE. Includes an employee cooperative as
11775	11775	defined in Chapter 11.
11776	11776	(17) CORPORATION. Includes a domestic or foreign
11777	11777	business corporation, including a benefit corporation, as
11778	11778	defined in Chapter 2A, a domestic or foreign nonprofit
11779	11779	corporation as defined in Chapter 3 or Chapter 3A, a domestic
11780	11780	or foreign professional corporation as defined in Chapter 4,
11781	11781	5770
11782	11782	5771
11783	11783	5772
11784	11784	5773
11785	11785	5774
11786	11786	5775
11787	11787	5776
11788	11788	5777
11789	11789	5778
11790	11790	5779
11791	11791	5780
11792	11792	5781
11793	11793	5782
11794	11794	5783
11795	11795	5784
11796	11796	5785
11797	11797	5786
11798	11798	5787
11799	11799	5788
11800	11800	5789
11801	11801	5790
11802	11802	5791
11803	11803	5792
11804	11804	5793
11805	11805	5794
11806	11806	5795
11807	11807	5796
11808	11808	5797 SB245 INTRODUCEDSB245 INTRODUCED
11809	11809	Page 208
11810	11810	and those entities specified in Chapter 20 as corporate.
11811	11811	(18) COURT. The designated court, and if none, the
11812	11812	circuit court specifically set forth in this title, and if
11813	11813	none, any other court having jurisdiction in a case.
11814	11814	(19) DAY. When used in the computation of time,
11815	11815	excludes the first day and includes the last day of the period
11816	11816	so computed, unless the last day is a Saturday, Sunday, or
11817	11817	legal holiday, in which event the period runs until the end of
11818	11818	the next day that is not a Saturday, a Sunday, or a legal
11819	11819	holiday. When the period of time to be computed is less than 7
11820	11820	days, intermediate Saturdays, Sundays, and legal holidays
11821	11821	shall be excluded.
11822	11822	(20) DEBTOR IN BANKRUPTCY. A person who is the subject
11823	11823	of:
11824	11824	(A) an order for relief under the United States
11825	11825	bankruptcy laws, Title 11, United States Code, or comparable
11826	11826	order under a successor statute of general application; or
11827	11827	(B) a comparable order under federal, state, or foreign
11828	11828	law governing insolvency.
11829	11829	(21) DESIGNATED COURT. The court or courts that are
11830	11830	designated in the (i) certificate of incorporation or bylaws
11831	11831	of a corporation as authorized by Chapter 2A, (ii) certificate
11832	11832	of incorporation or bylaws of a nonprofit corporation as
11833	11833	authorized by Chapter 3A, (iii) limited liability company
11834	11834	agreement of a limited liability company formed pursuant to or
11835	11835	governed by Chapter 5A, (iii)(iv) partnership agreement of a
11836	11836	partnership formed pursuant to or governed by Chapter 8A, or
11837	11837	(iv)(v) limited partnership agreement of a limited partnership
11838	11838	5798
11839	11839	5799
11840	11840	5800
11841	11841	5801
11842	11842	5802
11843	11843	5803
11844	11844	5804
11845	11845	5805
11846	11846	5806
11847	11847	5807
11848	11848	5808
11849	11849	5809
11850	11850	5810
11851	11851	5811
11852	11852	5812
11853	11853	5813
11854	11854	5814
11855	11855	5815
11856	11856	5816
11857	11857	5817
11858	11858	5818
11859	11859	5819
11860	11860	5820
11861	11861	5821
11862	11862	5822
11863	11863	5823
11864	11864	5824
11865	11865	5825 SB245 INTRODUCEDSB245 INTRODUCED
11866	11866	Page 209
11867	11867	formed pursuant to or governed by Chapter 9A.
11868	11868	(22) DIRECTOR. An individual who serves on the board of
11869	11869	directors, by whatever name known, of a foreign or domestic
11870	11870	corporation.
11871	11871	(23) DISTRIBUTION. A transfer of property, including
11872	11872	cash, from an entity to an owner or member of the entity in
11873	11873	the owner's or member's capacity as an owner or member. The
11874	11874	term includes a dividend, a redemption or purchase of an
11875	11875	ownership interest, or a liquidating distribution.
11876	11876	(24) DOMESTIC. With respect to an entity, means
11877	11877	governed as to its internal affairs by this title.
11878	11878	(25) DOMESTIC ENTITY. An entity governed as to its
11879	11879	internal affairs by this title.
11880	11880	(26) EFFECTIVE DATE OF THIS TITLE. January 1, 2011.
11881	11881	(27) ELECTRONIC. Relating to technology having
11882	11882	electrical, digital, magnetic, wireless, optical,
11883	11883	electromagnetic, or similar capabilities.
11884	11884	(28) ELECTRONIC SIGNATURE. An electronic signature as
11885	11885	that term is defined in the Alabama Electronic Transactions
11886	11886	Act, Chapter 1A of Title 8, or any successor statute.
11887	11887	(29) ELECTRONIC TRANSMISSION or ELECTRONICALLY
11888	11888	TRANSMITTED. Any form or process of communication not directly
11889	11889	involving the physical transfer of paper or another tangible
11890	11890	medium, which (i) is suitable for the retention, retrieval,
11891	11891	and reproduction of information by the recipient, and (ii) is
11892	11892	retrievable in paper form by the recipient through an
11893	11893	automated process used in conventional commercial practice.
11894	11894	(30) ELECTRONIC WRITING. Information that is stored in
11895	11895	5826
11896	11896	5827
11897	11897	5828
11898	11898	5829
11899	11899	5830
11900	11900	5831
11901	11901	5832
11902	11902	5833
11903	11903	5834
11904	11904	5835
11905	11905	5836
11906	11906	5837
11907	11907	5838
11908	11908	5839
11909	11909	5840
11910	11910	5841
11911	11911	5842
11912	11912	5843
11913	11913	5844
11914	11914	5845
11915	11915	5846
11916	11916	5847
11917	11917	5848
11918	11918	5849
11919	11919	5850
11920	11920	5851
11921	11921	5852
11922	11922	5853 SB245 INTRODUCEDSB245 INTRODUCED
11923	11923	Page 210
11924	11924	an electronic or other nontangible medium and is retrievable
11925	11925	in paper form through an automated process used in
11926	11926	conventional commercial practice.
11927	11927	(31) ENTITY. A domestic or foreign organization.
11928	11928	(32) FILING ENTITY. A domestic entity that is a
11929	11929	corporation, limited partnership, limited liability limited
11930	11930	partnership, limited liability company, professional
11931	11931	association, employee cooperative corporation, or real estate
11932	11932	investment trust.
11933	11933	(33) FILING INSTRUMENT. An instrument, document, or
11934	11934	statement that is required or permitted by this title to be
11935	11935	delivered for filing by or for an entity to a filing officer.
11936	11936	(34) FILING OFFICER. An officer of this state with whom
11937	11937	a filing instrument is required or permitted to be delivered
11938	11938	for filing pursuant to this title.
11939	11939	(35) FOREIGN. With respect to an entity, means governed
11940	11940	as to its internal affairs by the laws of a jurisdiction other
11941	11941	than this state.
11942	11942	(36) FOREIGN ENTITY. An entity governed as to its
11943	11943	internal affairs by the laws of a jurisdiction other than this
11944	11944	state.
11945	11945	(37) FOREIGN FILING ENTITY. A foreign entity that
11946	11946	registers or is required to register as a foreign entity under
11947	11947	Article 7.
11948	11948	(38) FOREIGN GOVERNMENTAL AUTHORITY. A governmental
11949	11949	official, agency, or instrumentality of a jurisdiction other
11950	11950	than this state.
11951	11951	(39) FOREIGN NONFILING ENTITY. A foreign entity that is
11952	11952	5854
11953	11953	5855
11954	11954	5856
11955	11955	5857
11956	11956	5858
11957	11957	5859
11958	11958	5860
11959	11959	5861
11960	11960	5862
11961	11961	5863
11962	11962	5864
11963	11963	5865
11964	11964	5866
11965	11965	5867
11966	11966	5868
11967	11967	5869
11968	11968	5870
11969	11969	5871
11970	11970	5872
11971	11971	5873
11972	11972	5874
11973	11973	5875
11974	11974	5876
11975	11975	5877
11976	11976	5878
11977	11977	5879
11978	11978	5880
11979	11979	5881 SB245 INTRODUCEDSB245 INTRODUCED
11980	11980	Page 211
11981	11981	not a foreign filing entity.
11982	11982	(40) GENERAL PARTNER.
11983	11983	(A) Each partner in a general partnership; or
11984	11984	(B) a person who is admitted to a limited partnership
11985	11985	as a general partner in accordance with the governing
11986	11986	documents of the limited partnership.
11987	11987	(41) GENERAL PARTNERSHIP. A partnership as defined in
11988	11988	Chapter 8A. The term includes a limited liability partnership
11989	11989	as defined in Chapter 8A.
11990	11990	(42) GOVERNING AUTHORITY. A person or group of persons
11991	11991	who are entitled to manage and direct the affairs of an entity
11992	11992	pursuant to this title and the governing documents of the
11993	11993	entity, except that if the governing documents of the entity
11994	11994	or this title divide the authority to manage and direct the
11995	11995	affairs of the entity among different persons or groups of
11996	11996	persons according to different matters, governing authority
11997	11997	means the person or group of persons entitled to manage and
11998	11998	direct the affairs of the entity with respect to a matter
11999	11999	under the governing documents of the entity or this title. The
12000	12000	term includes the board of directors of a corporation, by
12001	12001	whatever name known, or other persons authorized to perform
12002	12002	the functions of the board of directors of a corporation, the
12003	12003	general partners of a general partnership or limited
12004	12004	partnership, the persons who have direction and oversight of a
12005	12005	limited liability company, and the trust managers of a real
12006	12006	estate investment trust. The term does not include an officer
12007	12007	who is acting in the capacity of an officer.
12008	12008	(43) GOVERNING DOCUMENTS.
12009	12009	5882
12010	12010	5883
12011	12011	5884
12012	12012	5885
12013	12013	5886
12014	12014	5887
12015	12015	5888
12016	12016	5889
12017	12017	5890
12018	12018	5891
12019	12019	5892
12020	12020	5893
12021	12021	5894
12022	12022	5895
12023	12023	5896
12024	12024	5897
12025	12025	5898
12026	12026	5899
12027	12027	5900
12028	12028	5901
12029	12029	5902
12030	12030	5903
12031	12031	5904
12032	12032	5905
12033	12033	5906
12034	12034	5907
12035	12035	5908
12036	12036	5909 SB245 INTRODUCEDSB245 INTRODUCED
12037	12037	Page 212
12038	12038	(A) In the case of a domestic entity:
12039	12039	(i) the certificate of formation for a filing entity or
12040	12040	the document or agreement under which a nonfiling entity is
12041	12041	formed; and
12042	12042	(ii) the other documents or agreements, including
12043	12043	bylaws, partnership agreements of partnerships, limited
12044	12044	liability company agreements of limited liability companies,
12045	12045	or similar documents, adopted by the entity pursuant to this
12046	12046	title to govern the formation or the internal affairs of the
12047	12047	entity; or
12048	12048	(B) in the case of a foreign entity, the instruments,
12049	12049	documents, or agreements adopted under the law of its
12050	12050	jurisdiction of formation to govern the formation or the
12051	12051	internal affairs of the entity.
12052	12052	(44) GOVERNING PERSON. A person serving as part of the
12053	12053	governing authority of an entity.
12054	12054	(45) INDIVIDUAL. A natural person and the estate of an
12055	12055	incompetent or deceased natural person.
12056	12056	(46) INSOLVENCY. The inability of a person to pay the
12057	12057	person's debts as they become due in the usual course of
12058	12058	business or affairs.
12059	12059	(47) INSOLVENT. A person who is unable to pay the
12060	12060	person's debts as they become due in the usual course of
12061	12061	business or affairs.
12062	12062	(48) JUDGE OF PROBATE. The judge of probate of the
12063	12063	county in which an entity is required or permitted to deliver
12064	12064	a filing instrument for filing pursuant to this title.
12065	12065	(49) JURISDICTION OF FORMATION.
12066	12066	5910
12067	12067	5911
12068	12068	5912
12069	12069	5913
12070	12070	5914
12071	12071	5915
12072	12072	5916
12073	12073	5917
12074	12074	5918
12075	12075	5919
12076	12076	5920
12077	12077	5921
12078	12078	5922
12079	12079	5923
12080	12080	5924
12081	12081	5925
12082	12082	5926
12083	12083	5927
12084	12084	5928
12085	12085	5929
12086	12086	5930
12087	12087	5931
12088	12088	5932
12089	12089	5933
12090	12090	5934
12091	12091	5935
12092	12092	5936
12093	12093	5937 SB245 INTRODUCEDSB245 INTRODUCED
12094	12094	Page 213
12095	12095	(A) In the case of a filing entity, this state;
12096	12096	(B) in the case of a foreign entity, the jurisdiction
12097	12097	in which the entity's certificate of formation or similar
12098	12098	organizational instrument is filed, or if no certificate of
12099	12099	formation or similar organizational instrument is filed, then
12100	12100	the laws of the jurisdiction which govern the internal affairs
12101	12101	of the foreign entity;
12102	12102	(C) in the case of a general partnership which has
12103	12103	filed a statement of partnership, a statement of not for
12104	12104	profit partnership, or a statement of limited liability
12105	12105	partnership in accordance with Chapter 8A, in this state;
12106	12106	(D) in the case of a foreign limited liability
12107	12107	partnership, the laws of the jurisdiction which govern the
12108	12108	filing of the foreign limited liability partnership's
12109	12109	statement of limited liability partnership or such filing in
12110	12110	that jurisdiction; and
12111	12111	(E) in the case of a foreign or domestic nonfiling
12112	12112	entity other than those entities described in subsection (C)
12113	12113	or (D):
12114	12114	(i) the jurisdiction the laws of which are chosen in
12115	12115	the entity's governing documents to govern its internal
12116	12116	affairs if that jurisdiction bears a reasonable relation to
12117	12117	the owners or members or to the domestic or foreign nonfiling
12118	12118	entity's business , activities, and affairs under the
12119	12119	principles of this state that otherwise would apply to a
12120	12120	contract among the owners or members; or
12121	12121	(ii) if subparagraph (i) does not apply, the
12122	12122	jurisdiction in which the entity has its principal office.
12123	12123	5938
12124	12124	5939
12125	12125	5940
12126	12126	5941
12127	12127	5942
12128	12128	5943
12129	12129	5944
12130	12130	5945
12131	12131	5946
12132	12132	5947
12133	12133	5948
12134	12134	5949
12135	12135	5950
12136	12136	5951
12137	12137	5952
12138	12138	5953
12139	12139	5954
12140	12140	5955
12141	12141	5956
12142	12142	5957
12143	12143	5958
12144	12144	5959
12145	12145	5960
12146	12146	5961
12147	12147	5962
12148	12148	5963
12149	12149	5964
12150	12150	5965 SB245 INTRODUCEDSB245 INTRODUCED
12151	12151	Page 214
12152	12152	(50) LAW. Unless the context requires otherwise, both
12153	12153	statutory and common law.
12154	12154	(51) LICENSE. A license, certificate of registration,
12155	12155	or other legal authorization.
12156	12156	(52) LICENSING AUTHORITY. The state court, state
12157	12157	regulatory licensing board, or other like agency which has the
12158	12158	power to issue a license or other legal authorization to
12159	12159	render professional services.
12160	12160	(53) LIMITED LIABILITY COMPANY. A limited liability
12161	12161	company as defined in Chapter 5A.
12162	12162	(54) LIMITED LIABILITY LIMITED PARTNERSHIP. A limited
12163	12163	liability limited partnership as defined in Chapter 9A.
12164	12164	(55) LIMITED LIABILITY PARTNERSHIP. A limited liability
12165	12165	partnership as defined in Chapter 8A.
12166	12166	(56) LIMITED PARTNER. A person who has been admitted to
12167	12167	a limited partnership as a limited partner as provided by:
12168	12168	(A) in the case of a domestic limited partnership,
12169	12169	Chapter 9A; or
12170	12170	(B) in the case of a foreign limited partnership, the
12171	12171	laws of its jurisdiction of formation.
12172	12172	(57) LIMITED PARTNERSHIP. A limited partnership as
12173	12173	defined in Chapter 9A. The term includes a limited liability
12174	12174	limited partnership as defined in Chapter 9A.
12175	12175	(58) MANAGERIAL OFFICIAL. An officer or a governing
12176	12176	person.
12177	12177	(59) MEMBER.
12178	12178	(A) A person defined as a member under Chapter 5A;
12179	12179	(B) in the case of a nonprofit corporation formed
12180	12180	5966
12181	12181	5967
12182	12182	5968
12183	12183	5969
12184	12184	5970
12185	12185	5971
12186	12186	5972
12187	12187	5973
12188	12188	5974
12189	12189	5975
12190	12190	5976
12191	12191	5977
12192	12192	5978
12193	12193	5979
12194	12194	5980
12195	12195	5981
12196	12196	5982
12197	12197	5983
12198	12198	5984
12199	12199	5985
12200	12200	5986
12201	12201	5987
12202	12202	5988
12203	12203	5989
12204	12204	5990
12205	12205	5991
12206	12206	5992
12207	12207	5993 SB245 INTRODUCEDSB245 INTRODUCED
12208	12208	Page 215
12209	12209	pursuant to or governed by Chapter 3, a person having
12210	12210	membership rights in the nonprofit corporation in accordance
12211	12211	with its governing documents as provided in Chapter 3 , and in
12212	12212	the case of a nonprofit corporation formed pursuant to or
12213	12213	governed by Chapter 3A, a person defined as a member under
12214	12214	Chapter 3A;
12215	12215	(C) in the case of an employee cooperative corporation
12216	12216	formed pursuant to or governed by Chapter 11, a natural person
12217	12217	who, as provided in Chapter 11, has been accepted for
12218	12218	membership in and owns a membership share in an employee
12219	12219	cooperative;
12220	12220	(D) in the case of a nonprofit association, a person
12221	12221	who, as provided in Chapter 17, may participate in the
12222	12222	selection of persons authorized to manage the affairs of the
12223	12223	nonprofit association or in the development of its policy.
12224	12224	(60) MERGER. The combination of one or more domestic
12225	12225	entities with one or more domestic entities or foreign
12226	12226	entities resulting in:
12227	12227	(A) one or more surviving domestic entities or foreign
12228	12228	entities;
12229	12229	(B) the creation of one or more new domestic entities
12230	12230	or foreign entities, or one or more surviving domestic
12231	12231	entities or foreign entities; or
12232	12232	(C) one or more surviving domestic entities or foreign
12233	12233	entities and the creation of one or more new domestic entities
12234	12234	or foreign entities.
12235	12235	(61) NONFILING ENTITY. A domestic entity that is not a
12236	12236	filing entity. The term includes a domestic general
12237	12237	5994
12238	12238	5995
12239	12239	5996
12240	12240	5997
12241	12241	5998
12242	12242	5999
12243	12243	6000
12244	12244	6001
12245	12245	6002
12246	12246	6003
12247	12247	6004
12248	12248	6005
12249	12249	6006
12250	12250	6007
12251	12251	6008
12252	12252	6009
12253	12253	6010
12254	12254	6011
12255	12255	6012
12256	12256	6013
12257	12257	6014
12258	12258	6015
12259	12259	6016
12260	12260	6017
12261	12261	6018
12262	12262	6019
12263	12263	6020
12264	12264	6021 SB245 INTRODUCEDSB245 INTRODUCED
12265	12265	Page 216
12266	12266	partnership, a limited liability partnership, and a nonprofit
12267	12267	association.
12268	12268	(62) NONPROFIT ASSOCIATION. An unincorporated nonprofit
12269	12269	association as defined in Chapter 17. The term does not
12270	12270	include a general partnership which has filed a statement of
12271	12271	not for profit partnership in accordance with Chapter 8A, a
12272	12272	limited partnership which is carrying on a not for profit
12273	12273	purpose, or a limited liability company which is carrying on a
12274	12274	not for profit purpose.
12275	12275	(63) NONPROFIT CORPORATION. A domestic or foreign
12276	12276	nonprofit corporation as defined in Chapter 3 or Chapter 3A.
12277	12277	(64) NONPROFIT ENTITY. An entity that is a nonprofit
12278	12278	corporation, nonprofit association, or other entity that is
12279	12279	organized solely for one or more nonprofit purposes.
12280	12280	(65) OFFICER. An individual elected, appointed, or
12281	12281	designated as an officer of an entity by the entity's
12282	12282	governing authority or under the entity's governing documents.
12283	12283	(66) ORGANIZATION. A corporation, limited partnership,
12284	12284	general partnership, limited liability company, business
12285	12285	trust, real estate investment trust, joint venture, joint
12286	12286	stock company, cooperative, association, or other
12287	12287	organization, including, regardless of its organizational
12288	12288	form, a bank, insurance company, credit union, and savings and
12289	12289	loan association, whether for profit, not for profit,
12290	12290	nonprofit, domestic, or foreign.
12291	12291	(67) ORGANIZER. A person, who need not be an owner or
12292	12292	member of the entity, who, having the capacity to contract, is
12293	12293	authorized to execute documents in connection with the
12294	12294	6022
12295	12295	6023
12296	12296	6024
12297	12297	6025
12298	12298	6026
12299	12299	6027
12300	12300	6028
12301	12301	6029
12302	12302	6030
12303	12303	6031
12304	12304	6032
12305	12305	6033
12306	12306	6034
12307	12307	6035
12308	12308	6036
12309	12309	6037
12310	12310	6038
12311	12311	6039
12312	12312	6040
12313	12313	6041
12314	12314	6042
12315	12315	6043
12316	12316	6044
12317	12317	6045
12318	12318	6046
12319	12319	6047
12320	12320	6048
12321	12321	6049 SB245 INTRODUCEDSB245 INTRODUCED
12322	12322	Page 217
12323	12323	formation of the entity. The term includes an incorporator.
12324	12324	(68) OWNER.
12325	12325	(A) With respect to a foreign or domestic business
12326	12326	corporation or real estate investment trust, a stockholder or
12327	12327	a shareholder;
12328	12328	(B) with respect to a foreign or domestic partnership,
12329	12329	a partner;
12330	12330	(C) with respect to a foreign or domestic limited
12331	12331	liability company or association, a member; and
12332	12332	(D) with respect to another foreign or domestic entity,
12333	12333	an owner of an equity interest in that entity.
12334	12334	(69) OWNERSHIP INTEREST. An owner's interest in an
12335	12335	entity. The term includes the owner's share of profits and
12336	12336	losses or similar items and the right to receive
12337	12337	distributions. The term does not include an owner's right to
12338	12338	participate in management or participate in the direction or
12339	12339	oversight of the entity. An ownership interest is personal
12340	12340	property.
12341	12341	(70) PARENT or PARENT ENTITY. An entity that:
12342	12342	(A) owns at least 50 percent of the ownership or
12343	12343	membership interest of a subsidiary; or
12344	12344	(B) possesses at least 50 percent of the voting power
12345	12345	of the owners or members of a subsidiary.
12346	12346	(71) PARTNER. A limited partner or general partner.
12347	12347	(72) PARTNERSHIP. Includes a general partnership, a
12348	12348	limited liability partnership, a foreign limited liability
12349	12349	partnership, a limited partnership, a foreign limited
12350	12350	partnership, a limited liability limited partnership, and a
12351	12351	6050
12352	12352	6051
12353	12353	6052
12354	12354	6053
12355	12355	6054
12356	12356	6055
12357	12357	6056
12358	12358	6057
12359	12359	6058
12360	12360	6059
12361	12361	6060
12362	12362	6061
12363	12363	6062
12364	12364	6063
12365	12365	6064
12366	12366	6065
12367	12367	6066
12368	12368	6067
12369	12369	6068
12370	12370	6069
12371	12371	6070
12372	12372	6071
12373	12373	6072
12374	12374	6073
12375	12375	6074
12376	12376	6075
12377	12377	6076
12378	12378	6077 SB245 INTRODUCEDSB245 INTRODUCED
12379	12379	Page 218
12380	12380	foreign limited liability limited partnership.
12381	12381	(73) PARTNERSHIP AGREEMENT. Any agreement (whether
12382	12382	referred to as a partnership agreement or otherwise), written,
12383	12383	oral or implied, of the partners as to the activities and
12384	12384	affairs of a general partnership or a limited partnership. The
12385	12385	partnership agreement includes any amendments to the
12386	12386	partnership agreement. In the case of limited partnerships
12387	12387	formed prior to October 1, 1998, partnership agreement
12388	12388	includes the certificate of partnership.
12389	12389	(74) PARTY TO THE MERGER. A domestic entity or foreign
12390	12390	entity that under a plan of merger is combined by a merger.
12391	12391	The term does not include a domestic entity or foreign entity
12392	12392	that is not to be combined into or with one or more domestic
12393	12393	entities or foreign entities, regardless of whether ownership
12394	12394	interests of the entity are to be issued under the plan of
12395	12395	merger.
12396	12396	(75) PERSON. An individual, including the estate of an
12397	12397	incompetent or deceased individual, or an entity, whether
12398	12398	created by the laws of this state or another state or foreign
12399	12399	country, including, without limitation, a general partnership,
12400	12400	limited liability partnership, limited partnership, limited
12401	12401	liability limited partnership, limited liability company,
12402	12402	corporation, professional corporation, nonprofit corporation,
12403	12403	professional association, trustee, personal representative,
12404	12404	fiduciary, as defined in Section 19-3-150 or person performing
12405	12405	in any similar capacity, business trust, estate, trust,
12406	12406	association, joint venture, government, governmental
12407	12407	subdivision, agency, or instrumentality, or any other legal or
12408	12408	6078
12409	12409	6079
12410	12410	6080
12411	12411	6081
12412	12412	6082
12413	12413	6083
12414	12414	6084
12415	12415	6085
12416	12416	6086
12417	12417	6087
12418	12418	6088
12419	12419	6089
12420	12420	6090
12421	12421	6091
12422	12422	6092
12423	12423	6093
12424	12424	6094
12425	12425	6095
12426	12426	6096
12427	12427	6097
12428	12428	6098
12429	12429	6099
12430	12430	6100
12431	12431	6101
12432	12432	6102
12433	12433	6103
12434	12434	6104
12435	12435	6105 SB245 INTRODUCEDSB245 INTRODUCED
12436	12436	Page 219
12437	12437	commercial entity.
12438	12438	(76) PRESIDENT.
12439	12439	(A) The individual designated as president of an entity
12440	12440	under the entity's governing documents; or
12441	12441	(B) the officer or committee of persons authorized to
12442	12442	perform the functions of the principal executive officer of an
12443	12443	entity without regard to the designated name of the officer or
12444	12444	committee.
12445	12445	(77) PRINCIPAL OFFICE. The office, in or out of this
12446	12446	state, where the principal executive office, whether referred
12447	12447	to as the principal executive office, chief executive office,
12448	12448	or otherwise, of an entity is located.
12449	12449	(78) PROFESSIONAL ASSOCIATION. A professional
12450	12450	association as defined in Chapter 30.
12451	12451	(79) PROFESSIONAL CORPORATION. A domestic or foreign
12452	12452	professional corporation as defined in Chapter 4.
12453	12453	(80) PROFESSIONAL ENTITY. A professional association
12454	12454	and a professional corporation.
12455	12455	(81) PROFESSIONAL SERVICE. Any type of service that may
12456	12456	lawfully be performed only pursuant to a license issued by a
12457	12457	state court, state regulatory licensing board, or other like
12458	12458	agency pursuant to state laws.
12459	12459	(82) PROPERTY. Includes all property, whether real,
12460	12460	personal, or mixed, or tangible or intangible, or any right or
12461	12461	interest therein.
12462	12462	(83) REAL ESTATE INVESTMENT TRUST. An unincorporated
12463	12463	trust, association, or other entity as defined in Chapter 10.
12464	12464	(84) SECRETARY.
12465	12465	6106
12466	12466	6107
12467	12467	6108
12468	12468	6109
12469	12469	6110
12470	12470	6111
12471	12471	6112
12472	12472	6113
12473	12473	6114
12474	12474	6115
12475	12475	6116
12476	12476	6117
12477	12477	6118
12478	12478	6119
12479	12479	6120
12480	12480	6121
12481	12481	6122
12482	12482	6123
12483	12483	6124
12484	12484	6125
12485	12485	6126
12486	12486	6127
12487	12487	6128
12488	12488	6129
12489	12489	6130
12490	12490	6131
12491	12491	6132
12492	12492	6133 SB245 INTRODUCEDSB245 INTRODUCED
12493	12493	Page 220
12494	12494	(A) The individual designated as secretary of an entity
12495	12495	under the entity's governing documents; or
12496	12496	(B) the officer or committee of persons authorized to
12497	12497	perform the functions of secretary of an entity without regard
12498	12498	to the designated name of the officer or committee.
12499	12499	(85) SECRETARY OF STATE. The Secretary of State of the
12500	12500	State of Alabama.
12501	12501	(86) SIGN or SIGNATURE. With the present intent to
12502	12502	authenticate or adopt a writing:
12503	12503	(A) to execute or adopt a tangible symbol to a writing,
12504	12504	and includes any manual, facsimile, or conformed signature; or
12505	12505	(B) to attach to or logically associate with an
12506	12506	electronic transmission an electronic sound, symbol, or
12507	12507	process, and includes an electronic signature in an electronic
12508	12508	transmission.
12509	12509	(87) STATE. Includes, when referring to a part of the
12510	12510	United States, a state or commonwealth, and its agencies and
12511	12511	governmental subdivisions, and a territory or possession, and
12512	12512	its agencies and governmental subdivisions, of the United
12513	12513	States.
12514	12514	(88) SUBSCRIBER. A person who agrees with or makes an
12515	12515	offer to an entity to purchase by subscription an ownership
12516	12516	interest in the entity.
12517	12517	(89) SUBSCRIPTION. An agreement between a subscriber
12518	12518	and an entity, or a written offer made by a subscriber to an
12519	12519	entity before or after the entity's formation, in which the
12520	12520	subscriber agrees or offers to purchase a specified ownership
12521	12521	interest in the entity.
12522	12522	6134
12523	12523	6135
12524	12524	6136
12525	12525	6137
12526	12526	6138
12527	12527	6139
12528	12528	6140
12529	12529	6141
12530	12530	6142
12531	12531	6143
12532	12532	6144
12533	12533	6145
12534	12534	6146
12535	12535	6147
12536	12536	6148
12537	12537	6149
12538	12538	6150
12539	12539	6151
12540	12540	6152
12541	12541	6153
12542	12542	6154
12543	12543	6155
12544	12544	6156
12545	12545	6157
12546	12546	6158
12547	12547	6159
12548	12548	6160
12549	12549	6161 SB245 INTRODUCEDSB245 INTRODUCED
12550	12550	Page 221
12551	12551	(90) SUBSIDIARY. An entity at least 50 percent of:
12552	12552	(A) the ownership or membership interest of which is
12553	12553	owned by a parent entity; or
12554	12554	(B) the voting power of which is possessed by a parent
12555	12555	entity.
12556	12556	(91) TREASURER.
12557	12557	(A) The individual designated as treasurer of an entity
12558	12558	under the entity's governing documents; or
12559	12559	(B) the officer or committee of persons authorized to
12560	12560	perform the functions of treasurer of an entity without regard
12561	12561	to the designated name of the officer or committee.
12562	12562	(92) TRUSTEE. A person who serves as a trustee of a
12563	12563	trust, including a real estate investment trust.
12564	12564	(93) UNCERTIFICATED OWNERSHIP INTEREST. An ownership
12565	12565	interest in a domestic entity that is not represented by a
12566	12566	certificate.
12567	12567	(94) VICE PRESIDENT.
12568	12568	(A) The individual designated as vice president of an
12569	12569	entity under the governing documents of the entity; or
12570	12570	(B) the officer or committee of persons authorized to
12571	12571	perform the functions of the president of the entity on the
12572	12572	death, absence, or resignation of the president or on the
12573	12573	inability of the president to perform the functions of office
12574	12574	without regard to the designated name of the officer or
12575	12575	committee.
12576	12576	(95) WRITING or WRITTEN. Information that is inscribed
12577	12577	on a tangible medium or that is stored in an electronic or
12578	12578	other medium and is retrievable in perceivable form."
12579	12579	6162
12580	12580	6163
12581	12581	6164
12582	12582	6165
12583	12583	6166
12584	12584	6167
12585	12585	6168
12586	12586	6169
12587	12587	6170
12588	12588	6171
12589	12589	6172
12590	12590	6173
12591	12591	6174
12592	12592	6175
12593	12593	6176
12594	12594	6177
12595	12595	6178
12596	12596	6179
12597	12597	6180
12598	12598	6181
12599	12599	6182
12600	12600	6183
12601	12601	6184
12602	12602	6185
12603	12603	6186
12604	12604	6187
12605	12605	6188
12606	12606	6189 SB245 INTRODUCEDSB245 INTRODUCED
12607	12607	Page 222
12608	12608	"§10A-1-1.08
12609	12609	(a) The provisions of this title as described by this
12610	12610	section may be cited as provided by this section.
12611	12611	(b) Chapter 2A and the provisions of Chapter 1 to the
12612	12612	extent applicable to business corporations may be cited as the
12613	12613	Alabama Business Corporation Law.
12614	12614	(c) Chapter 3 or Chapter 3A and the provisions of
12615	12615	Chapter 1 to the extent applicable to nonprofit corporations
12616	12616	may be cited as the Alabama Nonprofit Corporation Law.
12617	12617	(d) Chapter 4 and the provisions of Chapter 1 to the
12618	12618	extent applicable to professional corporations may be cited as
12619	12619	the Alabama Professional Corporation Law.
12620	12620	(e) Chapter 5A and the provisions of Chapter 1 to the
12621	12621	extent applicable to limited liability companies may be cited
12622	12622	as the Alabama Limited Liability Company Law.
12623	12623	(f) Chapter 8A and the provisions of Chapter 1 to the
12624	12624	extent applicable to general partnerships may be cited as the
12625	12625	Alabama Partnership Law.
12626	12626	(g) Chapter 9A and the provisions of Chapter 1 to the
12627	12627	extent applicable to limited partnerships may be cited as the
12628	12628	Alabama Limited Partnership Law.
12629	12629	(h) Chapter 10 and the provisions of Chapter 1 to the
12630	12630	extent applicable to real estate investment trusts may be
12631	12631	cited as the Alabama Real Estate Investment Trust Law.
12632	12632	(i) Chapter 11 and the provisions of Chapter 1 and
12633	12633	Chapter 2A to the extent applicable to employee cooperative
12634	12634	corporations may be cited as the Alabama Employee Cooperative
12635	12635	Corporations Law.
12636	12636	6190
12637	12637	6191
12638	12638	6192
12639	12639	6193
12640	12640	6194
12641	12641	6195
12642	12642	6196
12643	12643	6197
12644	12644	6198
12645	12645	6199
12646	12646	6200
12647	12647	6201
12648	12648	6202
12649	12649	6203
12650	12650	6204
12651	12651	6205
12652	12652	6206
12653	12653	6207
12654	12654	6208
12655	12655	6209
12656	12656	6210
12657	12657	6211
12658	12658	6212
12659	12659	6213
12660	12660	6214
12661	12661	6215
12662	12662	6216
12663	12663	6217 SB245 INTRODUCEDSB245 INTRODUCED
12664	12664	Page 223
12665	12665	(j) Chapter 17 and the provisions of Chapter 1 to the
12666	12666	extent applicable to unincorporated nonprofit associations may
12667	12667	be cited as the Alabama Unincorporated Nonprofit Association
12668	12668	Law."
12669	12669	"§10A-1-3.32
12670	12670	(a) This section applies to domestic entities other
12671	12671	than (i) corporations formed pursuant to or governed by
12672	12672	Chapter 2A or Chapter 4, and real estate investment trusts
12673	12673	formed pursuant to or governed by Chapter 10, each of which is
12674	12674	governed by the separate recordkeeping requirements and record
12675	12675	inspections provisions of Chapter 2A and (ii) nonprofit
12676	12676	corporations formed pursuant to or governed by Chapter 3 or
12677	12677	Chapter 3A, limited liability companies formed pursuant to or
12678	12678	governed by Chapter 5A, general partnerships formed pursuant
12679	12679	to or governed by Chapter 8A, and limited partnerships formed
12680	12680	pursuant to or governed by Chapter 9A, each of which are
12681	12681	governed by the separate recordkeeping requirements and record
12682	12682	inspection provisions set forth in each entity's respective
12683	12683	chapter governing that entity.
12684	12684	(b) With respect to a domestic entity covered by this
12685	12685	section, the books and records maintained under the chapter of
12686	12686	this title applicable to that entity and any other books and
12687	12687	records of that entity, wherever situated, are subject to
12688	12688	inspection and copying at the reasonable request, and at the
12689	12689	expense of, any owner or member or the owner's or member's
12690	12690	agent or attorney during regular business hours. The right of
12691	12691	access extends to the legal representative of a deceased owner
12692	12692	or member or owner or member under legal disability. The
12693	12693	6218
12694	12694	6219
12695	12695	6220
12696	12696	6221
12697	12697	6222
12698	12698	6223
12699	12699	6224
12700	12700	6225
12701	12701	6226
12702	12702	6227
12703	12703	6228
12704	12704	6229
12705	12705	6230
12706	12706	6231
12707	12707	6232
12708	12708	6233
12709	12709	6234
12710	12710	6235
12711	12711	6236
12712	12712	6237
12713	12713	6238
12714	12714	6239
12715	12715	6240
12716	12716	6241
12717	12717	6242
12718	12718	6243
12719	12719	6244
12720	12720	6245 SB245 INTRODUCEDSB245 INTRODUCED
12721	12721	Page 224
12722	12722	entity shall also provide former owners and members with
12723	12723	access to its books and records pertaining to the period
12724	12724	during which they were owners or members.
12725	12725	(c) The governing documents of a domestic entity may
12726	12726	not unreasonably restrict an owner's or member's right to
12727	12727	information or access to books and records.
12728	12728	(d) Any agent or governing person of a domestic entity
12729	12729	who, without reasonable cause, refuses to allow any owner or
12730	12730	member or the owner's or member's agent or legal counsel to
12731	12731	inspect any books or records of that entity shall be
12732	12732	personally liable to the agent or member for a penalty in an
12733	12733	amount not to exceed 10 percent of the fair market value of
12734	12734	the ownership interest of the owner or member, in addition to
12735	12735	any other damages or remedy."
12736	12736	"§10A-1-8.01
12737	12737	(a) A conversion of an entity may be accomplished as
12738	12738	provided in this section:
12739	12739	(a) The plan of conversion must be in writing, and:
12740	12740	(1) must include the following:
12741	12741	(A) the name, type of entity, and mailing address of
12742	12742	the principal office of the converting entity, and its unique
12743	12743	identifying number or other designation as assigned by the
12744	12744	Secretary of State, if any, before conversion;
12745	12745	(B) the name, type of entity, and mailing address of
12746	12746	the principal office of the converted entity after conversion;
12747	12747	(C) the terms and conditions of the conversion,
12748	12748	including the manner and basis for converting interests in the
12749	12749	converting entity into any combination of money, interests in
12750	12750	6246
12751	12751	6247
12752	12752	6248
12753	12753	6249
12754	12754	6250
12755	12755	6251
12756	12756	6252
12757	12757	6253
12758	12758	6254
12759	12759	6255
12760	12760	6256
12761	12761	6257
12762	12762	6258
12763	12763	6259
12764	12764	6260
12765	12765	6261
12766	12766	6262
12767	12767	6263
12768	12768	6264
12769	12769	6265
12770	12770	6266
12771	12771	6267
12772	12772	6268
12773	12773	6269
12774	12774	6270
12775	12775	6271
12776	12776	6272
12777	12777	6273 SB245 INTRODUCEDSB245 INTRODUCED
12778	12778	Page 225
12779	12779	the converted entity, and other consideration allowed in
12780	12780	subsection (b); and
12781	12781	(D) the organizational documents of the converted
12782	12782	entity; and
12783	12783	(2) may include other provisions relating to the
12784	12784	conversion not prohibited by law.
12785	12785	(b) In connection with a conversion, rights or
12786	12786	securities of or interests in a converting entity may be
12787	12787	exchanged for or converted into cash, property, or rights or
12788	12788	securities of or interests in the converted entity, or, in
12789	12789	addition to or in lieu thereof, may be exchanged for or
12790	12790	converted into cash, property, or rights or securities of or
12791	12791	interests in another entity, or may be cancelled.
12792	12792	(c) The plan of conversion of an entity must be
12793	12793	approved as follows:
12794	12794	(1) CORPORATIONS.
12795	12795	(A)a. The terms and conditions of a plan of conversion
12796	12796	of a corporation, other than a nonprofit corporation, If a
12797	12797	corporation is governed by Chapter 2A and that corporation is
12798	12798	a converting entity, the plan of conversion under subsection
12799	12799	(a) must be approved in accordance with the procedures and by
12800	12800	the stockholder vote required by Article 9 of Chapter 2A. If
12801	12801	the governing documents provide for approval of a conversion
12802	12802	by less than all of a corporation's stockholders, approval of
12803	12803	the conversion shall constitute corporate action subject to
12804	12804	appraisal rights pursuant to Article 13 of Chapter 2A. No
12805	12805	conversion of a corporation to a general or limited
12806	12806	partnership may be effected without the consent in writing of
12807	12807	6274
12808	12808	6275
12809	12809	6276
12810	12810	6277
12811	12811	6278
12812	12812	6279
12813	12813	6280
12814	12814	6281
12815	12815	6282
12816	12816	6283
12817	12817	6284
12818	12818	6285
12819	12819	6286
12820	12820	6287
12821	12821	6288
12822	12822	6289
12823	12823	6290
12824	12824	6291
12825	12825	6292
12826	12826	6293
12827	12827	6294
12828	12828	6295
12829	12829	6296
12830	12830	6297
12831	12831	6298
12832	12832	6299
12833	12833	6300
12834	12834	6301 SB245 INTRODUCEDSB245 INTRODUCED
12835	12835	Page 226
12836	12836	each stockholder who will have personal liability with respect
12837	12837	to the converted entity, notwithstanding any provision in the
12838	12838	governing documents of the converting corporation providing
12839	12839	for less than unanimous stockholder approval for the
12840	12840	conversion. If the conversion is a corporate action as
12841	12841	described in Section 10A-2A-13.02, then the rights,
12842	12842	obligations, and procedures under Article 13 of Chapter 2A
12843	12843	shall be applicable to that conversion.
12844	12844	(B)b. The terms and conditions of a plan of conversion
12845	12845	of a nonprofit corporation must be approved by all the
12846	12846	nonprofit corporation's members entitled to vote thereon, if
12847	12847	it is a nonprofit corporation with members with voting rights,
12848	12848	or as otherwise provided in the nonprofit corporation's
12849	12849	governing documents; but in no case may the governing
12850	12850	documents provide for approval by less than a majority of the
12851	12851	members entitled to vote thereon. If the converting nonprofit
12852	12852	corporation has no members, or no members entitled to vote
12853	12853	thereon, the terms and conditions of the plan of conversion
12854	12854	must be approved by a unanimous vote of the board of directors
12855	12855	of the converting nonprofit corporation, or as otherwise
12856	12856	provided in the governing documents; but in no case may the
12857	12857	governing documents provide for approval by less than a
12858	12858	majority of the board of directors. If a corporation is
12859	12859	governed by Chapter 3A and that corporation is a converting
12860	12860	entity, the plan of conversion under subsection (a) must be
12861	12861	approved in accordance with Article 13 of Chapter 3A.
12862	12862	(C) If a corporation is not governed by Chapter 2A or
12863	12863	Chapter 3A and that corporation is a converting entity, the
12864	12864	6302
12865	12865	6303
12866	12866	6304
12867	12867	6305
12868	12868	6306
12869	12869	6307
12870	12870	6308
12871	12871	6309
12872	12872	6310
12873	12873	6311
12874	12874	6312
12875	12875	6313
12876	12876	6314
12877	12877	6315
12878	12878	6316
12879	12879	6317
12880	12880	6318
12881	12881	6319
12882	12882	6320
12883	12883	6321
12884	12884	6322
12885	12885	6323
12886	12886	6324
12887	12887	6325
12888	12888	6326
12889	12889	6327
12890	12890	6328
12891	12891	6329 SB245 INTRODUCEDSB245 INTRODUCED
12892	12892	Page 227
12893	12893	plan of conversion under subsection (a) must be approved in
12894	12894	accordance with the law of the jurisdiction of formation of
12895	12895	that corporation.
12896	12896	(2) LIMITED PARTNERSHIPS, INCLUDING LIMITED LIABILITY
12897	12897	LIMITED PARTNERSHIPS. The terms and conditions of a plan of
12898	12898	conversion of a limited partnership must be approved by all of
12899	12899	the partners or as otherwise provided in the partnership
12900	12900	agreement. No conversion of a limited partnership to a general
12901	12901	partnership may be effected without the consent in writing of
12902	12902	each limited partner who will have personal liability with
12903	12903	respect to the converted entity, notwithstanding any provision
12904	12904	in the limited partnership agreement of the converting limited
12905	12905	partnership providing for approval of the conversion by less
12906	12906	than all partners. If a limited partnership is a converting
12907	12907	entity, the plan of conversion under subsection (a) must be
12908	12908	approved in accordance with Article 10 of Chapter 9A.
12909	12909	(3) LIMITED LIABILITY COMPANIES. The terms and
12910	12910	conditions of a plan of conversion of a limited liability
12911	12911	company must be approved by all of the limited liability
12912	12912	company's members or as otherwise provided in the limited
12913	12913	liability company's governing documents. No conversion of a
12914	12914	limited liability company to a general or limited partnership
12915	12915	may be effected without the consent in writing of each member
12916	12916	who will have personal liability with respect to the converted
12917	12917	entity, notwithstanding any provision in the governing
12918	12918	documents of the converting limited liability company
12919	12919	providing for less than unanimous member approval for the
12920	12920	conversion. If a limited liability company is a converting
12921	12921	6330
12922	12922	6331
12923	12923	6332
12924	12924	6333
12925	12925	6334
12926	12926	6335
12927	12927	6336
12928	12928	6337
12929	12929	6338
12930	12930	6339
12931	12931	6340
12932	12932	6341
12933	12933	6342
12934	12934	6343
12935	12935	6344
12936	12936	6345
12937	12937	6346
12938	12938	6347
12939	12939	6348
12940	12940	6349
12941	12941	6350
12942	12942	6351
12943	12943	6352
12944	12944	6353
12945	12945	6354
12946	12946	6355
12947	12947	6356
12948	12948	6357 SB245 INTRODUCEDSB245 INTRODUCED
12949	12949	Page 228
12950	12950	entity, the plan of conversion under subsection (a) must be
12951	12951	approved in accordance with Article 10 of Chapter 5A.
12952	12952	(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY
12953	12953	PARTNERSHIPS. The terms and conditions of a plan of conversion
12954	12954	of a general partnership must be approved by all of the
12955	12955	partners or as otherwise provided in the partnership
12956	12956	agreement. No conversion of a limited liability partnership to
12957	12957	a general or limited partnership may be effected without the
12958	12958	consent in writing of each partner who will have personal
12959	12959	liability with respect to the converted entity,
12960	12960	notwithstanding any provision in the partnership agreement of
12961	12961	the converting limited liability partnership providing for
12962	12962	less than unanimous partner approval for the conversion. If a
12963	12963	general partnership is a converting entity, the plan of
12964	12964	conversion under subsection (a) must be approved in accordance
12965	12965	with Article 9 of Chapter 8A. If a general partnership is the
12966	12966	converting entity and that general partnership does not have
12967	12967	an effective statement of partnership, statement of not for
12968	12968	profit partnership, or statement of limited liability
12969	12969	partnership on file with the Secretary of State, then that
12970	12970	general partnership must, before proceeding with a conversion
12971	12971	deliver to the Secretary of State for filing, a statement of
12972	12972	partnership, statement of not for profit partnership, or
12973	12973	statement of limited liability partnership simultaneously with
12974	12974	the delivery to the Secretary of State for filing, of a
12975	12975	statement of conversion.
12976	12976	(5) REAL ESTATE INVESTMENT TRUST. The terms and
12977	12977	conditions of a the plan of conversion under subsection (a) of
12978	12978	6358
12979	12979	6359
12980	12980	6360
12981	12981	6361
12982	12982	6362
12983	12983	6363
12984	12984	6364
12985	12985	6365
12986	12986	6366
12987	12987	6367
12988	12988	6368
12989	12989	6369
12990	12990	6370
12991	12991	6371
12992	12992	6372
12993	12993	6373
12994	12994	6374
12995	12995	6375
12996	12996	6376
12997	12997	6377
12998	12998	6378
12999	12999	6379
13000	13000	6380
13001	13001	6381
13002	13002	6382
13003	13003	6383
13004	13004	6384
13005	13005	6385 SB245 INTRODUCEDSB245 INTRODUCED
13006	13006	Page 229
13007	13007	a real estate investment trust must be approved by all of the
13008	13008	trust's shareholders or as otherwise provided in the trust's
13009	13009	declaration of trust; but in no case may the vote required for
13010	13010	shareholder approval be set at less than a majority of all the
13011	13011	votes entitled to be cast. No conversion of a real estate
13012	13012	investment trust to a general or limited partnership may be
13013	13013	effected without the consent in writing of each shareholder
13014	13014	who will have personal liability with respect to the converted
13015	13015	entity, notwithstanding any provision in the declaration of
13016	13016	trust of the converting real estate investment trust providing
13017	13017	for less than unanimous shareholder approval for the
13018	13018	conversion.
13019	13019	(6) OTHER ENTITY. The terms and conditions of a plan of
13020	13020	conversion of any entity not specified above must be approved
13021	13021	by all owners of the converting entity. No conversion of any
13022	13022	entity shall be effected without the consent in writing of any
13023	13023	owner of the converting entity who has limited liability and
13024	13024	who shall become an owner without limited liability protection
13025	13025	of the converted entity. In the case of an entity not
13026	13026	specified in paragraphs (1) through (5) above, a plan of
13027	13027	conversion under subsection (a) must be approved in writing by
13028	13028	all owners of that entity or, if the entity has no owners,
13029	13029	then by all members of the governing authority of that entity.
13030	13030	(7) ENTITY WITHOUT OWNERS. If the converting entity
13031	13031	does not have owners, the terms and conditions of the plan of
13032	13032	conversion must be unanimously approved by the governing
13033	13033	authority of the converting entity.
13034	13034	(b) The plan of conversion must be in writing, and:
13035	13035	6386
13036	13036	6387
13037	13037	6388
13038	13038	6389
13039	13039	6390
13040	13040	6391
13041	13041	6392
13042	13042	6393
13043	13043	6394
13044	13044	6395
13045	13045	6396
13046	13046	6397
13047	13047	6398
13048	13048	6399
13049	13049	6400
13050	13050	6401
13051	13051	6402
13052	13052	6403
13053	13053	6404
13054	13054	6405
13055	13055	6406
13056	13056	6407
13057	13057	6408
13058	13058	6409
13059	13059	6410
13060	13060	6411
13061	13061	6412
13062	13062	6413 SB245 INTRODUCEDSB245 INTRODUCED
13063	13063	Page 230
13064	13064	(1) must include the following:
13065	13065	a. the name, type of entity, and mailing address of the
13066	13066	principal office of the converting entity, and its unique
13067	13067	identifying number or other designation as assigned by the
13068	13068	Secretary of State, if any, before conversion;
13069	13069	b. the name, type of entity, and mailing address of the
13070	13070	principal office of the converted entity after conversion;
13071	13071	c. the terms and conditions of the conversion,
13072	13072	including the manner and basis for converting interests in the
13073	13073	converting entity into any combination of money, interests in
13074	13074	the converted entity, and other consideration allowed in
13075	13075	subsection (c); and
13076	13076	d. the organizational documents of the converted
13077	13077	entity; and
13078	13078	(2) may include other provisions relating to the
13079	13079	conversion not prohibited by law.
13080	13080	(c) In connection with a conversion, rights or
13081	13081	securities of or interests in a converting entity may be
13082	13082	exchanged for or converted into cash, property, or rights or
13083	13083	securities of or interests in the converted entity, or, in
13084	13084	addition to or in lieu thereof, may be exchanged for or
13085	13085	converted into cash, property, or rights or securities of or
13086	13086	interests in another entity or may be cancelled.
13087	13087	(d) After a plan of conversion is approved and before
13088	13088	the conversion takes effect, the plan may be amended or
13089	13089	abandoned as provided in the plan, or if the plan does not
13090	13090	provide for amendment or abandonment, in the same manner as
13091	13091	required for the approval of the plan of conversion
13092	13092	6414
13093	13093	6415
13094	13094	6416
13095	13095	6417
13096	13096	6418
13097	13097	6419
13098	13098	6420
13099	13099	6421
13100	13100	6422
13101	13101	6423
13102	13102	6424
13103	13103	6425
13104	13104	6426
13105	13105	6427
13106	13106	6428
13107	13107	6429
13108	13108	6430
13109	13109	6431
13110	13110	6432
13111	13111	6433
13112	13112	6434
13113	13113	6435
13114	13114	6436
13115	13115	6437
13116	13116	6438
13117	13117	6439
13118	13118	6440
13119	13119	6441 SB245 INTRODUCEDSB245 INTRODUCED
13120	13120	Page 231
13121	13121	originally.
13122	13122	(e)(d) After the plan of conversion is approved
13123	13123	pursuant to subsection (a)(c):
13124	13124	(1) if the converting entity is a domestic filing
13125	13125	entity, the converting entity shall deliver to the Secretary
13126	13126	of State for filing, a statement of conversion, which must
13127	13127	include:
13128	13128	a.(A) the name, type of entity, and mailing address of
13129	13129	the principal office of the converting entity, and its unique
13130	13130	identifying number or other designation as assigned by the
13131	13131	Secretary of State, if any, before conversion;
13132	13132	b. the date of the filing of the certificate of
13133	13133	formation of the converting entity, if any, and all prior
13134	13134	amendments and the filing office or offices, if any, where
13135	13135	such is filed;
13136	13136	c.(B) a statement that the converting entity has been
13137	13137	converted into the converted entity;
13138	13138	d.(C) the name and type of entity of the converted
13139	13139	entity and the jurisdiction of its governing statute;
13140	13140	e.(D) the street and mailing address of the principal
13141	13141	office of the converted entity;
13142	13142	f.(E) the date the conversion is effective under the
13143	13143	governing statute of the converted entity;
13144	13144	g.(F) a statement that the conversion was approved as
13145	13145	required by this chapter;
13146	13146	h.(G) a statement that the conversion was approved as
13147	13147	required by the governing statute of the converted entity;
13148	13148	i.(H) a statement that a copy of the plan of conversion
13149	13149	6442
13150	13150	6443
13151	13151	6444
13152	13152	6445
13153	13153	6446
13154	13154	6447
13155	13155	6448
13156	13156	6449
13157	13157	6450
13158	13158	6451
13159	13159	6452
13160	13160	6453
13161	13161	6454
13162	13162	6455
13163	13163	6456
13164	13164	6457
13165	13165	6458
13166	13166	6459
13167	13167	6460
13168	13168	6461
13169	13169	6462
13170	13170	6463
13171	13171	6464
13172	13172	6465
13173	13173	6466
13174	13174	6467
13175	13175	6468
13176	13176	6469 SB245 INTRODUCEDSB245 INTRODUCED
13177	13177	Page 232
13178	13178	will be furnished by the converted entity, on request and
13179	13179	without cost, to any owner of the converted or converting
13180	13180	entity; and
13181	13181	j.(I) if the converted entity is a foreign entity not
13182	13182	authorized to conduct activities and affairs in this state,
13183	13183	the street and mailing address of an office for the purposes
13184	13184	of Section 10A-1-8.04(b); and
13185	13185	(2) if the converted entity is (I) a filing entity, the
13186	13186	converting entity shall deliver to the Secretary of State for
13187	13187	filing a certificate of formation or (II) a general
13188	13188	partnership, the converting entity shall deliver to the
13189	13189	Secretary of State for filing a statement of partnership, a
13190	13190	statement of not for profit partnership, or a statement of
13191	13191	limited liability partnership, as applicable, which
13192	13192	certificate of formation or statement of partnership,
13193	13193	statement of not for profit partnership, or statement of
13194	13194	limited liability partnership, as applicable, must include, in
13195	13195	addition to the information required in the chapter governing
13196	13196	the certificate of formation of the converted entity, the
13197	13197	following:
13198	13198	a.(A) The name, mailing address of the principal office
13199	13199	of, type of entity, and the jurisdiction of the governing
13200	13200	statute of the converting entity and its unique identifying
13201	13201	number or other designation as assigned by the Secretary of
13202	13202	State, if any, before conversion;
13203	13203	b.(B) A statement that the converting entity has been
13204	13204	converted into the converted entity;
13205	13205	c.(C) The filing office where the certificate of
13206	13206	6470
13207	13207	6471
13208	13208	6472
13209	13209	6473
13210	13210	6474
13211	13211	6475
13212	13212	6476
13213	13213	6477
13214	13214	6478
13215	13215	6479
13216	13216	6480
13217	13217	6481
13218	13218	6482
13219	13219	6483
13220	13220	6484
13221	13221	6485
13222	13222	6486
13223	13223	6487
13224	13224	6488
13225	13225	6489
13226	13226	6490
13227	13227	6491
13228	13228	6492
13229	13229	6493
13230	13230	6494
13231	13231	6495
13232	13232	6496
13233	13233	6497 SB245 INTRODUCEDSB245 INTRODUCED
13234	13234	Page 233
13235	13235	formation, if any, of the converting entity is filed and the
13236	13236	date of the filing thereof;
13237	13237	d.(D) If the converted entity is one in which one or
13238	13238	more owners lack limited liability protection, a statement
13239	13239	that each owner of the converting entity who is to become an
13240	13240	owner without limited liability protection of the converted
13241	13241	entity has consented in writing to the conversion as required
13242	13242	by this section; and
13243	13243	e.(E) A statement that the conversion was approved
13244	13244	pursuant to this section and, if the converting entity is a
13245	13245	foreign entity, that the conversion was approved as required
13246	13246	by the governing statute of such foreign entity;
13247	13247	(3) if the converting entity is required pursuant to
13248	13248	subsections (e)(2) and (3) to deliver to the Secretary of
13249	13249	State for filing both (I) a statement of conversion and
13250	13250	(II)(A) a certificate of formation, or (B) a statement of
13251	13251	partnership, statement of not for profit partnership, or
13252	13252	statement of limited liability partnership, as applicable,
13253	13253	then the converting entity shall deliver the statement of
13254	13254	conversion and the certificate of formation or the statement
13255	13255	of partnership, statement of not for profit partnership, or
13256	13256	statement of limited liability partnership, as applicable, to
13257	13257	the Secretary of State simultaneously; and
13258	13258	(4) if the converting entity is a general partnership
13259	13259	and that partnership does not have an effective statement of
13260	13260	partnership, statement of not for profit partnership, or
13261	13261	statement of limited liability partnership on file with the
13262	13262	Secretary of State, then the converting entity must deliver to
13263	13263	6498
13264	13264	6499
13265	13265	6500
13266	13266	6501
13267	13267	6502
13268	13268	6503
13269	13269	6504
13270	13270	6505
13271	13271	6506
13272	13272	6507
13273	13273	6508
13274	13274	6509
13275	13275	6510
13276	13276	6511
13277	13277	6512
13278	13278	6513
13279	13279	6514
13280	13280	6515
13281	13281	6516
13282	13282	6517
13283	13283	6518
13284	13284	6519
13285	13285	6520
13286	13286	6521
13287	13287	6522
13288	13288	6523
13289	13289	6524
13290	13290	6525 SB245 INTRODUCEDSB245 INTRODUCED
13291	13291	Page 234
13292	13292	the Secretary of State for filing, a statement of partnership,
13293	13293	statement of not for profit partnership, or statement of
13294	13294	limited liability partnership simultaneously with the delivery
13295	13295	to the Secretary of State for filing, of a statement of
13296	13296	conversion.
13297	13297	(e) After a plan of conversion is approved and before
13298	13298	the conversion takes effect, the plan may be amended or
13299	13299	abandoned as provided in the plan, or if the plan does not
13300	13300	provide for amendment or abandonment, in the same manner as
13301	13301	required for the approval of the plan of conversion
13302	13302	originally.
13303	13303	(f) A conversion becomes effective:
13304	13304	(1) if the converted entity is a domestic filing
13305	13305	entity, the effective date determined in accordance with
13306	13306	Article 4 of this chapter; and
13307	13307	(2) if the converted entity is not a domestic filing
13308	13308	entity, as provided by the governing statute of the converted
13309	13309	entity.
13310	13310	(g) When a conversion becomes effective:
13311	13311	(1) all property and contract rights owned by the
13312	13312	converting entity remain vested in the converted entity
13313	13313	without transfer, reversion, or impairment, and the title to
13314	13314	any property vested by deed or otherwise in the converting
13315	13315	entity shall not revert or be in any way impaired by reason of
13316	13316	the conversion;
13317	13317	(2) all debts, obligations, or other liabilities of the
13318	13318	converting entity continue as debts, obligations, or other
13319	13319	liabilities of the converted entity and neither the rights of
13320	13320	6526
13321	13321	6527
13322	13322	6528
13323	13323	6529
13324	13324	6530
13325	13325	6531
13326	13326	6532
13327	13327	6533
13328	13328	6534
13329	13329	6535
13330	13330	6536
13331	13331	6537
13332	13332	6538
13333	13333	6539
13334	13334	6540
13335	13335	6541
13336	13336	6542
13337	13337	6543
13338	13338	6544
13339	13339	6545
13340	13340	6546
13341	13341	6547
13342	13342	6548
13343	13343	6549
13344	13344	6550
13345	13345	6551
13346	13346	6552
13347	13347	6553 SB245 INTRODUCEDSB245 INTRODUCED
13348	13348	Page 235
13349	13349	creditors nor the liens upon the property of the converting
13350	13350	entity shall be impaired by the conversion;
13351	13351	(3) an action or proceeding pending by or against the
13352	13352	converting entity continues as if the conversion had not
13353	13353	occurred and the name of the converted entity may, but need
13354	13354	not, be substituted for the name of the converting entity in
13355	13355	any pending action or proceeding;
13356	13356	(4) except as prohibited by law other than this
13357	13357	chapter, all of the rights, privileges, immunities, powers,
13358	13358	and purposes of the converting entity remain vested in the
13359	13359	converted entity;
13360	13360	(5) except as otherwise provided in the statement of
13361	13361	conversion, the terms and conditions of the statement of
13362	13362	conversion take effect;
13363	13363	(6) except as otherwise agreed, for all purposes of the
13364	13364	laws of this state, the converting entity shall not be
13365	13365	required to wind up its affairs or pay its liabilities and
13366	13366	distribute its assets, and the conversion shall not be deemed
13367	13367	to constitute a dissolution of the converting entity;
13368	13368	(7) for all purposes of the laws of this state, the
13369	13369	rights, privileges, powers, interests in property, debts,
13370	13370	liabilities, and duties of the converting entity, shall be the
13371	13371	rights, privileges, powers, interests in property, debts,
13372	13372	liabilities, and duties of the converted entity, and shall not
13373	13373	be deemed as a consequence of the conversion, to have been
13374	13374	transferred to the converted entity;
13375	13375	(8) if the converted entity is a domestic entity, for
13376	13376	all purposes of the laws of this state, the converted entity
13377	13377	6554
13378	13378	6555
13379	13379	6556
13380	13380	6557
13381	13381	6558
13382	13382	6559
13383	13383	6560
13384	13384	6561
13385	13385	6562
13386	13386	6563
13387	13387	6564
13388	13388	6565
13389	13389	6566
13390	13390	6567
13391	13391	6568
13392	13392	6569
13393	13393	6570
13394	13394	6571
13395	13395	6572
13396	13396	6573
13397	13397	6574
13398	13398	6575
13399	13399	6576
13400	13400	6577
13401	13401	6578
13402	13402	6579
13403	13403	6580
13404	13404	6581 SB245 INTRODUCEDSB245 INTRODUCED
13405	13405	Page 236
13406	13406	shall be deemed to be the same entity as the converting
13407	13407	entity, and the conversion shall constitute a continuation of
13408	13408	the existence of the converting entity in the form of the
13409	13409	converted entity;
13410	13410	(9) if the converting entity is a domestic entity, the
13411	13411	existence of the converted entity shall be deemed to have
13412	13412	commenced on the date the converting entity commenced its
13413	13413	existence in the jurisdiction in which the converting entity
13414	13414	was first created, formed, organized, incorporated, or
13415	13415	otherwise came into being;
13416	13416	(10) the conversion shall not affect the choice of law
13417	13417	applicable to matters arising prior to conversion;
13418	13418	(11) if the Secretary of State has assigned a unique
13419	13419	identifying number or other designation to the converting
13420	13420	entity and (i) the converted entity is formed pursuant to the
13421	13421	laws of this state, or (ii) the converted entity is, within 30
13422	13422	days after the effective date of the conversion, registered to
13423	13423	transact business in this state, then that unique identifying
13424	13424	number or other designation shall continue to be assigned to
13425	13425	the converted entity; and
13426	13426	(12)a.(A) An owner with limited liability protection
13427	13427	remains liable, if at all, for an obligation incurred by the
13428	13428	converting entity before the conversion takes effect only to
13429	13429	the extent, if any, the owner would have been liable if the
13430	13430	conversion had not occurred.
13431	13431	b.(B) An owner with limited liability protection who
13432	13432	becomes an owner without limited liability protection is
13433	13433	liable for an obligation of the converted entity incurred
13434	13434	6582
13435	13435	6583
13436	13436	6584
13437	13437	6585
13438	13438	6586
13439	13439	6587
13440	13440	6588
13441	13441	6589
13442	13442	6590
13443	13443	6591
13444	13444	6592
13445	13445	6593
13446	13446	6594
13447	13447	6595
13448	13448	6596
13449	13449	6597
13450	13450	6598
13451	13451	6599
13452	13452	6600
13453	13453	6601
13454	13454	6602
13455	13455	6603
13456	13456	6604
13457	13457	6605
13458	13458	6606
13459	13459	6607
13460	13460	6608
13461	13461	6609 SB245 INTRODUCEDSB245 INTRODUCED
13462	13462	Page 237
13463	13463	after conversion to the extent provided for by the laws
13464	13464	applicable to the converted entity.
13465	13465	(13) An owner without limited liability protection who
13466	13466	as a result of a conversion becomes an owner of a converted
13467	13467	entity with limited liability protection remains liable for an
13468	13468	obligation incurred by the converting entity before the
13469	13469	conversion takes effect only to the extent, if any, the owner
13470	13470	would have been liable if the conversion had not occurred.
13471	13471	(h) If:
13472	13472	(1) the converting entity is a filing entity, a general
13473	13473	partnership with an effective statement of partnership,
13474	13474	statement of not for profit partnership, or statement of
13475	13475	limited liability partnership on file with the Secretary of
13476	13476	State, a foreign filing entity registered to transact business
13477	13477	or not for profit activity in this state, or a qualified
13478	13478	foreign limited liability partnership;
13479	13479	(2) the converted entity will be a filing entity, a
13480	13480	general partnership with an effective statement of
13481	13481	partnership, statement of not for profit partnership, or
13482	13482	statement of limited liability partnership on file with the
13483	13483	Secretary of State, a foreign filing entity registered to
13484	13484	transact business or not for profit activity in this state, or
13485	13485	a qualified foreign limited liability partnership;
13486	13486	(3) the name of the converting entity and the converted
13487	13487	entity are to be the same, other than words, phrases, or
13488	13488	abbreviations indicating the type of entity; and
13489	13489	(4) the name of the converted entity complies with
13490	13490	Division A of Article 5 or Section 10A-1-7.07, as the case may
13491	13491	6610
13492	13492	6611
13493	13493	6612
13494	13494	6613
13495	13495	6614
13496	13496	6615
13497	13497	6616
13498	13498	6617
13499	13499	6618
13500	13500	6619
13501	13501	6620
13502	13502	6621
13503	13503	6622
13504	13504	6623
13505	13505	6624
13506	13506	6625
13507	13507	6626
13508	13508	6627
13509	13509	6628
13510	13510	6629
13511	13511	6630
13512	13512	6631
13513	13513	6632
13514	13514	6633
13515	13515	6634
13516	13516	6635
13517	13517	6636
13518	13518	6637 SB245 INTRODUCEDSB245 INTRODUCED
13519	13519	Page 238
13520	13520	be;
13521	13521	then, notwithstanding Division B of Article 5, no name
13522	13522	reservation shall be required and the converted entity shall
13523	13523	for all purposes of this title be entitled to utilize the name
13524	13524	of the converting entity without any further action by the
13525	13525	converting entity or the converted entity.
13526	13526	(i) A certified copy of the statement of conversion may
13527	13527	be delivered to the office of the judge of probate in any
13528	13528	county in which the converting entity owned real property, to
13529	13529	be recorded without payment and without collection by the
13530	13530	judge of probate of any deed or other transfer tax or fee. The
13531	13531	judge of probate shall, however, be entitled to collect a
13532	13532	filing fee of five dollars ($5). Any filing shall evidence
13533	13533	chain of title, but lack of filing shall not affect the
13534	13534	converted entity's title to the real property."
13535	13535	"§10A-1-8.02
13536	13536	(a) A merger of two or more entities, whether the other
13537	13537	entity or entities are the same or another form of entity, may
13538	13538	be accomplished as provided in this section.
13539	13539	(a) The plan of merger must be in writing, and:
13540	13540	(1) must include the following:
13541	13541	(A) the name, type of entity, and mailing address of
13542	13542	the principal office of each entity that is a party to the
13543	13543	merger, the jurisdiction of the governing statute of each
13544	13544	entity that is a party to the merger, and the respective
13545	13545	unique identifying number or other designation as assigned by
13546	13546	the Secretary of State, if any, of each entity that is a party
13547	13547	to the merger;
13548	13548	6638
13549	13549	6639
13550	13550	6640
13551	13551	6641
13552	13552	6642
13553	13553	6643
13554	13554	6644
13555	13555	6645
13556	13556	6646
13557	13557	6647
13558	13558	6648
13559	13559	6649
13560	13560	6650
13561	13561	6651
13562	13562	6652
13563	13563	6653
13564	13564	6654
13565	13565	6655
13566	13566	6656
13567	13567	6657
13568	13568	6658
13569	13569	6659
13570	13570	6660
13571	13571	6661
13572	13572	6662
13573	13573	6663
13574	13574	6664
13575	13575	6665 SB245 INTRODUCEDSB245 INTRODUCED
13576	13576	Page 239
13577	13577	(B) the name, type of entity, and mailing address of
13578	13578	the principal office of the surviving entity and, if the
13579	13579	surviving entity is to be created pursuant to the merger, the
13580	13580	surviving entity's organizational documents;
13581	13581	(C) the terms and conditions of the merger, including
13582	13582	the manner and basis for converting the interests in each
13583	13583	entity that is a party to the merger into any combination of
13584	13584	money, interests in the surviving entity, and other
13585	13585	consideration as allowed by subsection (b); and
13586	13586	(D) if the surviving entity is not to be created
13587	13587	pursuant to the merger, any amendments to be made by the
13588	13588	merger to the surviving entity's organizational documents; and
13589	13589	(2) may include other provisions relating to the merger
13590	13590	not prohibited by law.
13591	13591	(b) In connection with a merger, rights or securities
13592	13592	of or interests in a merged entity may be exchanged for or
13593	13593	converted into cash, property, or rights or securities of or
13594	13594	interests in the surviving entity, or, in addition to or in
13595	13595	lieu thereof, may be exchanged for or converted into cash,
13596	13596	property, or rights or securities of or interests in another
13597	13597	entity, or may be cancelled.
13598	13598	(c) The plan of merger of an entity must be approved as
13599	13599	follows:
13600	13600	(1) CORPORATIONS.
13601	13601	(A)a. In the case of a corporation, other than a
13602	13602	nonprofit corporation, that If a corporation is governed by
13603	13603	Chapter 2A and that corporation is a party to a merger, a plan
13604	13604	of merger under subsection (a) must be approved in accordance
13605	13605	6666
13606	13606	6667
13607	13607	6668
13608	13608	6669
13609	13609	6670
13610	13610	6671
13611	13611	6672
13612	13612	6673
13613	13613	6674
13614	13614	6675
13615	13615	6676
13616	13616	6677
13617	13617	6678
13618	13618	6679
13619	13619	6680
13620	13620	6681
13621	13621	6682
13622	13622	6683
13623	13623	6684
13624	13624	6685
13625	13625	6686
13626	13626	6687
13627	13627	6688
13628	13628	6689
13629	13629	6690
13630	13630	6691
13631	13631	6692
13632	13632	6693 SB245 INTRODUCEDSB245 INTRODUCED
13633	13633	Page 240
13634	13634	with the procedures and by the stockholder vote required by
13635	13635	Article 11 of Chapter 2A. If the governing documents of the
13636	13636	corporation provide for approval of a merger by less than all
13637	13637	of the corporation's stockholders, approval of the merger
13638	13638	shall constitute corporate action subject to appraisal rights
13639	13639	pursuant to Article 13 of Chapter 2A, as applicable. No merger
13640	13640	of a corporation into a general or limited partnership may be
13641	13641	effected without the consent in writing of each stockholder
13642	13642	who will have personal liability with respect to the surviving
13643	13643	entity, notwithstanding any provision in the governing
13644	13644	documents of the corporation that is a party to the merger
13645	13645	providing for less than unanimous stockholder approval for the
13646	13646	conversion. If the merger is a corporate action as described
13647	13647	in Section 10A-2A-13.02, then the rights, obligations, and
13648	13648	procedures under Article 13 of Chapter 2A shall be applicable
13649	13649	to that merger.
13650	13650	(B)b. In the case of a nonprofit corporation that is a
13651	13651	party to the merger, a plan of merger must be approved by all
13652	13652	the nonprofit corporation's members entitled to vote thereon,
13653	13653	if it is a nonprofit corporation with members with voting
13654	13654	rights, or as otherwise provided in the nonprofit
13655	13655	corporation's governing documents; but in no case may the
13656	13656	governing documents provide for approval by less than a
13657	13657	majority of the members entitled to vote thereon. If the
13658	13658	nonprofit corporation has no members, or no members entitled
13659	13659	to vote thereon, the plan of merger must be approved by a
13660	13660	unanimous vote of the board of directors of the nonprofit
13661	13661	corporation, except as otherwise provided in the governing
13662	13662	6694
13663	13663	6695
13664	13664	6696
13665	13665	6697
13666	13666	6698
13667	13667	6699
13668	13668	6700
13669	13669	6701
13670	13670	6702
13671	13671	6703
13672	13672	6704
13673	13673	6705
13674	13674	6706
13675	13675	6707
13676	13676	6708
13677	13677	6709
13678	13678	6710
13679	13679	6711
13680	13680	6712
13681	13681	6713
13682	13682	6714
13683	13683	6715
13684	13684	6716
13685	13685	6717
13686	13686	6718
13687	13687	6719
13688	13688	6720
13689	13689	6721 SB245 INTRODUCEDSB245 INTRODUCED
13690	13690	Page 241
13691	13691	documents; but in no case may the governing documents provide
13692	13692	for approval by less than a majority of the board of
13693	13693	directors. If a nonprofit corporation is governed by Chapter
13694	13694	3A and that corporation is a party to a merger, a plan of
13695	13695	merger under subsection (a) must be approved in accordance
13696	13696	with Article 12 of Chapter 3A.
13697	13697	(C) If a corporation is not governed by Chapter 2A or
13698	13698	Chapter 3A and that corporation is a party to a merger, the
13699	13699	plan of merger under subsection (a) must be approved in
13700	13700	accordance with the law of the jurisdiction of formation of
13701	13701	that corporation.
13702	13702	(2) LIMITED PARTNERSHIPS. In the case of a limited
13703	13703	partnership that is a party to the merger, a plan of merger
13704	13704	under subsection (a) must be approved in writing by all of the
13705	13705	partners or as otherwise provided in the partnership
13706	13706	agreement. No merger of a limited partnership with a general
13707	13707	partnership in which the general partnership is the surviving
13708	13708	entity may be effected without the consent in writing of each
13709	13709	limited partner who will have personal liability with respect
13710	13710	to the surviving entity, notwithstanding any provision in the
13711	13711	limited partnership agreement of the merging limited
13712	13712	partnership providing for approval of the merger by less than
13713	13713	all partners accordance with Article 10 of Chapter 9A .
13714	13714	(3) LIMITED LIABILITY COMPANIES. In the case of a
13715	13715	limited liability company that is a party to the merger, a
13716	13716	plan of merger under subsection (a) must be approved in
13717	13717	writing by all of the limited liability company's members or
13718	13718	as otherwise provided in the limited liability company's
13719	13719	6722
13720	13720	6723
13721	13721	6724
13722	13722	6725
13723	13723	6726
13724	13724	6727
13725	13725	6728
13726	13726	6729
13727	13727	6730
13728	13728	6731
13729	13729	6732
13730	13730	6733
13731	13731	6734
13732	13732	6735
13733	13733	6736
13734	13734	6737
13735	13735	6738
13736	13736	6739
13737	13737	6740
13738	13738	6741
13739	13739	6742
13740	13740	6743
13741	13741	6744
13742	13742	6745
13743	13743	6746
13744	13744	6747
13745	13745	6748
13746	13746	6749 SB245 INTRODUCEDSB245 INTRODUCED
13747	13747	Page 242
13748	13748	governing documents. No merger of a limited liability company
13749	13749	with a general or limited partnership that is the surviving
13750	13750	entity may be effected without the consent in writing of each
13751	13751	member who will have personal liability with respect to the
13752	13752	surviving entity, notwithstanding any provision in the
13753	13753	governing documents of the merging limited liability company
13754	13754	providing for less than unanimous member approval for a merger
13755	13755	accordance with Article 10 of Chapter 5A .
13756	13756	(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY
13757	13757	PARTNERSHIPS. In the case of a general partnership that is a
13758	13758	party to the merger, a plan of merger under subsection (a)
13759	13759	must be approved in writing by all of the partners or as
13760	13760	otherwise provided in the partnership agreement. No merger of
13761	13761	a limited liability partnership into a general or limited
13762	13762	partnership may be effected without the consent in writing of
13763	13763	each partner who will have personal liability with respect to
13764	13764	the surviving entity, notwithstanding any provision in the
13765	13765	partnership agreement of the limited liability partnership
13766	13766	providing for less than unanimous partner approval for a
13767	13767	merger accordance with Article 9 of Chapter 8A . All general
13768	13768	partnerships, other than a general partnership that is created
13769	13769	pursuant to the merger, that are parties to a merger must have
13770	13770	on file with the Secretary of State a statement of
13771	13771	partnership, statement of not for profit partnership, or
13772	13772	statement of limited liability partnership prior to delivering
13773	13773	the statement of merger to the Secretary of State for filing.
13774	13774	(5) REAL ESTATE INVESTMENT TRUST. In the case of a real
13775	13775	estate investment trust that is a party to the merger, a plan
13776	13776	6750
13777	13777	6751
13778	13778	6752
13779	13779	6753
13780	13780	6754
13781	13781	6755
13782	13782	6756
13783	13783	6757
13784	13784	6758
13785	13785	6759
13786	13786	6760
13787	13787	6761
13788	13788	6762
13789	13789	6763
13790	13790	6764
13791	13791	6765
13792	13792	6766
13793	13793	6767
13794	13794	6768
13795	13795	6769
13796	13796	6770
13797	13797	6771
13798	13798	6772
13799	13799	6773
13800	13800	6774
13801	13801	6775
13802	13802	6776
13803	13803	6777 SB245 INTRODUCEDSB245 INTRODUCED
13804	13804	Page 243
13805	13805	of merger under subsection (a) must be approved in writing by
13806	13806	all of the trust's shareholders or as otherwise provided in
13807	13807	the trust's declaration of trust, but in no case may the vote
13808	13808	required for shareholder approval be set at less than a
13809	13809	majority of all the votes entitled to be cast. No merger of a
13810	13810	real estate investment trust with a general or limited
13811	13811	partnership that is to be the surviving entity may be effected
13812	13812	without the consent in writing of each shareholder who will
13813	13813	have personal liability with respect to the surviving entity,
13814	13814	notwithstanding any provision in the declaration of trust of
13815	13815	the converting real estate investment trust providing for less
13816	13816	than unanimous shareholder approval for the merger.
13817	13817	(6) OTHER ENTITY. In the case of an entity other than a
13818	13818	corporation, limited partnership, limited liability company,
13819	13819	general partnership, or real estate investment trust that is a
13820	13820	party to the merger, a plan of merger must be approved in
13821	13821	writing by all owners of the entity. No merger of any entity
13822	13822	shall be effected without the consent in writing of any owner
13823	13823	who has limited liability as an owner of an entity party to
13824	13824	the merger, and who will have personal liability with respect
13825	13825	to the surviving entity. In the case of an entity not
13826	13826	specified in paragraphs (1) through (5) above, a plan of
13827	13827	merger under subsection (a) must be approved in writing by all
13828	13828	owners of that entity or, if the entity has no owners, then by
13829	13829	all members of the governing authority of that entity.
13830	13830	(b) The plan of merger must be in writing, and:
13831	13831	(1) must include the following:
13832	13832	a. the name, type of entity, and mailing address of the
13833	13833	6778
13834	13834	6779
13835	13835	6780
13836	13836	6781
13837	13837	6782
13838	13838	6783
13839	13839	6784
13840	13840	6785
13841	13841	6786
13842	13842	6787
13843	13843	6788
13844	13844	6789
13845	13845	6790
13846	13846	6791
13847	13847	6792
13848	13848	6793
13849	13849	6794
13850	13850	6795
13851	13851	6796
13852	13852	6797
13853	13853	6798
13854	13854	6799
13855	13855	6800
13856	13856	6801
13857	13857	6802
13858	13858	6803
13859	13859	6804
13860	13860	6805 SB245 INTRODUCEDSB245 INTRODUCED
13861	13861	Page 244
13862	13862	principal office of each entity that is a party to the merger,
13863	13863	the jurisdiction of the governing statute of each entity that
13864	13864	is a party to the merger, and the respective unique
13865	13865	identifying number or other designation as assigned by the
13866	13866	Secretary of State, if any, of each entity that is a party to
13867	13867	the merger;
13868	13868	b. the name, type of entity, and mailing address of the
13869	13869	principal office of the surviving entity and, if the surviving
13870	13870	entity is to be created pursuant to the merger, the surviving
13871	13871	entity's organizational documents;
13872	13872	c. the terms and conditions of the merger, including
13873	13873	the manner and basis for converting the interests in each
13874	13874	entity that is a party to the merger into any combination of
13875	13875	money, interests in the surviving entity, and other
13876	13876	consideration as allowed by subsection (c); and
13877	13877	d. if the surviving entity is not to be created
13878	13878	pursuant to the merger, any amendments to be made by the
13879	13879	merger to the surviving entity's organizational documents; and
13880	13880	(2) may include other provisions relating to the merger
13881	13881	not prohibited by law.
13882	13882	(c) In connection with a merger, rights or securities
13883	13883	of or interests in a merged entity may be exchanged for or
13884	13884	converted into cash, property, or rights or securities of or
13885	13885	interests in the surviving entity, or, in addition to or in
13886	13886	lieu thereof, may be exchanged for or converted into cash,
13887	13887	property, or rights or securities of or interests in another
13888	13888	entity or may be cancelled.
13889	13889	(d) After a plan of merger is approved and before the
13890	13890	6806
13891	13891	6807
13892	13892	6808
13893	13893	6809
13894	13894	6810
13895	13895	6811
13896	13896	6812
13897	13897	6813
13898	13898	6814
13899	13899	6815
13900	13900	6816
13901	13901	6817
13902	13902	6818
13903	13903	6819
13904	13904	6820
13905	13905	6821
13906	13906	6822
13907	13907	6823
13908	13908	6824
13909	13909	6825
13910	13910	6826
13911	13911	6827
13912	13912	6828
13913	13913	6829
13914	13914	6830
13915	13915	6831
13916	13916	6832
13917	13917	6833 SB245 INTRODUCEDSB245 INTRODUCED
13918	13918	Page 245
13919	13919	merger takes effect, the plan may be amended or abandoned as
13920	13920	provided in the plan, or if the plan does not provide for
13921	13921	amendment or abandonment, in the same manner as required for
13922	13922	the approval of the plan of merger originally.
13923	13923	(e)(d) After each entity has approved the plan of
13924	13924	merger pursuant to subsection (c) , the entities must deliver
13925	13925	to the Secretary of State for filing a statement of merger
13926	13926	signed on behalf of each entity as provided by its governing
13927	13927	statute which must include:
13928	13928	(1) the name, type of entity, and mailing address of
13929	13929	the principal office of each entity that is a party to the
13930	13930	merger, the jurisdiction of the governing statute of each
13931	13931	entity that is a party to the merger, and the respective
13932	13932	unique identifying number or other designation as assigned by
13933	13933	the Secretary of State, if any, of each entity that is a party
13934	13934	to the merger;
13935	13935	(2) the name, type of entity, and mailing address of
13936	13936	the principal office of the surviving entity, the unique
13937	13937	identifying number or other designation as assigned by the
13938	13938	Secretary of State, if any, of the surviving entity, the
13939	13939	jurisdiction of the governing statute of the surviving entity,
13940	13940	and, if the surviving entity is created pursuant to the
13941	13941	merger, a statement to that effect;
13942	13942	(3) for each entity other than a general partnership,
13943	13943	the date of the filing of the certificate of formation, if
13944	13944	any, and all prior amendments and the filing office or
13945	13945	offices, if any, where such is filed;
13946	13946	(4)(3) for each general partnership, the date of the
13947	13947	6834
13948	13948	6835
13949	13949	6836
13950	13950	6837
13951	13951	6838
13952	13952	6839
13953	13953	6840
13954	13954	6841
13955	13955	6842
13956	13956	6843
13957	13957	6844
13958	13958	6845
13959	13959	6846
13960	13960	6847
13961	13961	6848
13962	13962	6849
13963	13963	6850
13964	13964	6851
13965	13965	6852
13966	13966	6853
13967	13967	6854
13968	13968	6855
13969	13969	6856
13970	13970	6857
13971	13971	6858
13972	13972	6859
13973	13973	6860
13974	13974	6861 SB245 INTRODUCEDSB245 INTRODUCED
13975	13975	Page 246
13976	13976	filing of the statement of partnership, statement of not for
13977	13977	profit partnership, or statement of limited liability
13978	13978	partnership, if any, and all prior amendments and the filing
13979	13979	office or offices, if any, where such is filed;
13980	13980	(5)(4) the date the merger is effective under the
13981	13981	governing statute of the surviving entity;
13982	13982	(6)(5) if the surviving entity is to be created
13983	13983	pursuant to the merger, (i) if it will be a filing entity, its
13984	13984	certificate of formation; or (ii) if it will be a non-filing
13985	13985	entity, any document that creates the entity that is required
13986	13986	to be in a public writing or in the case of a general
13987	13987	partnership, its statement of partnership, statement of not
13988	13988	for profit partnership, or statement of limited liability
13989	13989	partnership, as applicable;
13990	13990	(7)(6) if the surviving entity is a domestic entity
13991	13991	that exists before the merger, any amendments provided for in
13992	13992	the plan of merger for the organizational documents that
13993	13993	created the domestic entity that are required to be in a
13994	13994	public writing, or in the case of a general partnership, its
13995	13995	statement of partnership, statement of not for profit
13996	13996	partnership, or statement of limited liability partnership, as
13997	13997	applicable;
13998	13998	(8)(7) a statement as to each entity that the merger
13999	13999	was approved as required by the entity's governing statute;
14000	14000	(9)(8) a statement that a copy of the plan of merger
14001	14001	will be furnished by the surviving entity, on request and
14002	14002	without cost, to any owner of any entity which is a party to
14003	14003	the merger;
14004	14004	6862
14005	14005	6863
14006	14006	6864
14007	14007	6865
14008	14008	6866
14009	14009	6867
14010	14010	6868
14011	14011	6869
14012	14012	6870
14013	14013	6871
14014	14014	6872
14015	14015	6873
14016	14016	6874
14017	14017	6875
14018	14018	6876
14019	14019	6877
14020	14020	6878
14021	14021	6879
14022	14022	6880
14023	14023	6881
14024	14024	6882
14025	14025	6883
14026	14026	6884
14027	14027	6885
14028	14028	6886
14029	14029	6887
14030	14030	6888
14031	14031	6889 SB245 INTRODUCEDSB245 INTRODUCED
14032	14032	Page 247
14033	14033	(10)(9) if the surviving entity is a foreign entity not
14034	14034	authorized to conduct activities and affairs in this state,
14035	14035	the street and mailing address of an office for the purposes
14036	14036	of Section 10A-1-8.04; and
14037	14037	(11)(10) any additional information required by the
14038	14038	governing statute of any entity that is a party to the merger.
14039	14039	(f)(e) Prior to the statement of merger being delivered
14040	14040	for filing to the Secretary of State in accordance with
14041	14041	subsection (e)(d), all parties to the merger that are general
14042	14042	partnerships, other than a general partnership that is created
14043	14043	pursuant to the merger, must have on file with the Secretary
14044	14044	of State a statement of partnership, statement of not for
14045	14045	profit partnership, or statement of limited liability
14046	14046	partnership.
14047	14047	(f) After a plan of merger is approved and before the
14048	14048	merger takes effect, the plan may be amended or abandoned as
14049	14049	provided in the plan, or if the plan does not provide for
14050	14050	amendment or abandonment, in the same manner as required for
14051	14051	the approval of the plan of merger originally.
14052	14052	(g) If all of the entities that are parties to the
14053	14053	merger are domestic entities, the merger becomes effective on
14054	14054	the effective date determined in accordance with Article 4. If
14055	14055	one or more parties to the merger is a foreign entity, or a
14056	14056	foreign entity created by the merger is the surviving entity,
14057	14057	the merger shall become effective at the later of:
14058	14058	(1) when all documents required to be filed in foreign
14059	14059	jurisdictions to effect the merger have become effective, or
14060	14060	(2) the effective date determined in accordance with
14061	14061	6890
14062	14062	6891
14063	14063	6892
14064	14064	6893
14065	14065	6894
14066	14066	6895
14067	14067	6896
14068	14068	6897
14069	14069	6898
14070	14070	6899
14071	14071	6900
14072	14072	6901
14073	14073	6902
14074	14074	6903
14075	14075	6904
14076	14076	6905
14077	14077	6906
14078	14078	6907
14079	14079	6908
14080	14080	6909
14081	14081	6910
14082	14082	6911
14083	14083	6912
14084	14084	6913
14085	14085	6914
14086	14086	6915
14087	14087	6916
14088	14088	6917 SB245 INTRODUCEDSB245 INTRODUCED
14089	14089	Page 248
14090	14090	Article 4.
14091	14091	(h) When a merger becomes effective:
14092	14092	(1) the surviving entity continues or, in the case of a
14093	14093	surviving entity created pursuant to the merger, comes into
14094	14094	existence;
14095	14095	(2) each entity that merges into the surviving entity
14096	14096	ceases to exist as a separate entity;
14097	14097	(3) except as provided in the plan of merger, all
14098	14098	property owned by, and every contract right possessed by, each
14099	14099	merging entity that ceases to exist vests in the surviving
14100	14100	entity without transfer, reversion, or impairment and the
14101	14101	title to any property and contract rights vested by deed or
14102	14102	otherwise in the surviving entity shall not revert, be in any
14103	14103	way impaired, or be deemed to be a transfer by reason of the
14104	14104	merger;
14105	14105	(4) all debts, obligations, and other liabilities of
14106	14106	each merging entity, other than the surviving entity, are
14107	14107	debts, obligations, and liabilities of the surviving entity,
14108	14108	and neither the rights of creditors, nor any liens upon the
14109	14109	property of any entity that is a party to the merger, shall be
14110	14110	impaired by the merger;
14111	14111	(5) an action or proceeding, pending by or against any
14112	14112	merging entity that ceases to exist continues as if the merger
14113	14113	had not occurred and the name of the surviving entity may, but
14114	14114	need not be substituted in any pending proceeding for the name
14115	14115	of any merging entity whose separate existence ceased in the
14116	14116	merger;
14117	14117	(6) except as prohibited by law other than this chapter
14118	14118	6918
14119	14119	6919
14120	14120	6920
14121	14121	6921
14122	14122	6922
14123	14123	6923
14124	14124	6924
14125	14125	6925
14126	14126	6926
14127	14127	6927
14128	14128	6928
14129	14129	6929
14130	14130	6930
14131	14131	6931
14132	14132	6932
14133	14133	6933
14134	14134	6934
14135	14135	6935
14136	14136	6936
14137	14137	6937
14138	14138	6938
14139	14139	6939
14140	14140	6940
14141	14141	6941
14142	14142	6942
14143	14143	6943
14144	14144	6944
14145	14145	6945 SB245 INTRODUCEDSB245 INTRODUCED
14146	14146	Page 249
14147	14147	or as provided in the plan of merger, all the rights,
14148	14148	privileges, franchises, immunities, powers, and purposes of
14149	14149	each merging entity, other than the surviving entity, vest in
14150	14150	the surviving entity;
14151	14151	(7) except as otherwise provided in the plan of merger,
14152	14152	the terms and conditions of the plan of merger take effect;
14153	14153	(8) except as otherwise agreed, if a merged entity
14154	14154	ceases to exist, the merger does not dissolve the merged
14155	14155	entity;
14156	14156	(9) if the surviving entity is created pursuant to the
14157	14157	merger:
14158	14158	(i)(A) if it is a general partnership, the statement of
14159	14159	partnership, statement of not for profit partnership, or
14160	14160	statement of limited liability partnership becomes effective;
14161	14161	or
14162	14162	(ii)(B) if it is an entity other than a partnership,
14163	14163	the organizational documents that create the entity become
14164	14164	effective;
14165	14165	(10) the interests in a merging entity that are to be
14166	14166	converted in accordance with the terms of the merger into
14167	14167	interests, obligations, rights to acquire interests, cash,
14168	14168	other property, or any combination of the foregoing, are
14169	14169	converted as provided in the plan of merger, and the former
14170	14170	holders of interests are entitled only to the rights provided
14171	14171	to them by those terms or to any appraisal or dissenters'
14172	14172	rights they may have under the governing statute governing the
14173	14173	merging entity;
14174	14174	(11) if the surviving entity exists before the merger:
14175	14175	6946
14176	14176	6947
14177	14177	6948
14178	14178	6949
14179	14179	6950
14180	14180	6951
14181	14181	6952
14182	14182	6953
14183	14183	6954
14184	14184	6955
14185	14185	6956
14186	14186	6957
14187	14187	6958
14188	14188	6959
14189	14189	6960
14190	14190	6961
14191	14191	6962
14192	14192	6963
14193	14193	6964
14194	14194	6965
14195	14195	6966
14196	14196	6967
14197	14197	6968
14198	14198	6969
14199	14199	6970
14200	14200	6971
14201	14201	6972
14202	14202	6973 SB245 INTRODUCEDSB245 INTRODUCED
14203	14203	Page 250
14204	14204	(i)(A) except as provided in the plan of merger, all
14205	14205	the property and contract rights of the surviving entity
14206	14206	remain its property and contract rights without transfer,
14207	14207	reversion, or impairment;
14208	14208	(ii)(B) the surviving entity remains subject to all its
14209	14209	debts, obligations, and other liabilities; and
14210	14210	(iii)(C) except as provided by law other than this
14211	14211	chapter or the plan of merger, the surviving entity continues
14212	14212	to hold all of its rights, privileges, franchises, immunities,
14213	14213	powers, and purposes.
14214	14214	(12) Service of process in an action or proceeding
14215	14215	against a surviving foreign entity to enforce an obligation of
14216	14216	a domestic entity that is a party to a merger may be made by
14217	14217	registered mail addressed to the surviving entity at the
14218	14218	address set forth in the statement of merger or by any method
14219	14219	provided by the Alabama Rules of Civil Procedure. Any notice
14220	14220	or demand required or permitted by law to be served on a
14221	14221	domestic entity may be served on the surviving foreign entity
14222	14222	by registered mail addressed to the surviving entity at the
14223	14223	address set forth in the statement of merger or in any other
14224	14224	manner similar to the procedure provided by the Alabama Rules
14225	14225	of Civil Procedure for the service of process.
14226	14226	(13)a.(A) An owner of an entity with limited liability
14227	14227	protection remains liable, if at all, for an obligation
14228	14228	incurred prior to the merger by an entity that ceases to exist
14229	14229	as a result of the merger only to the extent, if any, that the
14230	14230	owner would have been liable under the laws applicable to
14231	14231	owners of the form of entity that ceased to exist if the
14232	14232	6974
14233	14233	6975
14234	14234	6976
14235	14235	6977
14236	14236	6978
14237	14237	6979
14238	14238	6980
14239	14239	6981
14240	14240	6982
14241	14241	6983
14242	14242	6984
14243	14243	6985
14244	14244	6986
14245	14245	6987
14246	14246	6988
14247	14247	6989
14248	14248	6990
14249	14249	6991
14250	14250	6992
14251	14251	6993
14252	14252	6994
14253	14253	6995
14254	14254	6996
14255	14255	6997
14256	14256	6998
14257	14257	6999
14258	14258	7000
14259	14259	7001 SB245 INTRODUCEDSB245 INTRODUCED
14260	14260	Page 251
14261	14261	merger had not occurred.
14262	14262	b.(B) An owner with limited liability protection who,
14263	14263	as a result of the merger, becomes an owner without limited
14264	14264	liability protection of the surviving entity is liable for an
14265	14265	obligation of the surviving entity incurred after merger to
14266	14266	the extent provided for by the laws applicable to the
14267	14267	surviving entity.
14268	14268	(14) An owner without limited liability protection of
14269	14269	an entity that ceases to exist as a result of a merger and who
14270	14270	as a result of the merger becomes an owner of a surviving
14271	14271	entity with limited liability protection remains liable for an
14272	14272	obligation of the entity that ceases to exist incurred before
14273	14273	the merger takes effect only to the extent, if any, that the
14274	14274	owner would have been liable if the merger had not occurred.
14275	14275	(i) A certified copy of the statement of merger
14276	14276	required to be filed under this section may be filed in the
14277	14277	real estate records in the office of the judge of probate in
14278	14278	any county in which any merged entity owned real property,
14279	14279	without payment and without collection by the judge of probate
14280	14280	of any deed or other transfer tax or fee. The judge of
14281	14281	probate, however, shall be entitled to collect a filing fee of
14282	14282	five dollars ($5). Any such filing shall evidence chain of
14283	14283	title, but lack of filing shall not affect the surviving
14284	14284	entity's title to such real property."
14285	14285	"§10A-1-9.01
14286	14286	This article does not apply to business corporations,
14287	14287	nonprofit corporations, limited liability companies, general
14288	14288	partnerships, and limited partnerships."
14289	14289	7002
14290	14290	7003
14291	14291	7004
14292	14292	7005
14293	14293	7006
14294	14294	7007
14295	14295	7008
14296	14296	7009
14297	14297	7010
14298	14298	7011
14299	14299	7012
14300	14300	7013
14301	14301	7014
14302	14302	7015
14303	14303	7016
14304	14304	7017
14305	14305	7018
14306	14306	7019
14307	14307	7020
14308	14308	7021
14309	14309	7022
14310	14310	7023
14311	14311	7024
14312	14312	7025
14313	14313	7026
14314	14314	7027
14315	14315	7028
14316	14316	7029 SB245 INTRODUCEDSB245 INTRODUCED
14317	14317	Page 252
14318	14318	Section 3. Sections 10A-2A-1.40, 10A-2A-1.43,
14319	14319	10A-2A-1.51, 10A-2A-2.02, 10A-2A-2.06, 10A-2A-7.04,
14320	14320	10A-2A-7.32, 10A-2A-7.20, 10A-2A-8.10, 10A-2A-8.21,
14321	14321	10A-2A-8.22, 10A-2A-8.24, 10A-2A-8.59, 10A-2A-10.06,
14322	14322	10A-2A-10.07, 10A-2A-10.08, 10A-2A-11.02, 10A-2A-11.06,
14323	14323	10A-2A-12.02, and 10A-2A-14.13 of the Code of Alabama 1975,
14324	14324	are amended to read as follows:
14325	14325	"§10A-2A-1.40
14326	14326	As used in this chapter, unless otherwise specified or
14327	14327	unless the context otherwise requires, the following terms
14328	14328	have the following meanings:
14329	14329	(1) AUTHORIZED STOCK means the stock of all classes and
14330	14330	series a corporation or foreign corporation is authorized to
14331	14331	issue.
14332	14332	(2) BENEFICIAL STOCKHOLDER means a person who owns the
14333	14333	beneficial interest in stock, which is either a record
14334	14334	stockholder or a person on whose behalf shares of stock are
14335	14335	registered in the name of an intermediary or nominee.
14336	14336	(3) CERTIFICATE OF INCORPORATION means the certificate
14337	14337	of incorporation described in Section 10A-2A-2.02, all
14338	14338	amendments to the certificate of incorporation, and any other
14339	14339	documents permitted or required to be delivered for filing by
14340	14340	a corporation with the Secretary of State under this chapter
14341	14341	or Chapter 1 that modify, amend, supplement, restate, or
14342	14342	replace the certificate of incorporation. After an amendment
14343	14343	of the certificate of incorporation or any other document
14344	14344	filed under this chapter or Chapter 1 that restates the
14345	14345	certificate of incorporation in its entirety, the certificate
14346	14346	7030
14347	14347	7031
14348	14348	7032
14349	14349	7033
14350	14350	7034
14351	14351	7035
14352	14352	7036
14353	14353	7037
14354	14354	7038
14355	14355	7039
14356	14356	7040
14357	14357	7041
14358	14358	7042
14359	14359	7043
14360	14360	7044
14361	14361	7045
14362	14362	7046
14363	14363	7047
14364	14364	7048
14365	14365	7049
14366	14366	7050
14367	14367	7051
14368	14368	7052
14369	14369	7053
14370	14370	7054
14371	14371	7055
14372	14372	7056
14373	14373	7057 SB245 INTRODUCEDSB245 INTRODUCED
14374	14374	Page 253
14375	14375	of incorporation shall not include any prior documents. When
14376	14376	used with respect to a corporation incorporated and existing
14377	14377	on December 31, 2019, under a predecessor law of this state,
14378	14378	the term "certificate of incorporation" means articles of
14379	14379	incorporation, charter, or similar incorporating document, and
14380	14380	all amendments and restatements to the certificate of
14381	14381	incorporation, charter, or similar incorporating document.
14382	14382	When used with respect to a foreign corporation, a nonprofit
14383	14383	corporation, or a foreign nonprofit corporation, the
14384	14384	"certificate of incorporation" of such an entity means the
14385	14385	document of such entity that is equivalent to the certificate
14386	14386	of incorporation of a corporation. The term "certificate of
14387	14387	incorporation" as used in this chapter is synonymous to the
14388	14388	term "certificate of formation" used in Chapter 1.
14389	14389	(4) CORPORATION, except in the phrase foreign
14390	14390	corporation, means an entity incorporated or existing under
14391	14391	this chapter.
14392	14392	(5) DELIVER or DELIVERY means any method of delivery
14393	14393	used in conventional commercial practice, including delivery
14394	14394	by hand, mail, commercial delivery, and, if authorized in
14395	14395	accordance with Section 10A-2A-1.41, by electronic
14396	14396	transmission.
14397	14397	(6) DISTRIBUTION means a direct or indirect transfer of
14398	14398	cash or other property (except a corporation's own stock) or
14399	14399	incurrence of indebtedness by a corporation to or for the
14400	14400	benefit of its stockholders in respect of any of its stock. A
14401	14401	distribution may be in the form of a payment of a dividend; a
14402	14402	purchase, redemption, or other acquisition of stock; a
14403	14403	7058
14404	14404	7059
14405	14405	7060
14406	14406	7061
14407	14407	7062
14408	14408	7063
14409	14409	7064
14410	14410	7065
14411	14411	7066
14412	14412	7067
14413	14413	7068
14414	14414	7069
14415	14415	7070
14416	14416	7071
14417	14417	7072
14418	14418	7073
14419	14419	7074
14420	14420	7075
14421	14421	7076
14422	14422	7077
14423	14423	7078
14424	14424	7079
14425	14425	7080
14426	14426	7081
14427	14427	7082
14428	14428	7083
14429	14429	7084
14430	14430	7085 SB245 INTRODUCEDSB245 INTRODUCED
14431	14431	Page 254
14432	14432	distribution of indebtedness; a distribution in liquidation;
14433	14433	or otherwise.
14434	14434	(7) DOCUMENT means a writing as defined in Chapter 1.
14435	14435	(8) EFFECTIVE DATE, when referring to a document
14436	14436	accepted for filing by the Secretary of State, means the time
14437	14437	and date determined in accordance with Article 4 of Chapter 1.
14438	14438	(9) ELECTRONIC MAIL means an electronic transmission
14439	14439	directed to a unique electronic mail address.
14440	14440	(10) ELECTRONIC MAIL ADDRESS means a destination,
14441	14441	commonly expressed as a string of characters, consisting of a
14442	14442	unique user name or mailbox (commonly referred to as the
14443	14443	"local part" of the address) and a reference to an internet
14444	14444	domain (commonly referred to as the "domain part" of the
14445	14445	address), whether or not displayed, to which electronic mail
14446	14446	can be sent or delivered.
14447	14447	(11) ELIGIBLE ENTITY means an unincorporated entity,
14448	14448	foreign unincorporated entity, nonprofit corporation, or
14449	14449	foreign nonprofit corporation.
14450	14450	(12) ELIGIBLE INTERESTS means interests or memberships.
14451	14451	(13) EMPLOYEE includes an officer, but not a director.
14452	14452	A director may accept duties that make the director also an
14453	14453	employee.
14454	14454	(14) ENTITY includes corporation; foreign corporation;
14455	14455	nonprofit corporation; foreign nonprofit corporation; estate;
14456	14456	trust; unincorporated entity; foreign unincorporated entity;
14457	14457	and state, United States, and foreign government.
14458	14458	(15) EXPENSES means reasonable expenses of any kind
14459	14459	that are incurred in connection with a matter.
14460	14460	7086
14461	14461	7087
14462	14462	7088
14463	14463	7089
14464	14464	7090
14465	14465	7091
14466	14466	7092
14467	14467	7093
14468	14468	7094
14469	14469	7095
14470	14470	7096
14471	14471	7097
14472	14472	7098
14473	14473	7099
14474	14474	7100
14475	14475	7101
14476	14476	7102
14477	14477	7103
14478	14478	7104
14479	14479	7105
14480	14480	7106
14481	14481	7107
14482	14482	7108
14483	14483	7109
14484	14484	7110
14485	14485	7111
14486	14486	7112
14487	14487	7113 SB245 INTRODUCEDSB245 INTRODUCED
14488	14488	Page 255
14489	14489	(16) FILING ENTITY means an unincorporated entity,
14490	14490	other than a limited liability partnership, that is of a type
14491	14491	that is created by filing a public organic record or is
14492	14492	required to file a public organic record that evidences its
14493	14493	creation.
14494	14494	(17) FOREIGN CORPORATION means a corporation
14495	14495	incorporated under a law other than the law of this state
14496	14496	which would be a corporation if incorporated under the law of
14497	14497	this state.
14498	14498	(18) FOREIGN NONPROFIT CORPORATION means a corporation
14499	14499	incorporated under a law other than the law of this state
14500	14500	which would be a nonprofit corporation if incorporated under
14501	14501	the law of this state.
14502	14502	(19) GOVERNING STATUTE means the statute governing the
14503	14503	internal affairs of a corporation, foreign corporation,
14504	14504	nonprofit corporation, foreign nonprofit corporation,
14505	14505	unincorporated entity, or foreign unincorporated entity.
14506	14506	(20) GOVERNMENTAL SUBDIVISION includes authority,
14507	14507	county, district, and municipality.
14508	14508	(21) INCLUDES and INCLUDING denote a partial definition
14509	14509	or a nonexclusive list.
14510	14510	(22) INTEREST means either or both of the following
14511	14511	rights under the governing statute governing an unincorporated
14512	14512	entity:
14513	14513	(i) the right to receive distributions from the entity
14514	14514	either in the ordinary course or upon liquidation; or
14515	14515	(ii) the right to receive notice or vote on issues
14516	14516	involving its internal affairs, other than as an agent,
14517	14517	7114
14518	14518	7115
14519	14519	7116
14520	14520	7117
14521	14521	7118
14522	14522	7119
14523	14523	7120
14524	14524	7121
14525	14525	7122
14526	14526	7123
14527	14527	7124
14528	14528	7125
14529	14529	7126
14530	14530	7127
14531	14531	7128
14532	14532	7129
14533	14533	7130
14534	14534	7131
14535	14535	7132
14536	14536	7133
14537	14537	7134
14538	14538	7135
14539	14539	7136
14540	14540	7137
14541	14541	7138
14542	14542	7139
14543	14543	7140
14544	14544	7141 SB245 INTRODUCEDSB245 INTRODUCED
14545	14545	Page 256
14546	14546	assignee, proxy, or person responsible for managing its
14547	14547	business and affairs.
14548	14548	(23) INTEREST HOLDER means a person who holds of record
14549	14549	an interest.
14550	14550	(24) KNOWLEDGE is determined as follows:
14551	14551	(a) A person knows a fact when the person:
14552	14552	(1) has actual knowledge of it; or
14553	14553	(2) is deemed to know it under law other than this
14554	14554	chapter.
14555	14555	(b) A person has notice of a fact when the person:
14556	14556	(1) knows of it;
14557	14557	(2) receives notification of it in accordance with
14558	14558	Section 10A-2A-1.41;
14559	14559	(3) has reason to know the fact from all of the facts
14560	14560	known to the person at the time in question; or
14561	14561	(4) is deemed to have notice of the fact under
14562	14562	subsection (d).
14563	14563	(c) A person notifies another of a fact by taking steps
14564	14564	reasonably required to inform the other person in ordinary
14565	14565	course in accordance with Section 10A-2A-1.41, whether or not
14566	14566	the other person knows the fact.
14567	14567	(d) A person is deemed to have notice of a
14568	14568	corporation's:
14569	14569	(1) matters included in the certificate of
14570	14570	incorporation upon filing;
14571	14571	(2) dissolution, 90 days after a certificate of
14572	14572	dissolution under Section 10A-2A-14.03 becomes effective;
14573	14573	(3) conversion, merger, or interest exchange under
14574	14574	7142
14575	14575	7143
14576	14576	7144
14577	14577	7145
14578	14578	7146
14579	14579	7147
14580	14580	7148
14581	14581	7149
14582	14582	7150
14583	14583	7151
14584	14584	7152
14585	14585	7153
14586	14586	7154
14587	14587	7155
14588	14588	7156
14589	14589	7157
14590	14590	7158
14591	14591	7159
14592	14592	7160
14593	14593	7161
14594	14594	7162
14595	14595	7163
14596	14596	7164
14597	14597	7165
14598	14598	7166
14599	14599	7167
14600	14600	7168
14601	14601	7169 SB245 INTRODUCEDSB245 INTRODUCED
14602	14602	Page 257
14603	14603	Article 9 or Article 11, 90 days after a statement of
14604	14604	conversion, or statement of merger or interest exchange
14605	14605	becomes effective;
14606	14606	(4) conversion or merger under Article 8 of Chapter 1,
14607	14607	90 days after a statement of conversion or statement of merger
14608	14608	becomes effective; and
14609	14609	(5) revocation of dissolution and reinstatement, 90
14610	14610	days after certificate of revocation of dissolution and
14611	14611	reinstatement under Section 10A-2A-14.04 becomes effective.
14612	14612	(e) A stockholder's knowledge, notice, or receipt of a
14613	14613	notification of a fact relating to the corporation is not
14614	14614	knowledge, notice, or receipt of a notification of a fact by
14615	14615	the corporation solely by reason of the stockholder's capacity
14616	14616	as a stockholder.
14617	14617	(f) The date and time of the effectiveness of a notice
14618	14618	delivered in accordance with Section 10A-2A-1.41, is
14619	14619	determined by Section 10A-2A-1.41.
14620	14620	(25) MEANS denotes an exhaustive definition.
14621	14621	(26) MEMBERSHIP means the rights of a member in a
14622	14622	nonprofit corporation or foreign nonprofit corporation.
14623	14623	(27) MERGER means a transaction pursuant to Section
14624	14624	10A-2A-11.02.
14625	14625	(28)(27) ORGANIZATIONAL DOCUMENTS means the public
14626	14626	organic record and private organizational documents of a
14627	14627	corporation, foreign corporation, or eligible entity.
14628	14628	(29)(28) PRINCIPAL OFFICE means the office (in or out
14629	14629	of this state) so designated in the annual report where the
14630	14630	principal executive offices of a corporation or foreign
14631	14631	7170
14632	14632	7171
14633	14633	7172
14634	14634	7173
14635	14635	7174
14636	14636	7175
14637	14637	7176
14638	14638	7177
14639	14639	7178
14640	14640	7179
14641	14641	7180
14642	14642	7181
14643	14643	7182
14644	14644	7183
14645	14645	7184
14646	14646	7185
14647	14647	7186
14648	14648	7187
14649	14649	7188
14650	14650	7189
14651	14651	7190
14652	14652	7191
14653	14653	7192
14654	14654	7193
14655	14655	7194
14656	14656	7195
14657	14657	7196
14658	14658	7197 SB245 INTRODUCEDSB245 INTRODUCED
14659	14659	Page 258
14660	14660	corporation are located.
14661	14661	(30)(29) PRIVATE ORGANIZATIONAL DOCUMENTS means (i) the
14662	14662	bylaws of a corporation, foreign corporation, nonprofit
14663	14663	corporation, or foreign nonprofit corporation, or (ii) the
14664	14664	rules, regardless of whether in writing, that govern the
14665	14665	internal affairs of an unincorporated entity or foreign
14666	14666	unincorporated entity, are binding on all its interest
14667	14667	holders, and are not part of its public organic record, if
14668	14668	any. Where private organizational documents have been amended
14669	14669	or restated, the term means the private organizational
14670	14670	documents as last amended or restated.
14671	14671	(31)(30) PROCEEDING includes any civil suit and
14672	14672	criminal, administrative, and investigatory action.
14673	14673	(32)(31) PUBLIC ORGANIC RECORD means (i) the
14674	14674	certificate of incorporation of a corporation, foreign
14675	14675	corporation, nonprofit corporation, or foreign nonprofit
14676	14676	corporation, or (ii) the document, if any, the filing of which
14677	14677	is required to create an unincorporated entity or foreign
14678	14678	unincorporated entity, or which creates the unincorporated
14679	14679	entity or foreign unincorporated entity and is required to be
14680	14680	filed. Where a public organic record has been amended or
14681	14681	restated, the term means the public organic record as last
14682	14682	amended or restated.
14683	14683	(33)(32) RECORD DATE means the date fixed for
14684	14684	determining the identity of the corporation's stockholders and
14685	14685	their stockholdings for purposes of this chapter. Unless
14686	14686	another time is specified when the record date is fixed, the
14687	14687	determination shall be made as of the close of business at the
14688	14688	7198
14689	14689	7199
14690	14690	7200
14691	14691	7201
14692	14692	7202
14693	14693	7203
14694	14694	7204
14695	14695	7205
14696	14696	7206
14697	14697	7207
14698	14698	7208
14699	14699	7209
14700	14700	7210
14701	14701	7211
14702	14702	7212
14703	14703	7213
14704	14704	7214
14705	14705	7215
14706	14706	7216
14707	14707	7217
14708	14708	7218
14709	14709	7219
14710	14710	7220
14711	14711	7221
14712	14712	7222
14713	14713	7223
14714	14714	7224
14715	14715	7225 SB245 INTRODUCEDSB245 INTRODUCED
14716	14716	Page 259
14717	14717	principal office of the corporation on the date so fixed.
14718	14718	(34)(33) RECORD STOCKHOLDER means (i) the person in
14719	14719	whose name shares of stock are registered in the records of
14720	14720	the corporation, or (ii) the person identified as the
14721	14721	beneficial owner of stock in a beneficial ownership
14722	14722	certificate pursuant to Section 10A-2A-7.23 on file with the
14723	14723	corporation to the extent of the rights granted by such
14724	14724	certificate.
14725	14725	(35)(34) SECRETARY means the corporate officer to whom
14726	14726	the board of directors has delegated responsibility under
14727	14727	Section 10A-2A-8.40(c) to maintain the minutes of the meetings
14728	14728	of the board of directors and of the stockholders and for
14729	14729	authenticating records of the corporation.
14730	14730	(36)(35) STOCK EXCHANGE means a transaction pursuant to
14731	14731	Section 10A-2A-11.03.
14732	14732	(37)(36) STOCKHOLDER means a record stockholder.
14733	14733	(38)(37) STOCK means the units into which the
14734	14734	proprietary interests in a corporation or foreign corporation
14735	14735	are divided.
14736	14736	(39)(38) TYPE OF ENTITY means a generic form of entity:
14737	14737	(i) recognized at common law; or (ii) formed under a governing
14738	14738	statute, regardless of whether some entities formed under that
14739	14739	law are subject to provisions of that law that create
14740	14740	different categories of the form of entity.
14741	14741	(40)(39) UNINCORPORATED ENTITY means an organization or
14742	14742	artificial legal person that either has a separate legal
14743	14743	existence or has the power to acquire an estate in real
14744	14744	property in its own name and that is not any of the following:
14745	14745	7226
14746	14746	7227
14747	14747	7228
14748	14748	7229
14749	14749	7230
14750	14750	7231
14751	14751	7232
14752	14752	7233
14753	14753	7234
14754	14754	7235
14755	14755	7236
14756	14756	7237
14757	14757	7238
14758	14758	7239
14759	14759	7240
14760	14760	7241
14761	14761	7242
14762	14762	7243
14763	14763	7244
14764	14764	7245
14765	14765	7246
14766	14766	7247
14767	14767	7248
14768	14768	7249
14769	14769	7250
14770	14770	7251
14771	14771	7252
14772	14772	7253 SB245 INTRODUCEDSB245 INTRODUCED
14773	14773	Page 260
14774	14774	a corporation, foreign corporation, nonprofit corporation,
14775	14775	foreign nonprofit corporation, a series of a limited liability
14776	14776	company or of another type of entity, an estate, a trust, a
14777	14777	state, United States, or foreign government. The term includes
14778	14778	a general partnership, limited liability company, limited
14779	14779	partnership, business trust, joint stock association, and
14780	14780	unincorporated nonprofit association.
14781	14781	(41)(40) UNITED STATES includes any district,
14782	14782	authority, bureau, commission, department, and any other
14783	14783	agency of the United States.
14784	14784	(42)(41) UNRESTRICTED VOTING TRUST BENEFICIAL OWNER
14785	14785	means, with respect to any stockholder rights, a voting trust
14786	14786	beneficial owner whose entitlement to exercise the stockholder
14787	14787	right in question is not inconsistent with the voting trust
14788	14788	agreement.
14789	14789	(43)(42) VOTING GROUP means all stock of one or more
14790	14790	classes or series that under the certificate of incorporation
14791	14791	or this chapter are entitled to vote and be counted together
14792	14792	collectively on a matter at a meeting of stockholders. All
14793	14793	stock entitled by the certificate of incorporation or this
14794	14794	chapter to vote generally on the matter is for that purpose a
14795	14795	single voting group.
14796	14796	(44)(43) VOTING POWER means the current power to vote
14797	14797	in the election of directors.
14798	14798	(45)(44) VOTING TRUST BENEFICIAL OWNER means an owner
14799	14799	of a beneficial interest in stock of the corporation held in a
14800	14800	voting trust established pursuant to Section 10A-2A-7.30(a)."
14801	14801	"§10A-2A-1.43
14802	14802	7254
14803	14803	7255
14804	14804	7256
14805	14805	7257
14806	14806	7258
14807	14807	7259
14808	14808	7260
14809	14809	7261
14810	14810	7262
14811	14811	7263
14812	14812	7264
14813	14813	7265
14814	14814	7266
14815	14815	7267
14816	14816	7268
14817	14817	7269
14818	14818	7270
14819	14819	7271
14820	14820	7272
14821	14821	7273
14822	14822	7274
14823	14823	7275
14824	14824	7276
14825	14825	7277
14826	14826	7278
14827	14827	7279
14828	14828	7280
14829	14829	7281 SB245 INTRODUCEDSB245 INTRODUCED
14830	14830	Page 261
14831	14831	(a) A "qualified director" is a director who, at the
14832	14832	time action is to be taken under:
14833	14833	(1) Section 10A-2A-2.02(b)(6), is not a director (i) to
14834	14834	whom the limitation or elimination of the duty of an officer
14835	14835	to offer potential business opportunities to the corporation
14836	14836	would apply, or (ii) who has a material relationship with any
14837	14837	other person to whom the limitation or elimination would
14838	14838	apply;
14839	14839	(2) Section 10A-2A-7.44, does not have (i) a material
14840	14840	interest in the outcome of the proceeding, or (ii) a material
14841	14841	relationship with a person who has such an interest;
14842	14842	(3)(2) Section 10A-2A-8.53 or Section 10A-2A-8.55, (i)
14843	14843	is not a party to the proceeding, (ii) is not a director as to
14844	14844	whom a transaction is a director's conflicting interest
14845	14845	transaction or who sought a disclaimer of the corporation's
14846	14846	interest in a business opportunity under Section 10A-2A-8.60,
14847	14847	which transaction or disclaimer is challenged, and (iii) does
14848	14848	not have a material relationship with a director described in
14849	14849	either clause (i) or clause (ii) of this subsection (a)(3)
14850	14850	(a)(2); or
14851	14851	(4)(3) Section 10A-2A-8.60, is not a director (i) as to
14852	14852	whom the contract or transaction is a director's conflicting
14853	14853	interest transaction, (ii) who has a material relationship
14854	14854	with another director as to whom the transaction is a
14855	14855	director's conflicting interest transaction, (iii) pursues or
14856	14856	takes advantage of the business opportunity, directly, or
14857	14857	indirectly through or on behalf of another person, or (iv) has
14858	14858	a material relationship with a director or officer who pursues
14859	14859	7282
14860	14860	7283
14861	14861	7284
14862	14862	7285
14863	14863	7286
14864	14864	7287
14865	14865	7288
14866	14866	7289
14867	14867	7290
14868	14868	7291
14869	14869	7292
14870	14870	7293
14871	14871	7294
14872	14872	7295
14873	14873	7296
14874	14874	7297
14875	14875	7298
14876	14876	7299
14877	14877	7300
14878	14878	7301
14879	14879	7302
14880	14880	7303
14881	14881	7304
14882	14882	7305
14883	14883	7306
14884	14884	7307
14885	14885	7308
14886	14886	7309 SB245 INTRODUCEDSB245 INTRODUCED
14887	14887	Page 262
14888	14888	or takes advantage of the business opportunity, directly, or
14889	14889	indirectly through or on behalf of another person.
14890	14890	(b) For purposes of this section:
14891	14891	(1) "material relationship" means a familial,
14892	14892	financial, professional, employment, or other relationship
14893	14893	that would reasonably be expected to impair the objectivity of
14894	14894	the director's judgment when participating in the action to be
14895	14895	taken; and
14896	14896	(2) "material interest" means an actual or potential
14897	14897	benefit or detriment (other than one which would devolve on
14898	14898	the corporation or the stockholders generally) that would
14899	14899	reasonably be expected to impair the objectivity of the
14900	14900	director's judgment when participating in the action to be
14901	14901	taken.
14902	14902	(c) The presence of one or more of the following
14903	14903	circumstances shall not automatically prevent a director from
14904	14904	being a qualified director:
14905	14905	(1) nomination or election of the director to the
14906	14906	current board of directors by any director who is not a
14907	14907	qualified director with respect to the matter (or by any
14908	14908	person that has a material relationship with that director),
14909	14909	acting alone or participating with others; or
14910	14910	(2) service as a director of another corporation of
14911	14911	which a director who is not a qualified director with respect
14912	14912	to the matter (or any individual who has a material
14913	14913	relationship with that director), is or was also a director ;
14914	14914	or.
14915	14915	(3) with respect to action to be taken under Section
14916	14916	7310
14917	14917	7311
14918	14918	7312
14919	14919	7313
14920	14920	7314
14921	14921	7315
14922	14922	7316
14923	14923	7317
14924	14924	7318
14925	14925	7319
14926	14926	7320
14927	14927	7321
14928	14928	7322
14929	14929	7323
14930	14930	7324
14931	14931	7325
14932	14932	7326
14933	14933	7327
14934	14934	7328
14935	14935	7329
14936	14936	7330
14937	14937	7331
14938	14938	7332
14939	14939	7333
14940	14940	7334
14941	14941	7335
14942	14942	7336
14943	14943	7337 SB245 INTRODUCEDSB245 INTRODUCED
14944	14944	Page 263
14945	14945	10A-2A-7.44, status as a named defendant, as a director
14946	14946	against whom action is demanded, or as a director who approved
14947	14947	the conduct being challenged. "
14948	14948	"§10A-2A-1.51
14949	14949	(a) If the defective corporate action ratified under
14950	14950	this Division D of Article 1 would have required under any
14951	14951	other section of this chapter a filing in accordance with this
14952	14952	chapter, then, regardless of whether a filing was previously
14953	14953	made in respect of such defective corporate action and in lieu
14954	14954	of a filing otherwise required by this chapter, the
14955	14955	corporation shall file a certificate of validation in
14956	14956	accordance with this section, and that certificate of
14957	14957	validation shall serve to amend or substitute for any other
14958	14958	filing with respect to such defective corporate action
14959	14959	required by this chapter.
14960	14960	(b) The certificate of validation must set forth:
14961	14961	(1) the name of the corporation;
14962	14962	(2) the unique identifying number or other designation
14963	14963	as assigned by the Secretary of State;
14964	14964	(1)(3) the defective corporate action that is the
14965	14965	subject of the certificate of validation (including, in the
14966	14966	case of any defective corporate action involving the issuance
14967	14967	of putative stock, the number and type of shares of putative
14968	14968	stock issued and the date or dates upon which that putative
14969	14969	stock was purported to have been issued);
14970	14970	(2)(4) the date of the defective corporate action;
14971	14971	(3)(5) the nature of the failure of authorization in
14972	14972	respect of the defective corporate action;
14973	14973	7338
14974	14974	7339
14975	14975	7340
14976	14976	7341
14977	14977	7342
14978	14978	7343
14979	14979	7344
14980	14980	7345
14981	14981	7346
14982	14982	7347
14983	14983	7348
14984	14984	7349
14985	14985	7350
14986	14986	7351
14987	14987	7352
14988	14988	7353
14989	14989	7354
14990	14990	7355
14991	14991	7356
14992	14992	7357
14993	14993	7358
14994	14994	7359
14995	14995	7360
14996	14996	7361
14997	14997	7362
14998	14998	7363
14999	14999	7364
15000	15000	7365 SB245 INTRODUCEDSB245 INTRODUCED
15001	15001	Page 264
15002	15002	(4)(6) a statement that the defective corporate action
15003	15003	was ratified in accordance with Section 10A-2A-1.47, including
15004	15004	the date on which the board of directors ratified that
15005	15005	defective corporate action and the date, if any, on which the
15006	15006	stockholders approved the ratification of that defective
15007	15007	corporate action; and
15008	15008	(5)(7) the information required by subsection (c).
15009	15009	(c) The certificate of validation must also contain the
15010	15010	following information:
15011	15011	(1) if a filing was previously made in respect of the
15012	15012	defective corporate action and no changes to that filing are
15013	15013	required to give effect to the ratification of that defective
15014	15014	corporate action in accordance with Section 10A-2A-1.47, the
15015	15015	certificate of validation must set forth (i) the name, title,
15016	15016	and filing date of the filing previously made and any
15017	15017	certificate of correction to that filing, and (ii) a statement
15018	15018	that a copy of the filing previously made, together with any
15019	15019	certificate of correction to that filing, is attached as an
15020	15020	exhibit to the certificate of validation;
15021	15021	(2) if a filing was previously made in respect of the
15022	15022	defective corporate action and that filing requires any change
15023	15023	to give effect to the ratification of that defective corporate
15024	15024	action in accordance with Section 10A-2A-1.47, the certificate
15025	15025	of validation must set forth (i) the name, title, and filing
15026	15026	date of the filing previously made and any certificate of
15027	15027	correction to that filing , and (ii) a statement that a filing
15028	15028	containing all of the information required to be included
15029	15029	under the applicable section or sections of this chapter to
15030	15030	7366
15031	15031	7367
15032	15032	7368
15033	15033	7369
15034	15034	7370
15035	15035	7371
15036	15036	7372
15037	15037	7373
15038	15038	7374
15039	15039	7375
15040	15040	7376
15041	15041	7377
15042	15042	7378
15043	15043	7379
15044	15044	7380
15045	15045	7381
15046	15046	7382
15047	15047	7383
15048	15048	7384
15049	15049	7385
15050	15050	7386
15051	15051	7387
15052	15052	7388
15053	15053	7389
15054	15054	7390
15055	15055	7391
15056	15056	7392
15057	15057	7393 SB245 INTRODUCEDSB245 INTRODUCED
15058	15058	Page 265
15059	15059	give effect to that defective corporate action is attached as
15060	15060	an exhibit to the certificate of validation, and (iii) the
15061	15061	date and time that filing is deemed to have become effective;
15062	15062	or
15063	15063	(3) if a filing was not previously made in respect of
15064	15064	the defective corporate action and the defective corporate
15065	15065	action ratified under Section 10A-2A-1.47 would have required
15066	15066	a filing under any other section of this chapter, the
15067	15067	certificate of validation must set forth (i) a statement that
15068	15068	a filing containing all of the information required to be
15069	15069	included under the applicable section or sections of this
15070	15070	chapter to give effect to that defective corporate action is
15071	15071	attached as an exhibit to the certificate of validation, and
15072	15072	(ii) the date and time that filing is deemed to have become
15073	15073	effective."
15074	15074	"§10A-2A-2.02
15075	15075	Section 10A-1-3.05 shall not apply to this chapter.
15076	15076	Instead:
15077	15077	(a) The certificate of incorporation must set forth:
15078	15078	(1) a corporate name for the corporation that satisfies
15079	15079	the requirements of Article 5 of Chapter 1;
15080	15080	(2) the number of shares of stock the corporation is
15081	15081	authorized to issue;
15082	15082	(3) the street and mailing addresses of the
15083	15083	corporation's initial registered office, the county within
15084	15084	this state in which the street and mailing address is located,
15085	15085	and the name of the corporation's initial registered agent at
15086	15086	that office as required by Article 5 of Chapter 1; and
15087	15087	7394
15088	15088	7395
15089	15089	7396
15090	15090	7397
15091	15091	7398
15092	15092	7399
15093	15093	7400
15094	15094	7401
15095	15095	7402
15096	15096	7403
15097	15097	7404
15098	15098	7405
15099	15099	7406
15100	15100	7407
15101	15101	7408
15102	15102	7409
15103	15103	7410
15104	15104	7411
15105	15105	7412
15106	15106	7413
15107	15107	7414
15108	15108	7415
15109	15109	7416
15110	15110	7417
15111	15111	7418
15112	15112	7419
15113	15113	7420
15114	15114	7421 SB245 INTRODUCEDSB245 INTRODUCED
15115	15115	Page 266
15116	15116	(4) the name and address of each incorporator.
15117	15117	(b) The certificate of incorporation may set forth:
15118	15118	(1) the names and addresses of the individuals who are
15119	15119	to serve as the initial directors;
15120	15120	(2) provisions not inconsistent with law regarding:
15121	15121	(i) the purpose or purposes for which the corporation
15122	15122	is organized;
15123	15123	(ii) managing the business and regulating the affairs
15124	15124	of the corporation;
15125	15125	(iii) defining, limiting, and regulating the powers of
15126	15126	the corporation, its board of directors, and stockholders;
15127	15127	(iv) a par value for authorized stock or classes of
15128	15128	stock; or
15129	15129	(v) subject to subsection (f), a provision imposing
15130	15130	personal liability for the debts of the corporation on its
15131	15131	stockholders to a specified extent and upon specified
15132	15132	conditions; otherwise, the stockholders of a corporation shall
15133	15133	not be personally liable for the payment of the corporation's
15134	15134	debts, except as they may be liable by reason of their own
15135	15135	conduct or acts;
15136	15136	(3) any provision that under this chapter is permitted
15137	15137	to be set forth in the certificate of incorporation or
15138	15138	required or permitted to be set forth in the bylaws;
15139	15139	(4) a provision eliminating or limiting the liability
15140	15140	of a director to the corporation or its stockholders for money
15141	15141	damages for any action taken, or any failure to take any
15142	15142	action, as a director, except liability for (i) the amount of
15143	15143	a financial benefit received by a director to which the
15144	15144	7422
15145	15145	7423
15146	15146	7424
15147	15147	7425
15148	15148	7426
15149	15149	7427
15150	15150	7428
15151	15151	7429
15152	15152	7430
15153	15153	7431
15154	15154	7432
15155	15155	7433
15156	15156	7434
15157	15157	7435
15158	15158	7436
15159	15159	7437
15160	15160	7438
15161	15161	7439
15162	15162	7440
15163	15163	7441
15164	15164	7442
15165	15165	7443
15166	15166	7444
15167	15167	7445
15168	15168	7446
15169	15169	7447
15170	15170	7448
15171	15171	7449 SB245 INTRODUCEDSB245 INTRODUCED
15172	15172	Page 267
15173	15173	director is not entitled; (ii) an intentional infliction of
15174	15174	harm on the corporation or the stockholders; (iii) a violation
15175	15175	of Section 10A-2A-8.32; or (iv) an intentional violation of
15176	15176	criminal law;
15177	15177	(5) a provision permitting or making obligatory
15178	15178	indemnification of a director for liability as defined in
15179	15179	Section 10A-2A-8.50 to any person for any action taken, or any
15180	15180	failure to take any action, as a director, except liability
15181	15181	for (i) receipt of a financial benefit to which the director
15182	15182	is not entitled, (ii) an intentional infliction of harm on the
15183	15183	corporation or its stockholders, (iii) a violation of Section
15184	15184	10A-2A-8.32, or (iv) an intentional violation of criminal law;
15185	15185	and
15186	15186	(6) a provision limiting or eliminating any duty of a
15187	15187	director or any other person to offer the corporation the
15188	15188	right to have or participate in any, or one or more classes or
15189	15189	categories of, business opportunities, before the pursuit or
15190	15190	taking of the opportunity by the director or other person;
15191	15191	provided that any application of that provision to an officer
15192	15192	or a related person of that officer (i) also requires approval
15193	15193	of that application by the board of directors, subsequent to
15194	15194	the effective date of the provision, by action of qualified
15195	15195	directors taken in compliance with the same procedures as are
15196	15196	set forth in Section 10A-2A-8.60, and (ii) may be limited by
15197	15197	the authorizing action of the board of directors.
15198	15198	(c) The certificate of incorporation need not set forth
15199	15199	any of the corporate powers enumerated in Sections 10A-1-2.11,
15200	15200	10A-1-2.12, and 10A-1-2.13.
15201	15201	7450
15202	15202	7451
15203	15203	7452
15204	15204	7453
15205	15205	7454
15206	15206	7455
15207	15207	7456
15208	15208	7457
15209	15209	7458
15210	15210	7459
15211	15211	7460
15212	15212	7461
15213	15213	7462
15214	15214	7463
15215	15215	7464
15216	15216	7465
15217	15217	7466
15218	15218	7467
15219	15219	7468
15220	15220	7469
15221	15221	7470
15222	15222	7471
15223	15223	7472
15224	15224	7473
15225	15225	7474
15226	15226	7475
15227	15227	7476
15228	15228	7477 SB245 INTRODUCEDSB245 INTRODUCED
15229	15229	Page 268
15230	15230	(d) Provisions of the certificate of incorporation may
15231	15231	be made dependent upon facts objectively ascertainable outside
15232	15232	the certificate of incorporation in accordance with Section
15233	15233	10A-2A-1.20(c).
15234	15234	(e) As used in this section, "related person" has the
15235	15235	meaning specified in Section 10A-2A-8.60 means:
15236	15236	(i) the individual's spouse;
15237	15237	(ii) a child, stepchild, grandchild, parent,
15238	15238	stepparent, grandparent, sibling, stepsibling, half sibling,
15239	15239	aunt, uncle, niece, or nephew (or spouse of any such person)
15240	15240	of the individual or of the individual's spouse;
15241	15241	(iii) a natural person living in the same home as the
15242	15242	individual;
15243	15243	(iv) an entity (other than the corporation or an entity
15244	15244	controlled by the corporation) controlled by the individual or
15245	15245	any person specified above in this definition;
15246	15246	(v) a domestic or foreign:
15247	15247	(A) business or nonprofit corporation (other than the
15248	15248	corporation or an entity controlled by the corporation) of
15249	15249	which the individual is a director;
15250	15250	(B) unincorporated entity of which the individual is a
15251	15251	general partner or a member of the governing authority; or
15252	15252	(C) individual, trust or estate for whom or of which
15253	15253	the individual is a trustee, guardian, personal
15254	15254	representative, or like fiduciary; or
15255	15255	(vi) a person that is, or an entity that is, controlled
15256	15256	by an employer of the individual .
15257	15257	(f) The certificate of incorporation may not contain
15258	15258	7478
15259	15259	7479
15260	15260	7480
15261	15261	7481
15262	15262	7482
15263	15263	7483
15264	15264	7484
15265	15265	7485
15266	15266	7486
15267	15267	7487
15268	15268	7488
15269	15269	7489
15270	15270	7490
15271	15271	7491
15272	15272	7492
15273	15273	7493
15274	15274	7494
15275	15275	7495
15276	15276	7496
15277	15277	7497
15278	15278	7498
15279	15279	7499
15280	15280	7500
15281	15281	7501
15282	15282	7502
15283	15283	7503
15284	15284	7504
15285	15285	7505 SB245 INTRODUCEDSB245 INTRODUCED
15286	15286	Page 269
15287	15287	any provision that would impose liability on a stockholder for
15288	15288	the attorney's fees or expenses of the corporation or any
15289	15289	other party in connection with an internal corporate claim, as
15290	15290	defined in Section 10A-2A-2.07(d).
15291	15291	(g) The certificate of incorporation is part of a
15292	15292	binding contract between the corporation and the stockholders,
15293	15293	subject to the provisions of this chapter."
15294	15294	"§10A-2A-2.06
15295	15295	(a) Unless the certificate of incorporation provides
15296	15296	otherwise, the board of directors may adopt bylaws may be
15297	15297	adopted to be effective only in an emergency defined in
15298	15298	subsection (d). The emergency bylaws, which are subject to
15299	15299	amendment or repeal by the stockholders, may make all
15300	15300	provisions necessary for managing the corporation during the
15301	15301	emergency, including:
15302	15302	(1) procedures for calling a meeting of the board of
15303	15303	directors;
15304	15304	(2) quorum requirements for the meeting; and
15305	15305	(3) designation of additional or substitute directors.
15306	15306	(b) All provisions of the regular bylaws not
15307	15307	inconsistent with the emergency bylaws remain effective during
15308	15308	the emergency. The emergency bylaws are not effective after
15309	15309	the emergency ends.
15310	15310	(c) Corporate action taken in good faith in accordance
15311	15311	with the emergency bylaws:
15312	15312	(1) binds the corporation; and
15313	15313	(2) may not be used to impose liability on a director,
15314	15314	officer, employee, or agent of the corporation.
15315	15315	7506
15316	15316	7507
15317	15317	7508
15318	15318	7509
15319	15319	7510
15320	15320	7511
15321	15321	7512
15322	15322	7513
15323	15323	7514
15324	15324	7515
15325	15325	7516
15326	15326	7517
15327	15327	7518
15328	15328	7519
15329	15329	7520
15330	15330	7521
15331	15331	7522
15332	15332	7523
15333	15333	7524
15334	15334	7525
15335	15335	7526
15336	15336	7527
15337	15337	7528
15338	15338	7529
15339	15339	7530
15340	15340	7531
15341	15341	7532
15342	15342	7533 SB245 INTRODUCEDSB245 INTRODUCED
15343	15343	Page 270
15344	15344	(d) An emergency exists for purposes of this section if
15345	15345	a quorum of the board of directors cannot readily be assembled
15346	15346	because of some catastrophic event."
15347	15347	"§10A-2A-7.04
15348	15348	(a) Unless otherwise provided in the certificate of
15349	15349	incorporation, any action required or permitted by this
15350	15350	chapter to be taken at any meeting of the stockholders may be
15351	15351	taken without a meeting, and without prior notice, if one or
15352	15352	more consents in writing setting forth the action so taken are
15353	15353	signed by the holders of outstanding stock having not less
15354	15354	than the minimum number of votes that would be required to
15355	15355	authorize or take the action at a meeting at which all shares
15356	15356	of stock entitled to vote on the action were present and
15357	15357	voted; provided, however, that if a corporation's certificate
15358	15358	of incorporation authorizes stockholders to cumulate their
15359	15359	votes when electing directors pursuant to Section 10A-2A-7.28,
15360	15360	directors may not be elected by less than unanimous written
15361	15361	consent. The action must be evidenced by one or more written
15362	15362	consents describing the action taken, signed by the
15363	15363	stockholders approving the action and delivered to the
15364	15364	corporation for filing by the corporation with the minutes or
15365	15365	corporate records.
15366	15366	(b) If not otherwise fixed under Section 10A-2A-7.07
15367	15367	and if prior action by the board of directors is not required
15368	15368	respecting the action to be taken without a meeting, the
15369	15369	record date for determining the stockholders entitled to take
15370	15370	action without a meeting shall be the first date on which a
15371	15371	signed written consent is delivered to the corporation. If not
15372	15372	7534
15373	15373	7535
15374	15374	7536
15375	15375	7537
15376	15376	7538
15377	15377	7539
15378	15378	7540
15379	15379	7541
15380	15380	7542
15381	15381	7543
15382	15382	7544
15383	15383	7545
15384	15384	7546
15385	15385	7547
15386	15386	7548
15387	15387	7549
15388	15388	7550
15389	15389	7551
15390	15390	7552
15391	15391	7553
15392	15392	7554
15393	15393	7555
15394	15394	7556
15395	15395	7557
15396	15396	7558
15397	15397	7559
15398	15398	7560
15399	15399	7561 SB245 INTRODUCEDSB245 INTRODUCED
15400	15400	Page 271
15401	15401	otherwise fixed under Section 10A-2A-7.07 and if prior action
15402	15402	by the board of directors is required respecting the action to
15403	15403	be taken without a meeting, the record date shall be the close
15404	15404	of business on the day the resolution of the board of
15405	15405	directors taking the prior action is adopted. No written
15406	15406	consent shall be effective to take the corporate action
15407	15407	referred to therein unless, within 60 days of the earliest
15408	15408	date on which a consent is delivered to the corporation as
15409	15409	required by this section, written consents signed by
15410	15410	sufficient stockholders to take the action have been delivered
15411	15411	to the corporation. Any person executing a consent may
15412	15412	provide, whether through instruction to an agent or otherwise,
15413	15413	that such consent will be effective at a future time,
15414	15414	including a time determined upon the happening of an event,
15415	15415	occurring not later than 60 days after such instruction is
15416	15416	given or such provision is made, if evidence of the
15417	15417	instruction or provision is provided to the corporation. A
15418	15418	written consent may be revoked by a writing to that effect
15419	15419	delivered to the corporation before unrevoked written consents
15420	15420	sufficient in number to take the corporate action have been
15421	15421	delivered to the corporation.
15422	15422	(c) A consent signed pursuant to the provisions of this
15423	15423	section has the effect of a vote taken at a meeting and may be
15424	15424	described as such in any document. Unless the certificate of
15425	15425	incorporation, bylaws or a resolution of the board of
15426	15426	directors provides for a reasonable delay to permit tabulation
15427	15427	of written consents, the action taken by written consent shall
15428	15428	be effective when written consents signed by sufficient
15429	15429	7562
15430	15430	7563
15431	15431	7564
15432	15432	7565
15433	15433	7566
15434	15434	7567
15435	15435	7568
15436	15436	7569
15437	15437	7570
15438	15438	7571
15439	15439	7572
15440	15440	7573
15441	15441	7574
15442	15442	7575
15443	15443	7576
15444	15444	7577
15445	15445	7578
15446	15446	7579
15447	15447	7580
15448	15448	7581
15449	15449	7582
15450	15450	7583
15451	15451	7584
15452	15452	7585
15453	15453	7586
15454	15454	7587
15455	15455	7588
15456	15456	7589 SB245 INTRODUCEDSB245 INTRODUCED
15457	15457	Page 272
15458	15458	stockholders to take the action have been delivered to the
15459	15459	corporation.
15460	15460	(d) If this chapter requires that notice of a proposed
15461	15461	action be given to nonvoting stockholders and the action is to
15462	15462	be taken by written consent of the voting stockholders, the
15463	15463	corporation shall give its nonvoting stockholders written
15464	15464	notice of the action not more than 10 days after (i) written
15465	15465	consents sufficient to take the action have been delivered to
15466	15466	the corporation, or (ii) any later date that tabulation of
15467	15467	consents is completed pursuant to an authorization under
15468	15468	subsection (c). The notice must reasonably describe the action
15469	15469	taken and contain or be accompanied by the same material that,
15470	15470	under any provision of this chapter, would have been required
15471	15471	to be sent to nonvoting stockholders in a notice of a meeting
15472	15472	at which the proposed action would have been submitted to the
15473	15473	stockholders for action.
15474	15474	(e) If action is taken by less than unanimous written
15475	15475	consent of the voting stockholders, the corporation shall give
15476	15476	its nonconsenting voting stockholders written notice of the
15477	15477	action not more than 10 days after (i) written consents
15478	15478	sufficient to take the action have been delivered to the
15479	15479	corporation, or (ii) any later date that tabulation of
15480	15480	consents is completed pursuant to an authorization under
15481	15481	subsection (c). The notice must reasonably describe the action
15482	15482	taken and contain or be accompanied by the same material that,
15483	15483	under any provision of this chapter, would have been required
15484	15484	to be sent to voting stockholders in a notice of a meeting at
15485	15485	which the action would have been submitted to the stockholders
15486	15486	7590
15487	15487	7591
15488	15488	7592
15489	15489	7593
15490	15490	7594
15491	15491	7595
15492	15492	7596
15493	15493	7597
15494	15494	7598
15495	15495	7599
15496	15496	7600
15497	15497	7601
15498	15498	7602
15499	15499	7603
15500	15500	7604
15501	15501	7605
15502	15502	7606
15503	15503	7607
15504	15504	7608
15505	15505	7609
15506	15506	7610
15507	15507	7611
15508	15508	7612
15509	15509	7613
15510	15510	7614
15511	15511	7615
15512	15512	7616
15513	15513	7617 SB245 INTRODUCEDSB245 INTRODUCED
15514	15514	Page 273
15515	15515	for action.
15516	15516	(f) The notice requirements in subsections (d) and (e)
15517	15517	shall not delay the effectiveness of actions taken by written
15518	15518	consent, and a failure to comply with those notice
15519	15519	requirements shall not invalidate actions taken by written
15520	15520	consent, provided that this subsection shall not be deemed to
15521	15521	limit judicial power to fashion any appropriate remedy in
15522	15522	favor of a stockholder adversely affected by a failure to give
15523	15523	the notice within the required time period."
15524	15524	"§10A-2A-7.20
15525	15525	(a) After fixing a record date for a meeting, a
15526	15526	corporation shall prepare an alphabetical list of the names of
15527	15527	all its stockholders who are entitled to notice of the
15528	15528	stockholders' meeting. If the board of directors fixes a
15529	15529	different record date under Section 10A-2A-7.07(e) to
15530	15530	determine the stockholders entitled to vote at the meeting, a
15531	15531	corporation also shall prepare an alphabetical list of the
15532	15532	names of all its stockholders who are entitled to vote at the
15533	15533	meeting. Each list must be arranged by voting group (and
15534	15534	within each voting group by class or series of stock) and
15535	15535	contain the address of, and number and class or series of
15536	15536	shares of stock held by, each stockholder, and if the notice
15537	15537	or other communications regarding the meeting have been or
15538	15538	will be sent by the corporation to a stockholder by electronic
15539	15539	mail or other electronic transmission, the electronic mail or
15540	15540	other electronic transmission address of that stockholder.
15541	15541	(b) The list of stockholders entitled to notice and to
15542	15542	vote shall be available for inspection by any stockholder ,
15543	15543	7618
15544	15544	7619
15545	15545	7620
15546	15546	7621
15547	15547	7622
15548	15548	7623
15549	15549	7624
15550	15550	7625
15551	15551	7626
15552	15552	7627
15553	15553	7628
15554	15554	7629
15555	15555	7630
15556	15556	7631
15557	15557	7632
15558	15558	7633
15559	15559	7634
15560	15560	7635
15561	15561	7636
15562	15562	7637
15563	15563	7638
15564	15564	7639
15565	15565	7640
15566	15566	7641
15567	15567	7642
15568	15568	7643
15569	15569	7644
15570	15570	7645 SB245 INTRODUCEDSB245 INTRODUCED
15571	15571	Page 274
15572	15572	beginning two business days after notice of no later than the
15573	15573	tenth day before each meeting of stockholders; provided,
15574	15574	however, if the record date for determining the stockholders
15575	15575	entitled to vote is less than 10 days before the meeting is
15576	15576	given for which the list was prepared and continuing through
15577	15577	the meeting, date, the list shall reflect the stockholders
15578	15578	entitled to vote as of the tenth day before the meeting date.
15579	15579	The list shall be available (i) at the corporation's principal
15580	15580	office or at a place identified in the meeting notice in the
15581	15581	city where the meeting will be held or (ii) on a reasonably
15582	15582	accessible electronic network, provided that the information
15583	15583	required to gain access to such list is provided with the
15584	15584	notice of the meeting. The list of stockholders entitled to
15585	15585	vote shall be similarly available for inspection promptly
15586	15586	after the record date for voting. In the event that the
15587	15587	corporation determines to make a list of stockholders
15588	15588	available on an electronic network, the corporation may take
15589	15589	reasonable steps to ensure that such information is available
15590	15590	only to stockholders of the corporation. A stockholder, or the
15591	15591	stockholder's agent or attorney, is entitled on written demand
15592	15592	to inspect and, subject to the requirements of Section
15593	15593	10A-2A-16.02(c), to copy a list of stockholders, during
15594	15594	regular business hours and at the stockholder's expense,
15595	15595	during the period it is available for inspection. A
15596	15596	corporation may satisfy the stockholder's right to copy a list
15597	15597	of stockholders by furnishing a copy in the manner described
15598	15598	in Section 10A-2A-16.03(b). A stockholder and the
15599	15599	stockholder's agent or attorney who inspects or is furnished a
15600	15600	7646
15601	15601	7647
15602	15602	7648
15603	15603	7649
15604	15604	7650
15605	15605	7651
15606	15606	7652
15607	15607	7653
15608	15608	7654
15609	15609	7655
15610	15610	7656
15611	15611	7657
15612	15612	7658
15613	15613	7659
15614	15614	7660
15615	15615	7661
15616	15616	7662
15617	15617	7663
15618	15618	7664
15619	15619	7665
15620	15620	7666
15621	15621	7667
15622	15622	7668
15623	15623	7669
15624	15624	7670
15625	15625	7671
15626	15626	7672
15627	15627	7673 SB245 INTRODUCEDSB245 INTRODUCED
15628	15628	Page 275
15629	15629	copy of a list of stockholders under this subsection (b) or
15630	15630	under subsection (c) or who copies the list under this
15631	15631	subsection (b) may use the information on that list only for
15632	15632	purposes related to the meeting and its subject matter and
15633	15633	must keep the information on that list confidential.
15634	15634	(c) If the meeting is to be held at a place, the
15635	15635	corporation shall make the list of stockholders entitled to
15636	15636	vote available at the meeting and any adjournment, and any
15637	15637	stockholder, or the stockholder's agent or attorney, is
15638	15638	entitled to inspect the list at any time during the meeting
15639	15639	and any adjournment. If the meeting is to be held solely by
15640	15640	means of remote communication, then such list shall also be
15641	15641	available for such inspection during the meeting and any
15642	15642	adjournment on a reasonably accessible electronic network, and
15643	15643	the information required to access such list shall be provided
15644	15644	with the notice of the meeting. The corporation may satisfy
15645	15645	its obligation to make such list available for inspection
15646	15646	during a meeting by furnishing a copy of the list in the
15647	15647	manner described in Section 10A-2A-16.03(b) to the
15648	15648	stockholders prior to the meeting.
15649	15649	(d)(c) If the corporation refuses to allow a
15650	15650	stockholder, or the stockholder's agent or attorney, to
15651	15651	inspect a list of stockholders before or at the meeting or any
15652	15652	adjournment (or copy a list as permitted by subsection (b)),
15653	15653	the designated court, and if none, the circuit court for the
15654	15654	county in which the corporation's principal office is located
15655	15655	in this state, and if none in this state, the circuit court
15656	15656	for the county in which the corporation's most recent
15657	15657	7674
15658	15658	7675
15659	15659	7676
15660	15660	7677
15661	15661	7678
15662	15662	7679
15663	15663	7680
15664	15664	7681
15665	15665	7682
15666	15666	7683
15667	15667	7684
15668	15668	7685
15669	15669	7686
15670	15670	7687
15671	15671	7688
15672	15672	7689
15673	15673	7690
15674	15674	7691
15675	15675	7692
15676	15676	7693
15677	15677	7694
15678	15678	7695
15679	15679	7696
15680	15680	7697
15681	15681	7698
15682	15682	7699
15683	15683	7700
15684	15684	7701 SB245 INTRODUCEDSB245 INTRODUCED
15685	15685	Page 276
15686	15686	registered office is located, on application of the
15687	15687	stockholder, may summarily order the inspection or copying at
15688	15688	the corporation's expense and may postpone the meeting for
15689	15689	which the list was prepared until the inspection or copying is
15690	15690	complete.
15691	15691	(e)(d) Refusal or failure to prepare or make available
15692	15692	a list of stockholders does not affect the validity of action
15693	15693	taken at the meeting.
15694	15694	(f)(e) The stock transfer records of the corporation
15695	15695	shall be prima facie evidence as to who are the stockholders
15696	15696	entitled to examine the stockholders' list or transfer records
15697	15697	or to vote at any meeting of stockholders."
15698	15698	"§10A-2A-7.32
15699	15699	(a) An agreement among the stockholders of a
15700	15700	corporation that complies with this section is effective among
15701	15701	the stockholders and the corporation even though it is
15702	15702	inconsistent with one or more other provisions of this chapter
15703	15703	in that it:
15704	15704	(1) eliminates the board of directors or restricts the
15705	15705	discretion or powers of the board of directors;
15706	15706	(2) governs the authorization or making of
15707	15707	distributions, regardless of whether they are in proportion to
15708	15708	ownership of stock, subject to the limitations in Section
15709	15709	10A-2A-6.40;
15710	15710	(3) establishes who shall be directors or officers of
15711	15711	the corporation, or their terms of office or manner of
15712	15712	selection or removal;
15713	15713	(4) governs, in general or in regard to specific
15714	15714	7702
15715	15715	7703
15716	15716	7704
15717	15717	7705
15718	15718	7706
15719	15719	7707
15720	15720	7708
15721	15721	7709
15722	15722	7710
15723	15723	7711
15724	15724	7712
15725	15725	7713
15726	15726	7714
15727	15727	7715
15728	15728	7716
15729	15729	7717
15730	15730	7718
15731	15731	7719
15732	15732	7720
15733	15733	7721
15734	15734	7722
15735	15735	7723
15736	15736	7724
15737	15737	7725
15738	15738	7726
15739	15739	7727
15740	15740	7728
15741	15741	7729 SB245 INTRODUCEDSB245 INTRODUCED
15742	15742	Page 277
15743	15743	matters, the exercise or division of voting power by or
15744	15744	between the stockholders and directors or by or among any of
15745	15745	them, including use of weighted voting rights or director
15746	15746	proxies;
15747	15747	(5) establishes the terms and conditions of any
15748	15748	agreement for the transfer or use of property or the provision
15749	15749	of services between the corporation and any stockholder,
15750	15750	director, officer , or employee of the corporation or among any
15751	15751	of them;
15752	15752	(6) transfers to one or more stockholders or other
15753	15753	persons all or part of the authority to exercise the corporate
15754	15754	powers or to manage the business and affairs of the
15755	15755	corporation, including the resolution of any issue about which
15756	15756	there exists a deadlock among directors or stockholders;
15757	15757	(7) requires dissolution of the corporation at the
15758	15758	request of one or more of the stockholders or upon the
15759	15759	occurrence of a specified event or contingency; or
15760	15760	(8) otherwise governs the exercise of the corporate
15761	15761	powers or the management of the business and affairs of the
15762	15762	corporation or the relationship among the stockholders, the
15763	15763	directors and the corporation, or among any of them, and is
15764	15764	not contrary to public policy.
15765	15765	(b) An agreement authorized by this section shall be:
15766	15766	(1) as set forth (i) in the certificate of
15767	15767	incorporation or bylaws and approved by all persons who are
15768	15768	stockholders at the time of the agreement, or (ii) in a
15769	15769	written agreement that is signed by all persons who are
15770	15770	stockholders at the time of the agreement and is made known to
15771	15771	7730
15772	15772	7731
15773	15773	7732
15774	15774	7733
15775	15775	7734
15776	15776	7735
15777	15777	7736
15778	15778	7737
15779	15779	7738
15780	15780	7739
15781	15781	7740
15782	15782	7741
15783	15783	7742
15784	15784	7743
15785	15785	7744
15786	15786	7745
15787	15787	7746
15788	15788	7747
15789	15789	7748
15790	15790	7749
15791	15791	7750
15792	15792	7751
15793	15793	7752
15794	15794	7753
15795	15795	7754
15796	15796	7755
15797	15797	7756
15798	15798	7757 SB245 INTRODUCEDSB245 INTRODUCED
15799	15799	Page 278
15800	15800	the corporation; and
15801	15801	(2) subject to amendment only by all persons who are
15802	15802	stockholders at the time of the amendment, unless the
15803	15803	agreement provides otherwise.
15804	15804	(c) The existence of an agreement authorized by this
15805	15805	section shall be noted conspicuously on the front or back of
15806	15806	each certificate for outstanding stock or in the information
15807	15807	required by Section 10A-1-3.45. If at the time of the
15808	15808	agreement the corporation has stock outstanding represented by
15809	15809	certificates, the corporation shall recall the outstanding
15810	15810	certificates and issue substitute certificates that comply
15811	15811	with this subsection. The failure to note the existence of the
15812	15812	agreement as required by this subsection shall not affect the
15813	15813	validity of the agreement or any action taken pursuant to it.
15814	15814	Any purchaser of stock who, at the time of purchase, did not
15815	15815	have knowledge of the existence of the agreement shall be
15816	15816	entitled to rescission of the purchase. A purchaser shall be
15817	15817	deemed to have knowledge of the existence of the agreement if
15818	15818	its existence is noted on the certificate or if the stock is
15819	15819	not represented by a certificate, the information required by
15820	15820	Section 10A-1-3.45 is delivered to the purchaser at or before
15821	15821	the time of purchase of the stock. An action to enforce the
15822	15822	right of rescission authorized by this subsection shall be
15823	15823	commenced within the earlier of 90 days after discovery of the
15824	15824	existence of the agreement or two years after the time of
15825	15825	purchase of the stock.
15826	15826	(d) If the agreement ceases to be effective for any
15827	15827	reason, the board of directors may, if the agreement is
15828	15828	7758
15829	15829	7759
15830	15830	7760
15831	15831	7761
15832	15832	7762
15833	15833	7763
15834	15834	7764
15835	15835	7765
15836	15836	7766
15837	15837	7767
15838	15838	7768
15839	15839	7769
15840	15840	7770
15841	15841	7771
15842	15842	7772
15843	15843	7773
15844	15844	7774
15845	15845	7775
15846	15846	7776
15847	15847	7777
15848	15848	7778
15849	15849	7779
15850	15850	7780
15851	15851	7781
15852	15852	7782
15853	15853	7783
15854	15854	7784
15855	15855	7785 SB245 INTRODUCEDSB245 INTRODUCED
15856	15856	Page 279
15857	15857	contained or referred to in the corporation's certificate of
15858	15858	incorporation or bylaws, adopt an amendment to the certificate
15859	15859	of incorporation or bylaws, without stockholder action, to
15860	15860	delete the agreement and any references to it.
15861	15861	(e) An agreement authorized by this section that limits
15862	15862	the discretion or powers of the board of directors shall
15863	15863	relieve the directors of, and impose upon the person or
15864	15864	persons in whom the discretion or powers are vested, liability
15865	15865	for acts or omissions imposed by law on directors to the
15866	15866	extent that the discretion or powers of the directors are
15867	15867	limited by the agreement. An agreement authorized by this
15868	15868	section that eliminates the board of directors shall impose on
15869	15869	the person or persons in whom the discretion or powers of the
15870	15870	directors are vested the liability for acts or omissions as
15871	15871	are imposed by law on directors.
15872	15872	(f) The existence or performance of an agreement
15873	15873	authorized by this section shall not be a ground for imposing
15874	15874	personal liability on any stockholder for the acts or debts of
15875	15875	the corporation even if the agreement or its performance
15876	15876	treats the corporation as if it were a partnership or results
15877	15877	in failure to observe the corporate formalities otherwise
15878	15878	applicable to the matters governed by the agreement.
15879	15879	(g) Incorporators or subscribers for stock may act as
15880	15880	stockholders with respect to an agreement authorized by this
15881	15881	section if no stock has been issued when the agreement is
15882	15882	made.
15883	15883	(h) Limits, if any, on the duration of an agreement
15884	15884	authorized by this section must be set forth in the
15885	15885	7786
15886	15886	7787
15887	15887	7788
15888	15888	7789
15889	15889	7790
15890	15890	7791
15891	15891	7792
15892	15892	7793
15893	15893	7794
15894	15894	7795
15895	15895	7796
15896	15896	7797
15897	15897	7798
15898	15898	7799
15899	15899	7800
15900	15900	7801
15901	15901	7802
15902	15902	7803
15903	15903	7804
15904	15904	7805
15905	15905	7806
15906	15906	7807
15907	15907	7808
15908	15908	7809
15909	15909	7810
15910	15910	7811
15911	15911	7812
15912	15912	7813 SB245 INTRODUCEDSB245 INTRODUCED
15913	15913	Page 280
15914	15914	agreement."
15915	15915	"§10A-2A-8.10
15916	15916	(a) Unless the certificate of incorporation provides
15917	15917	otherwise Except as otherwise provided in Section
15918	15918	10A-2A-8.10(b) or the certificate of incorporation , if a
15919	15919	vacancy occurs on a the board of directors, including a
15920	15920	vacancy resulting from an increase in the number of directors:
15921	15921	(1) the stockholders may fill the vacancy;
15922	15922	(2) the board of directors may fill the vacancy; or
15923	15923	(3) if the directors remaining in office are less than
15924	15924	a quorum, they may fill the vacancy by the affirmative vote of
15925	15925	a majority of all the directors remaining in office.
15926	15926	(b) If Unless the certificate of incorporation provides
15927	15927	otherwise, if the vacant office was held by a director elected
15928	15928	by a voting group of stockholders, only the holders of stock
15929	15929	of that voting group are entitled to vote to fill the vacancy
15930	15930	if it is filled by the stockholders, and only the remaining
15931	15931	directors elected by that voting group, even if less than a
15932	15932	quorum, are entitled to fill the vacancy if it is filled by
15933	15933	the directors.
15934	15934	(c) A vacancy that will occur at a specific later date
15935	15935	(by reason of a resignation effective at a later date under
15936	15936	Section 10A-2A-8.07(b) or otherwise) may be filled before the
15937	15937	vacancy occurs but the new director may not take office until
15938	15938	the vacancy occurs."
15939	15939	"§10A-2A-8.21
15940	15940	(a) Except to the extent that the certificate of
15941	15941	incorporation or bylaws require that action by the board of
15942	15942	7814
15943	15943	7815
15944	15944	7816
15945	15945	7817
15946	15946	7818
15947	15947	7819
15948	15948	7820
15949	15949	7821
15950	15950	7822
15951	15951	7823
15952	15952	7824
15953	15953	7825
15954	15954	7826
15955	15955	7827
15956	15956	7828
15957	15957	7829
15958	15958	7830
15959	15959	7831
15960	15960	7832
15961	15961	7833
15962	15962	7834
15963	15963	7835
15964	15964	7836
15965	15965	7837
15966	15966	7838
15967	15967	7839
15968	15968	7840
15969	15969	7841 SB245 INTRODUCEDSB245 INTRODUCED
15970	15970	Page 281
15971	15971	directors be taken at a meeting, action required or permitted
15972	15972	by this chapter to be taken by the board of directors may be
15973	15973	taken without a meeting if each director signs a consent
15974	15974	describing the action to be taken and delivers it to the
15975	15975	corporation.
15976	15976	(b) Action taken under this section is the act of the
15977	15977	board of directors when one or more consents signed by all the
15978	15978	directors are delivered to the corporation. The consent may
15979	15979	specify a later time as the time at which the action taken is
15980	15980	to be effective. Any director executing a consent may provide,
15981	15981	whether through instruction to an agent or otherwise, that
15982	15982	such consent will be effective at a future time, including a
15983	15983	time determined upon the happening of an event, occurring not
15984	15984	later than 60 days after such instruction is given or such
15985	15985	provision is made, if evidence of the instruction or provision
15986	15986	is provided to the corporation. A director's consent may be
15987	15987	withdrawn by a revocation signed by the director and delivered
15988	15988	to the corporation before delivery to the corporation of
15989	15989	unrevoked written consents signed by all the directors.
15990	15990	(c) A consent signed under this section has the effect
15991	15991	of action taken at a meeting of the board of directors and may
15992	15992	be described as such in any document."
15993	15993	"§10A-2A-8.22
15994	15994	(a) Unless the certificate of incorporation or bylaws
15995	15995	provide otherwise, regular meetings of the board of directors
15996	15996	may be held without notice of the place, if any, date, time,
15997	15997	place, or purpose of the meeting.
15998	15998	(b) Unless the certificate of incorporation or bylaws
15999	15999	7842
16000	16000	7843
16001	16001	7844
16002	16002	7845
16003	16003	7846
16004	16004	7847
16005	16005	7848
16006	16006	7849
16007	16007	7850
16008	16008	7851
16009	16009	7852
16010	16010	7853
16011	16011	7854
16012	16012	7855
16013	16013	7856
16014	16014	7857
16015	16015	7858
16016	16016	7859
16017	16017	7860
16018	16018	7861
16019	16019	7862
16020	16020	7863
16021	16021	7864
16022	16022	7865
16023	16023	7866
16024	16024	7867
16025	16025	7868
16026	16026	7869 SB245 INTRODUCEDSB245 INTRODUCED
16027	16027	Page 282
16028	16028	provide for a longer or shorter period, special meetings of
16029	16029	the board of directors shall be preceded by at least two days'
16030	16030	notice of the place, if any, date, and time, and place of the
16031	16031	meeting. The notice need not describe the purpose of the
16032	16032	special meeting unless required by the certificate of
16033	16033	incorporation or bylaws."
16034	16034	"§10A-2A-8.24
16035	16035	(a) Unless the certificate of incorporation or bylaws
16036	16036	provide for a greater or lesser number or unless otherwise
16037	16037	expressly provided in this chapter, a quorum of a board of
16038	16038	directors consists of a majority of the number of directors
16039	16039	specified in or fixed in accordance with the certificate of
16040	16040	incorporation or bylaws.
16041	16041	(b) The quorum of the board of directors specified in
16042	16042	or fixed in accordance with the certificate of incorporation
16043	16043	or bylaws may not consist of less than one-third of the
16044	16044	specified or fixed number of directors.
16045	16045	(c) If a quorum is present when a vote is taken, the
16046	16046	affirmative vote of a majority of directors present is the act
16047	16047	of the board of directors unless the certificate of
16048	16048	incorporation or bylaws require the vote of a greater number
16049	16049	of directors or unless otherwise expressly provided in this
16050	16050	chapter.
16051	16051	(d) A director who is present at a meeting of the board
16052	16052	of directors or a committee when corporate action is taken is
16053	16053	deemed to have assented to the action taken unless: (i) the
16054	16054	director objects at the beginning of the meeting (or promptly
16055	16055	upon arrival) to holding it or transacting business at the
16056	16056	7870
16057	16057	7871
16058	16058	7872
16059	16059	7873
16060	16060	7874
16061	16061	7875
16062	16062	7876
16063	16063	7877
16064	16064	7878
16065	16065	7879
16066	16066	7880
16067	16067	7881
16068	16068	7882
16069	16069	7883
16070	16070	7884
16071	16071	7885
16072	16072	7886
16073	16073	7887
16074	16074	7888
16075	16075	7889
16076	16076	7890
16077	16077	7891
16078	16078	7892
16079	16079	7893
16080	16080	7894
16081	16081	7895
16082	16082	7896
16083	16083	7897 SB245 INTRODUCEDSB245 INTRODUCED
16084	16084	Page 283
16085	16085	meeting; (ii) the dissent or abstention from the action taken
16086	16086	is entered in the minutes of the meeting; or (iii) the
16087	16087	director delivers written notice of the director's dissent or
16088	16088	abstention to the presiding officer of the meeting before its
16089	16089	adjournment or to the corporation immediately after
16090	16090	adjournment of the meeting. The right of dissent or abstention
16091	16091	is not available to a director who votes in favor of the
16092	16092	action taken.
16093	16093	(e) A director, in that person's capacity as a
16094	16094	director, may not appoint an agent or proxy to vote, consent,
16095	16095	approve, attend, act, or otherwise carry out the duties of
16096	16096	that director for any purpose. "
16097	16097	"§10A-2A-8.59
16098	16098	Division A of Article 6 of Chapter 1 shall not apply to
16099	16099	this chapter. Instead, a A corporation may provide
16100	16100	indemnification or advance expenses to a director or an
16101	16101	officer only as permitted by this Division E of this Article
16102	16102	8."
16103	16103	"§10A-2A-10.06
16104	16104	Division B of Article 3 of Chapter 1 shall not apply to
16105	16105	this chapter. Instead:
16106	16106	(a) After an amendment to the certificate of
16107	16107	incorporation has been adopted and approved in the manner
16108	16108	required by this chapter and by the certificate of
16109	16109	incorporation, the corporation shall deliver to the Secretary
16110	16110	of State for filing a certificate of amendment, which must set
16111	16111	forth:
16112	16112	(1) the name of the corporation;
16113	16113	7898
16114	16114	7899
16115	16115	7900
16116	16116	7901
16117	16117	7902
16118	16118	7903
16119	16119	7904
16120	16120	7905
16121	16121	7906
16122	16122	7907
16123	16123	7908
16124	16124	7909
16125	16125	7910
16126	16126	7911
16127	16127	7912
16128	16128	7913
16129	16129	7914
16130	16130	7915
16131	16131	7916
16132	16132	7917
16133	16133	7918
16134	16134	7919
16135	16135	7920
16136	16136	7921
16137	16137	7922
16138	16138	7923
16139	16139	7924
16140	16140	7925 SB245 INTRODUCEDSB245 INTRODUCED
16141	16141	Page 284
16142	16142	(2) the text of each amendment adopted, or the
16143	16143	information required by Section 10A-2A-1.20(c)(5);
16144	16144	(3) if an amendment provides for an exchange,
16145	16145	reclassification, or cancellation of issued stock, provisions
16146	16146	for implementing the amendment if not contained in the
16147	16147	amendment itself, (which may be made dependent upon facts
16148	16148	objectively ascertainable outside the certificate of amendment
16149	16149	in accordance with Section 10A-2A-1.20(c)(5));
16150	16150	(4) the date of each amendment's adoption;
16151	16151	(5) if an amendment:
16152	16152	(i) was adopted by the incorporators or board of
16153	16153	directors without stockholder approval, a statement that the
16154	16154	amendment was duly adopted by the incorporators or by the
16155	16155	board of directors, as the case may be, and that stockholder
16156	16156	approval was not required;
16157	16157	(ii) required approval by the stockholders, a statement
16158	16158	that the amendment was duly approved by the stockholders in
16159	16159	the manner required by this chapter and by the certificate of
16160	16160	incorporation; or
16161	16161	(iii) is being filed pursuant to Section
16162	16162	10A-2A-1.20(c)(5), a statement to that effect; and
16163	16163	(6) the unique identifying number or other designation
16164	16164	as assigned by the Secretary of State.
16165	16165	(b) A certificate of amendment shall take effect at the
16166	16166	effective date determined in accordance with Article 4 of
16167	16167	Chapter 1."
16168	16168	"§10A-2A-10.07
16169	16169	Division B of Article 3 of Chapter 1 shall not apply to
16170	16170	7926
16171	16171	7927
16172	16172	7928
16173	16173	7929
16174	16174	7930
16175	16175	7931
16176	16176	7932
16177	16177	7933
16178	16178	7934
16179	16179	7935
16180	16180	7936
16181	16181	7937
16182	16182	7938
16183	16183	7939
16184	16184	7940
16185	16185	7941
16186	16186	7942
16187	16187	7943
16188	16188	7944
16189	16189	7945
16190	16190	7946
16191	16191	7947
16192	16192	7948
16193	16193	7949
16194	16194	7950
16195	16195	7951
16196	16196	7952
16197	16197	7953 SB245 INTRODUCEDSB245 INTRODUCED
16198	16198	Page 285
16199	16199	this chapter. Instead:
16200	16200	(a) A corporation's board of directors may restate its
16201	16201	certificate of incorporation at any time, without stockholder
16202	16202	approval, to consolidate all amendments into a single
16203	16203	document.
16204	16204	(b) If the restated certificate of incorporation
16205	16205	includes one or more new amendments that require stockholder
16206	16206	approval, the amendments shall be adopted and approved as
16207	16207	provided in Section 10A-2A-10.03.
16208	16208	(c) A corporation that restates its certificate of
16209	16209	incorporation shall deliver to the Secretary of State for
16210	16210	filing a certificate of restatement setting forth:
16211	16211	(1) the name of the corporation;
16212	16212	(2) the text of the restated certificate of
16213	16213	incorporation;
16214	16214	(3) a statement that the restated certificate of
16215	16215	incorporation consolidates all amendments into a single
16216	16216	document;
16217	16217	(4) if a new amendment is included in the restated
16218	16218	certificate of incorporation, the statements required under
16219	16219	Section 10A-2A-10.06 with respect to the new amendment; and
16220	16220	(5) the unique identifying number or other designation
16221	16221	as assigned by the Secretary of State.
16222	16222	(d) The duly adopted restated certificate of
16223	16223	incorporation supersedes the original certificate of
16224	16224	incorporation and all amendments to the certificate of
16225	16225	incorporation.
16226	16226	(e) The Secretary of State may certify the restated
16227	16227	7954
16228	16228	7955
16229	16229	7956
16230	16230	7957
16231	16231	7958
16232	16232	7959
16233	16233	7960
16234	16234	7961
16235	16235	7962
16236	16236	7963
16237	16237	7964
16238	16238	7965
16239	16239	7966
16240	16240	7967
16241	16241	7968
16242	16242	7969
16243	16243	7970
16244	16244	7971
16245	16245	7972
16246	16246	7973
16247	16247	7974
16248	16248	7975
16249	16249	7976
16250	16250	7977
16251	16251	7978
16252	16252	7979
16253	16253	7980
16254	16254	7981 SB245 INTRODUCEDSB245 INTRODUCED
16255	16255	Page 286
16256	16256	certificate of incorporation as the certificate of
16257	16257	incorporation currently in effect, without including the
16258	16258	statements required by subsection (c)(4). "
16259	16259	"§10A-2A-10.08
16260	16260	Division B of Article 3 of Chapter 1 shall not apply to
16261	16261	this chapter. Instead:
16262	16262	(a) A corporation's certificate of incorporation may be
16263	16263	amended without action by the board of directors or
16264	16264	stockholders to carry out a plan of reorganization ordered or
16265	16265	decreed by a court of competent jurisdiction under the
16266	16266	authority of a law of the United States if the certificate of
16267	16267	incorporation after the amendment only contains provisions
16268	16268	required or permitted by Section 10A-2A-2.02.
16269	16269	(b) The individual or individuals designated by the
16270	16270	court shall deliver to the Secretary of State for filing a
16271	16271	certificate of amendment setting forth:
16272	16272	(1) the name of the corporation;
16273	16273	(2) the text of each amendment approved by the court;
16274	16274	(3) the date of the court's order or decree approving
16275	16275	the certificate of amendment;
16276	16276	(4) the title of the reorganization proceeding in which
16277	16277	the order or decree was entered;
16278	16278	(5) a statement that the court had jurisdiction of the
16279	16279	proceeding under federal statute; and
16280	16280	(6) the unique identifying number or other designation
16281	16281	as assigned by the Secretary of State.
16282	16282	(c) Stockholders of a corporation undergoing
16283	16283	reorganization do not have dissenters' rights except as and to
16284	16284	7982
16285	16285	7983
16286	16286	7984
16287	16287	7985
16288	16288	7986
16289	16289	7987
16290	16290	7988
16291	16291	7989
16292	16292	7990
16293	16293	7991
16294	16294	7992
16295	16295	7993
16296	16296	7994
16297	16297	7995
16298	16298	7996
16299	16299	7997
16300	16300	7998
16301	16301	7999
16302	16302	8000
16303	16303	8001
16304	16304	8002
16305	16305	8003
16306	16306	8004
16307	16307	8005
16308	16308	8006
16309	16309	8007
16310	16310	8008
16311	16311	8009 SB245 INTRODUCEDSB245 INTRODUCED
16312	16312	Page 287
16313	16313	the extent provided in the reorganization plan.
16314	16314	(d) This section does not apply after entry of a final
16315	16315	decree in the reorganization proceeding even though the court
16316	16316	retains jurisdiction of the proceeding for limited purposes
16317	16317	unrelated to consummation of the reorganization plan."
16318	16318	"§10A-2A-11.02
16319	16319	(a) A corporation may merge with one or more other
16320	16320	constituent organizations pursuant to this article, and a plan
16321	16321	of merger, if:
16322	16322	(1) the governing statute of each of the other
16323	16323	organizations authorizes the merger;
16324	16324	(2) the merger is not prohibited by the law of a
16325	16325	jurisdiction that enacted any of those governing statutes; and
16326	16326	(3) each of the other organizations complies with its
16327	16327	governing statute in effecting the merger.
16328	16328	(b) A plan of merger must be in writing and must
16329	16329	include:
16330	16330	(1) the name, type of organization, and mailing address
16331	16331	of the principal office of each constituent organization, the
16332	16332	jurisdiction of the governing statute of each constituent
16333	16333	organization, and the respective unique identifying number or
16334	16334	other designation as assigned by the Secretary of State, if
16335	16335	any, of each constituent organization;
16336	16336	(2) the name, type of organization, and mailing address
16337	16337	of the principal office of the surviving organization, the
16338	16338	unique identifying number or other designation as assigned by
16339	16339	the Secretary of State, if any, of the surviving organization,
16340	16340	the jurisdiction of the governing statute of the surviving
16341	16341	8010
16342	16342	8011
16343	16343	8012
16344	16344	8013
16345	16345	8014
16346	16346	8015
16347	16347	8016
16348	16348	8017
16349	16349	8018
16350	16350	8019
16351	16351	8020
16352	16352	8021
16353	16353	8022
16354	16354	8023
16355	16355	8024
16356	16356	8025
16357	16357	8026
16358	16358	8027
16359	16359	8028
16360	16360	8029
16361	16361	8030
16362	16362	8031
16363	16363	8032
16364	16364	8033
16365	16365	8034
16366	16366	8035
16367	16367	8036
16368	16368	8037 SB245 INTRODUCEDSB245 INTRODUCED
16369	16369	Page 288
16370	16370	organization, and, if the surviving organization is created
16371	16371	pursuant to the merger, a statement to that effect;
16372	16372	(3) the terms and conditions of the merger, including
16373	16373	the manner and basis for converting the stock or eligible
16374	16374	interests in each constituent organization into any
16375	16375	combination of money, stock, eligible interests in the
16376	16376	surviving organization, and other consideration as allowed by
16377	16377	subsection (c);
16378	16378	(4) if the surviving organization is to be created
16379	16379	pursuant to the merger, the surviving organization's
16380	16380	organizational documents; and
16381	16381	(5) if the surviving organization is not to be created
16382	16382	pursuant to the merger, any amendments to be made by the
16383	16383	merger to the surviving organization's organizational
16384	16384	documents.
16385	16385	(c) In connection with a merger, rights, securities,
16386	16386	stock, or eligible interests , if any, in a constituent
16387	16387	organization may be exchanged for or converted into cash,
16388	16388	property, rights, securities, stock, or eligible interests , if
16389	16389	any, in the surviving organization, or, in addition to or in
16390	16390	lieu thereof, may be exchanged for or converted into cash,
16391	16391	property, rights, securities, stock, or eligible interests , if
16392	16392	any, in another organization , or may be cancelled.
16393	16393	(d) In addition to the requirements of subsection (b),
16394	16394	a plan of merger may contain any other provision not
16395	16395	prohibited by law.
16396	16396	(e) Terms of a plan of merger may be made dependent on
16397	16397	facts objectively ascertainable outside the plan in accordance
16398	16398	8038
16399	16399	8039
16400	16400	8040
16401	16401	8041
16402	16402	8042
16403	16403	8043
16404	16404	8044
16405	16405	8045
16406	16406	8046
16407	16407	8047
16408	16408	8048
16409	16409	8049
16410	16410	8050
16411	16411	8051
16412	16412	8052
16413	16413	8053
16414	16414	8054
16415	16415	8055
16416	16416	8056
16417	16417	8057
16418	16418	8058
16419	16419	8059
16420	16420	8060
16421	16421	8061
16422	16422	8062
16423	16423	8063
16424	16424	8064
16425	16425	8065 SB245 INTRODUCEDSB245 INTRODUCED
16426	16426	Page 289
16427	16427	with Section 10A-2A-1.20(c).
16428	16428	(f) A plan of merger may be amended only with the
16429	16429	consent of each constituent organization, except as provided
16430	16430	in the plan. A domestic constituent organization may approve
16431	16431	an amendment to a plan:
16432	16432	(1) in the same manner as the plan was approved, if the
16433	16433	plan does not provide for the manner in which it may be
16434	16434	amended; or
16435	16435	(2) in the manner provided in the plan, except that if
16436	16436	the plan has been approved by the stockholders, members, or
16437	16437	interest holders that were entitled to vote on, consent to, or
16438	16438	approve of, the plan, then those stockholders, members, or
16439	16439	interest holders are entitled to vote on, consent to, or
16440	16440	approve of any amendment of the plan that will change:
16441	16441	(i) the amount or kind of stock or other securities,
16442	16442	eligible interests, obligations, rights to acquire stock,
16443	16443	other securities or eligible interests, cash, or other
16444	16444	property to be received under the plan by the stockholders,
16445	16445	members, or interest holders of a constituent organization;
16446	16446	(ii) the certificate of incorporation of any
16447	16447	corporation, foreign corporation, nonprofit corporation,
16448	16448	foreign nonprofit corporation or the organizational documents
16449	16449	of any unincorporated entity or foreign unincorporated entity,
16450	16450	that will be the surviving organization, except for changes
16451	16451	permitted by Section 10A-2A-10.05 or by comparable provisions
16452	16452	of the governing statute of the foreign corporation, nonprofit
16453	16453	corporation, foreign nonprofit corporation, unincorporated
16454	16454	entity, or foreign unincorporated entity; or
16455	16455	8066
16456	16456	8067
16457	16457	8068
16458	16458	8069
16459	16459	8070
16460	16460	8071
16461	16461	8072
16462	16462	8073
16463	16463	8074
16464	16464	8075
16465	16465	8076
16466	16466	8077
16467	16467	8078
16468	16468	8079
16469	16469	8080
16470	16470	8081
16471	16471	8082
16472	16472	8083
16473	16473	8084
16474	16474	8085
16475	16475	8086
16476	16476	8087
16477	16477	8088
16478	16478	8089
16479	16479	8090
16480	16480	8091
16481	16481	8092
16482	16482	8093 SB245 INTRODUCEDSB245 INTRODUCED
16483	16483	Page 290
16484	16484	(iii) any of the other terms or conditions of the plan
16485	16485	if the change would adversely affect the stockholders,
16486	16486	members, or interest holders in any material respect."
16487	16487	"§10A-2A-11.06
16488	16488	(a) After a plan of merger has been adopted and
16489	16489	approved as required by this article, then a statement of
16490	16490	merger shall be signed by each party to the merger except as
16491	16491	provided in Section 10A-2A-11.05(a). The statement of merger
16492	16492	must set forth:
16493	16493	(1) the name, type of organization, and mailing address
16494	16494	of the principal office of each constituent organization, the
16495	16495	jurisdiction of the governing statute of each constituent
16496	16496	organization, and the respective unique identifying number or
16497	16497	other designation as assigned by the Secretary of State, if
16498	16498	any, of each constituent organization;
16499	16499	(2) the name, type of organization, and mailing address
16500	16500	of the principal office of the surviving organization, the
16501	16501	unique identifying number or other designation as assigned by
16502	16502	the Secretary of State, if any, of the surviving organization,
16503	16503	the jurisdiction of the governing statute of the surviving
16504	16504	organization, and, if the surviving organization is created
16505	16505	pursuant to the merger, a statement to that effect;
16506	16506	(3) the date of the filing of the certificate of
16507	16507	formation, if any, and all prior amendments and the filing
16508	16508	office or offices, if any, and where the certificate of
16509	16509	formation is filed of each constituent organization which was
16510	16510	formed under the laws of this state;
16511	16511	(4)(3) the date the merger is effective under the
16512	16512	8094
16513	16513	8095
16514	16514	8096
16515	16515	8097
16516	16516	8098
16517	16517	8099
16518	16518	8100
16519	16519	8101
16520	16520	8102
16521	16521	8103
16522	16522	8104
16523	16523	8105
16524	16524	8106
16525	16525	8107
16526	16526	8108
16527	16527	8109
16528	16528	8110
16529	16529	8111
16530	16530	8112
16531	16531	8113
16532	16532	8114
16533	16533	8115
16534	16534	8116
16535	16535	8117
16536	16536	8118
16537	16537	8119
16538	16538	8120
16539	16539	8121 SB245 INTRODUCEDSB245 INTRODUCED
16540	16540	Page 291
16541	16541	governing statute of the surviving organization;
16542	16542	(5)(4) if the surviving organization is to be created
16543	16543	pursuant to the merger:
16544	16544	(A) if it will be a corporation, the corporation's
16545	16545	certificate of incorporation; or
16546	16546	(B) if it will be an organization other than a
16547	16547	corporation, any organizational document that creates the
16548	16548	organization that is required to be in a public writing or in
16549	16549	the case of a limited liability partnership, its statement of
16550	16550	limited liability partnership;
16551	16551	(6)(5) if the surviving organization exists before the
16552	16552	merger, any amendments provided for in the plan of merger for
16553	16553	the organizational document that created the organization that
16554	16554	are in a public writing;
16555	16555	(7)(6) a statement as to each constituent organization
16556	16556	that the merger was approved as required by the organization's
16557	16557	governing statute;
16558	16558	(8)(7) if the surviving organization is a foreign
16559	16559	organization not authorized to conduct activities and affairs
16560	16560	in this state, the street and mailing address of an office for
16561	16561	the purposes of Section 10A-2A-11.07(c);
16562	16562	(9)(8) any additional information required by the
16563	16563	governing statute of any constituent organization;
16564	16564	(10)(9) if the plan of merger required approval by the
16565	16565	stockholders of a corporation that is a constituent
16566	16566	organization, a statement that the plan was duly approved by
16567	16567	the stockholders and, if voting by any separate voting group
16568	16568	was required, by each separate voting group, in the manner
16569	16569	8122
16570	16570	8123
16571	16571	8124
16572	16572	8125
16573	16573	8126
16574	16574	8127
16575	16575	8128
16576	16576	8129
16577	16577	8130
16578	16578	8131
16579	16579	8132
16580	16580	8133
16581	16581	8134
16582	16582	8135
16583	16583	8136
16584	16584	8137
16585	16585	8138
16586	16586	8139
16587	16587	8140
16588	16588	8141
16589	16589	8142
16590	16590	8143
16591	16591	8144
16592	16592	8145
16593	16593	8146
16594	16594	8147
16595	16595	8148
16596	16596	8149 SB245 INTRODUCEDSB245 INTRODUCED
16597	16597	Page 292
16598	16598	required by this chapter and the certificate of incorporation;
16599	16599	(11)(10) if the plan of merger did not require approval
16600	16600	by the stockholders of a corporation that is a constituent
16601	16601	organization, a statement to that effect; and
16602	16602	(12)(11) a statement that the plan of merger will be
16603	16603	furnished by the surviving organization, on request and
16604	16604	without cost, to any owner of any constituent organization
16605	16605	which is a party to the merger.
16606	16606	(b) After a plan of stock exchange in which the
16607	16607	acquired entity is a corporation has been adopted and approved
16608	16608	as required by this chapter, a statement of stock exchange
16609	16609	shall be signed by the acquired entity and the acquiring
16610	16610	entity. The statement of stock exchange shall set forth:
16611	16611	(1) the name and mailing address of the principal
16612	16612	office of the acquired entity, and the jurisdiction of its
16613	16613	governing statute, and its unique identifying number or other
16614	16614	designation as assigned by the Secretary of State, if any;
16615	16615	(2) the name, jurisdiction of formation, and type of
16616	16616	entity of the corporation or foreign corporation that is the
16617	16617	acquiring entity;
16618	16618	(3) a statement that the plan of stock exchange was
16619	16619	duly approved by the acquired entity by:
16620	16620	(i) the required vote or consent of each class or
16621	16621	series of stock included in the exchange; and
16622	16622	(ii) the required vote or consent of each other class
16623	16623	or series of stock entitled to vote on approval of the
16624	16624	exchange by the certificate of incorporation of the acquired
16625	16625	entity; and
16626	16626	8150
16627	16627	8151
16628	16628	8152
16629	16629	8153
16630	16630	8154
16631	16631	8155
16632	16632	8156
16633	16633	8157
16634	16634	8158
16635	16635	8159
16636	16636	8160
16637	16637	8161
16638	16638	8162
16639	16639	8163
16640	16640	8164
16641	16641	8165
16642	16642	8166
16643	16643	8167
16644	16644	8168
16645	16645	8169
16646	16646	8170
16647	16647	8171
16648	16648	8172
16649	16649	8173
16650	16650	8174
16651	16651	8175
16652	16652	8176
16653	16653	8177 SB245 INTRODUCEDSB245 INTRODUCED
16654	16654	Page 293
16655	16655	(4) if the stock exchange did not require the approval
16656	16656	by the stockholders of a corporation that is a party to the
16657	16657	stock exchange, a statement to that effect.
16658	16658	(c) In addition to the requirements of subsection (a)
16659	16659	or subsection (b), a statement of merger or stock exchange may
16660	16660	contain any other provision not prohibited by law.
16661	16661	(d) The statement of merger or stock exchange shall be
16662	16662	delivered to the Secretary of State for filing and, subject to
16663	16663	subsection (e), the merger or stock exchange shall take effect
16664	16664	at the effective date determined in accordance with Article 4
16665	16665	of Chapter 1.
16666	16666	(e) With respect to a merger in which one or more
16667	16667	foreign organizations is a constituent organization or a
16668	16668	foreign organization created by the merger is the surviving
16669	16669	organization, the merger itself shall become effective at the
16670	16670	later of:
16671	16671	(1) when all documents required to be filed in foreign
16672	16672	jurisdictions to effect the merger have become effective, or
16673	16673	(2) when the statement of merger takes effect.
16674	16674	(f) A statement of merger filed under this section may
16675	16675	be combined with any filing required under the governing
16676	16676	statute governing any domestic organization involved in the
16677	16677	transaction if the combined filing satisfies the requirements
16678	16678	of this section, the other governing statute, and Article 4 of
16679	16679	Chapter 1.
16680	16680	(g) After a merger becomes effective, if the surviving
16681	16681	organization is a corporation, then, except for certified
16682	16682	copies of the statement of merger permitted to be delivered to
16683	16683	8178
16684	16684	8179
16685	16685	8180
16686	16686	8181
16687	16687	8182
16688	16688	8183
16689	16689	8184
16690	16690	8185
16691	16691	8186
16692	16692	8187
16693	16693	8188
16694	16694	8189
16695	16695	8190
16696	16696	8191
16697	16697	8192
16698	16698	8193
16699	16699	8194
16700	16700	8195
16701	16701	8196
16702	16702	8197
16703	16703	8198
16704	16704	8199
16705	16705	8200
16706	16706	8201
16707	16707	8202
16708	16708	8203
16709	16709	8204
16710	16710	8205 SB245 INTRODUCEDSB245 INTRODUCED
16711	16711	Page 294
16712	16712	the judge of probate for filing pursuant to subsection (h),
16713	16713	all filing instruments required to be filed under this title
16714	16714	regarding that surviving organization shall be delivered for
16715	16715	filing to the Secretary of State.
16716	16716	(h)(g) A certified copy of the statement of merger
16717	16717	required to be filed under this section may be filed in the
16718	16718	real estate records in the office of the judge of probate in
16719	16719	any county in which any constituent organization owned real
16720	16720	property, without payment and without collection by the judge
16721	16721	of probate of any deed or other transfer tax or fee. The judge
16722	16722	of probate, however, shall be entitled to collect the filing
16723	16723	fee of five dollars ($5). Any filing shall evidence chain of
16724	16724	title, but lack of filing shall not affect the surviving
16725	16725	organization's title to real property."
16726	16726	"§10A-2A-12.02
16727	16727	(a) A sale, lease, exchange, or other disposition of
16728	16728	assets, other than a disposition described in Section
16729	16729	10A-2A-12.01, requires approval of the corporation's
16730	16730	stockholders if the disposition would leave the corporation
16731	16731	without a significant continuing business activity. A
16732	16732	corporation will conclusively be deemed to have retained a
16733	16733	significant continuing business activity if it retains a
16734	16734	business activity that represented, for the corporation and
16735	16735	its subsidiaries on a consolidated basis, at least (i) 25
16736	16736	percent of total assets at the end of the most recently
16737	16737	completed fiscal year, and (ii) either 25 percent of either
16738	16738	income from continuing operations before taxes or 25 percent
16739	16739	of revenues from continuing operations, in each case for the
16740	16740	8206
16741	16741	8207
16742	16742	8208
16743	16743	8209
16744	16744	8210
16745	16745	8211
16746	16746	8212
16747	16747	8213
16748	16748	8214
16749	16749	8215
16750	16750	8216
16751	16751	8217
16752	16752	8218
16753	16753	8219
16754	16754	8220
16755	16755	8221
16756	16756	8222
16757	16757	8223
16758	16758	8224
16759	16759	8225
16760	16760	8226
16761	16761	8227
16762	16762	8228
16763	16763	8229
16764	16764	8230
16765	16765	8231
16766	16766	8232
16767	16767	8233 SB245 INTRODUCEDSB245 INTRODUCED
16768	16768	Page 295
16769	16769	most recently completed fiscal year.
16770	16770	(b) To obtain the approval of the stockholders under
16771	16771	subsection (a) the board of directors shall first adopt a
16772	16772	resolution authorizing the disposition. The disposition shall
16773	16773	then be approved by the stockholders. In submitting the
16774	16774	disposition to the stockholders for approval, the board of
16775	16775	directors shall recommend that the stockholders approve the
16776	16776	disposition, unless (i) the board of directors makes a
16777	16777	determination that because of conflicts of interest or other
16778	16778	special circumstances it should not make a recommendation, or
16779	16779	(ii) Section 10A-2A-8.26 applies. If either (i) or (ii)
16780	16780	applies, the board of directors shall inform the stockholders
16781	16781	of the basis for its so proceeding.
16782	16782	(c) The board of directors may set conditions for the
16783	16783	approval by the stockholders of a disposition or the
16784	16784	effectiveness of the disposition.
16785	16785	(d) If a disposition is required to be approved by the
16786	16786	stockholders under subsection (a), and if the approval is to
16787	16787	be given at a meeting, the corporation shall notify each
16788	16788	stockholder, regardless of whether entitled to vote, of the
16789	16789	meeting of stockholders at which the disposition is to be
16790	16790	submitted for approval. The notice must state that the
16791	16791	purpose, or one of the purposes, of the meeting is to consider
16792	16792	the disposition and must contain a description of the
16793	16793	disposition, including the terms and conditions of the
16794	16794	disposition and the consideration to be received by the
16795	16795	corporation.
16796	16796	(e) Unless the certificate of incorporation or the
16797	16797	8234
16798	16798	8235
16799	16799	8236
16800	16800	8237
16801	16801	8238
16802	16802	8239
16803	16803	8240
16804	16804	8241
16805	16805	8242
16806	16806	8243
16807	16807	8244
16808	16808	8245
16809	16809	8246
16810	16810	8247
16811	16811	8248
16812	16812	8249
16813	16813	8250
16814	16814	8251
16815	16815	8252
16816	16816	8253
16817	16817	8254
16818	16818	8255
16819	16819	8256
16820	16820	8257
16821	16821	8258
16822	16822	8259
16823	16823	8260
16824	16824	8261 SB245 INTRODUCEDSB245 INTRODUCED
16825	16825	Page 296
16826	16826	board of directors acting pursuant to subsection (c) requires
16827	16827	a greater vote or a greater quorum, the approval of a
16828	16828	disposition by the stockholders shall require the approval of
16829	16829	the stockholders at a meeting at which a quorum exists
16830	16830	consisting of a majority of the votes entitled to be cast on
16831	16831	the disposition.
16832	16832	(f) After a disposition has been approved by the
16833	16833	stockholders under this Article 12, and at any time before the
16834	16834	disposition has been consummated, it may be abandoned by the
16835	16835	corporation without action by the stockholders, subject to any
16836	16836	contractual rights of other parties to the disposition.
16837	16837	(g) A disposition of assets in the course of
16838	16838	dissolution under Article 14 is not governed by this section.
16839	16839	(h) For purposes of this section only, the property and
16840	16840	assets of the corporation include the property and assets of
16841	16841	any subsidiary of the corporation. As used in this subsection,
16842	16842	"subsidiary" means any entity wholly owned and controlled,
16843	16843	directly or indirectly, by the corporation and includes,
16844	16844	without limitation, corporations, partnerships, limited
16845	16845	partnerships, limited liability partnerships, limited
16846	16846	liability companies, and/or statutory trusts. Notwithstanding
16847	16847	subsection (a) of this section, except to the extent the
16848	16848	certificate of incorporation otherwise provides, no vote by
16849	16849	stockholders shall be required for a sale, lease, or exchange
16850	16850	of property and assets of the corporation to a subsidiary. "
16851	16851	"§10A-2A-14.13
16852	16852	(a) If after a hearing the court determines that one or
16853	16853	more grounds for judicial dissolution described in Section
16854	16854	8262
16855	16855	8263
16856	16856	8264
16857	16857	8265
16858	16858	8266
16859	16859	8267
16860	16860	8268
16861	16861	8269
16862	16862	8270
16863	16863	8271
16864	16864	8272
16865	16865	8273
16866	16866	8274
16867	16867	8275
16868	16868	8276
16869	16869	8277
16870	16870	8278
16871	16871	8279
16872	16872	8280
16873	16873	8281
16874	16874	8282
16875	16875	8283
16876	16876	8284
16877	16877	8285
16878	16878	8286
16879	16879	8287
16880	16880	8288
16881	16881	8289 SB245 INTRODUCEDSB245 INTRODUCED
16882	16882	Page 297
16883	16883	10A-2A-14.10 exist, it the court may enter a decree dissolving
16884	16884	the corporation and specifying the effective date of the
16885	16885	dissolution, and. If the court enters a decree dissolving the
16886	16886	corporation, then the clerk of the court shall deliver a
16887	16887	certified copy of the decree to the Secretary of State for
16888	16888	filing.
16889	16889	(b) After entering the decree of dissolution, the court
16890	16890	shall direct the winding-up and liquidation of the
16891	16891	corporation's business and affairs in accordance with Section
16892	16892	10A-2A-14.05 and the notification of claimants in accordance
16893	16893	with Sections 10A-2A-14.06 and 10A-2A-14.07."
16894	16894	Section 4. Sections 10A-2A-10.00 and 10A-2A-10.10 are
16895	16895	added to the Code of Alabama 1975, to read as follows:
16896	16896	§10A-2A-10.00. Applicability of Chapter 1.
16897	16897	Division B of Article 3 of Chapter 1 shall not apply to
16898	16898	this chapter.
16899	16899	§10A-2A-10.10. Effect of filing of restated certificate
16900	16900	of incorporation.
16901	16901	(a) A restated certificate of incorporation takes
16902	16902	effect when the filing of the restated certificate of
16903	16903	incorporation takes effect as provided by Article 4 of Chapter
16904	16904	1.
16905	16905	(b) On the date and time the restated certificate of
16906	16906	incorporation takes effect, the original certificate of
16907	16907	incorporation and each prior amendment or restatement of the
16908	16908	certificate of incorporation is superseded and the restated
16909	16909	certificate of incorporation is the effective certificate of
16910	16910	incorporation.
16911	16911	8290
16912	16912	8291
16913	16913	8292
16914	16914	8293
16915	16915	8294
16916	16916	8295
16917	16917	8296
16918	16918	8297
16919	16919	8298
16920	16920	8299
16921	16921	8300
16922	16922	8301
16923	16923	8302
16924	16924	8303
16925	16925	8304
16926	16926	8305
16927	16927	8306
16928	16928	8307
16929	16929	8308
16930	16930	8309
16931	16931	8310
16932	16932	8311
16933	16933	8312
16934	16934	8313
16935	16935	8314
16936	16936	8315
16937	16937	8316
16938	16938	8317 SB245 INTRODUCEDSB245 INTRODUCED
16939	16939	Page 298
16940	16940	(c) Section 10A-2A-10.09 applies to an amendment
16941	16941	effected by a restated certificate of incorporation.
16942	16942	Section 5. Sections 10A-5A-2.03 and 10A-5A-10.07 of the
16943	16943	Code of Alabama 1975, are amended to read as follows:
16944	16944	"§10A-5A-2.03
16945	16945	(a) The filing of a certificate of amendment to the
16946	16946	certificate of formation shall have the effect, and shall take
16947	16947	effect, as provided in Section 10A-1-3.14.
16948	16948	(b) The filing of a restated certificate of formation
16949	16949	shall have the effect, and shall take effect, as provided in
16950	16950	Section 10A-1-3.18.
16951	16951	(a)(1) An amendment to a certificate of formation takes
16952	16952	effect when the filing of the certificate of amendment takes
16953	16953	effect as provided by Article 4 of Chapter 1.
16954	16954	(2) An amendment to a certificate of formation does not
16955	16955	affect:
16956	16956	(i) an existing cause of action in favor of or against
16957	16957	the limited liability company for which the certificate of
16958	16958	amendment is sought;
16959	16959	(ii) a pending suit to which the limited liability
16960	16960	company is a party; or
16961	16961	(iii) an existing right of a person other than an
16962	16962	existing member.
16963	16963	(3) If the name of a limited liability company is
16964	16964	changed by amendment, an action brought by or against the
16965	16965	limited liability company in the former name of that limited
16966	16966	liability company does not abate because of the name change.
16967	16967	(b)(1) A restated certificate of formation takes effect
16968	16968	8318
16969	16969	8319
16970	16970	8320
16971	16971	8321
16972	16972	8322
16973	16973	8323
16974	16974	8324
16975	16975	8325
16976	16976	8326
16977	16977	8327
16978	16978	8328
16979	16979	8329
16980	16980	8330
16981	16981	8331
16982	16982	8332
16983	16983	8333
16984	16984	8334
16985	16985	8335
16986	16986	8336
16987	16987	8337
16988	16988	8338
16989	16989	8339
16990	16990	8340
16991	16991	8341
16992	16992	8342
16993	16993	8343
16994	16994	8344
16995	16995	8345 SB245 INTRODUCEDSB245 INTRODUCED
16996	16996	Page 299
16997	16997	when the filing of the restated certificate of formation takes
16998	16998	effect as provided by Article 4 of Chapter 1.
16999	16999	(2) On the date and time the restated certificate of
17000	17000	formation takes effect, the original certificate of formation
17001	17001	and each prior amendment or restatement of the certificate of
17002	17002	formation is superseded and the restated certificate of
17003	17003	formation is the effective certificate of formation.
17004	17004	(3) Subsections (b)(1) and (2) apply to an amendment
17005	17005	effected by a restated certificate of formation. "
17006	17006	"§10A-5A-10.07
17007	17007	(a) After each constituent organization has approved
17008	17008	the plan of merger, a statement of merger must be signed on
17009	17009	behalf of:
17010	17010	(1) each constituent limited liability company, as
17011	17011	provided in Section 10A-5A-2.04(a); and
17012	17012	(2) each other constituent organization, as provided by
17013	17013	its governing statute.
17014	17014	(b) A statement of merger under this section must
17015	17015	include:
17016	17016	(1) the name, type of organization, and mailing address
17017	17017	of the principal office of each constituent organization, the
17018	17018	jurisdiction of the governing statute of each constituent
17019	17019	organization, and the respective unique identifying number or
17020	17020	other designation as assigned by the Secretary of State, if
17021	17021	any, of each constituent organization;
17022	17022	(2) the name, type of organization, and mailing address
17023	17023	of the principal office of the surviving organization, the
17024	17024	unique identifying number or other designation as assigned by
17025	17025	8346
17026	17026	8347
17027	17027	8348
17028	17028	8349
17029	17029	8350
17030	17030	8351
17031	17031	8352
17032	17032	8353
17033	17033	8354
17034	17034	8355
17035	17035	8356
17036	17036	8357
17037	17037	8358
17038	17038	8359
17039	17039	8360
17040	17040	8361
17041	17041	8362
17042	17042	8363
17043	17043	8364
17044	17044	8365
17045	17045	8366
17046	17046	8367
17047	17047	8368
17048	17048	8369
17049	17049	8370
17050	17050	8371
17051	17051	8372
17052	17052	8373 SB245 INTRODUCEDSB245 INTRODUCED
17053	17053	Page 300
17054	17054	the Secretary of State, if any, of the surviving organization,
17055	17055	the jurisdiction of the governing statute of the surviving
17056	17056	organization, and, if the surviving organization is created
17057	17057	pursuant to the merger, a statement to that effect;
17058	17058	(3) the date of the filing of the certificate of
17059	17059	formation, if any, and all prior amendments and the filing
17060	17060	office or offices, if any, and where such is filed of each
17061	17061	constituent organization which was formed under the laws of
17062	17062	this state;
17063	17063	(4)(3) the date the merger is effective under the
17064	17064	governing statute of the surviving organization;
17065	17065	(5)(4) if the surviving organization is to be created
17066	17066	pursuant to the merger:
17067	17067	(A) if it will be a limited liability company, the
17068	17068	limited liability company's certificate of formation; or
17069	17069	(B) if it will be an organization other than a limited
17070	17070	liability company, any organizational document that creates
17071	17071	the organization that is required to be in a public writing;
17072	17072	(6)(5) if the surviving organization exists before the
17073	17073	merger, any amendments provided for in the plan of merger for
17074	17074	the organizational document that created the organization that
17075	17075	are required to be in a public writing;
17076	17076	(7)(6) a statement as to each constituent organization
17077	17077	that the merger was approved as required by the organization's
17078	17078	governing statute;
17079	17079	(8)(7) a statement that a copy of the plan of merger
17080	17080	will be furnished by the surviving organization, on request
17081	17081	and without cost, to any owner of any constituent organization
17082	17082	8374
17083	17083	8375
17084	17084	8376
17085	17085	8377
17086	17086	8378
17087	17087	8379
17088	17088	8380
17089	17089	8381
17090	17090	8382
17091	17091	8383
17092	17092	8384
17093	17093	8385
17094	17094	8386
17095	17095	8387
17096	17096	8388
17097	17097	8389
17098	17098	8390
17099	17099	8391
17100	17100	8392
17101	17101	8393
17102	17102	8394
17103	17103	8395
17104	17104	8396
17105	17105	8397
17106	17106	8398
17107	17107	8399
17108	17108	8400
17109	17109	8401 SB245 INTRODUCEDSB245 INTRODUCED
17110	17110	Page 301
17111	17111	which is a party to the merger;
17112	17112	(9)(8) if the surviving organization is a foreign
17113	17113	organization not authorized to conduct activities and affairs
17114	17114	in this state, the street and mailing address of an office for
17115	17115	the purposes of Section 10A-5A-10.08(b); and
17116	17116	(10)(9) any additional information required by the
17117	17117	governing statute of any constituent organization.
17118	17118	(c) The statement of merger shall be delivered for
17119	17119	filing to the Secretary of State.
17120	17120	(d) A merger becomes effective under this article:
17121	17121	(1) if the surviving organization is a limited
17122	17122	liability company, upon the later of:
17123	17123	(A) the filing of the statement of merger with the
17124	17124	Secretary of State; or
17125	17125	(B) as specified in the statement of merger; or
17126	17126	(2) if the surviving organization is not a limited
17127	17127	liability company, as provided by the governing statute of the
17128	17128	surviving organization.
17129	17129	(e) After a merger becomes effective, if the surviving
17130	17130	organization is a limited liability company, then, except for
17131	17131	certified copies of the statement of merger permitted to be
17132	17132	delivered to the judge of probate for filing pursuant to
17133	17133	subsection (f), all filing instruments required to be filed
17134	17134	under this title regarding that surviving organization shall
17135	17135	be delivered for filing to the Secretary of State.
17136	17136	(f)(e) A certified copy of the statement of merger
17137	17137	required to be filed under this section may be filed in the
17138	17138	real estate records in the office of the judge of probate in
17139	17139	8402
17140	17140	8403
17141	17141	8404
17142	17142	8405
17143	17143	8406
17144	17144	8407
17145	17145	8408
17146	17146	8409
17147	17147	8410
17148	17148	8411
17149	17149	8412
17150	17150	8413
17151	17151	8414
17152	17152	8415
17153	17153	8416
17154	17154	8417
17155	17155	8418
17156	17156	8419
17157	17157	8420
17158	17158	8421
17159	17159	8422
17160	17160	8423
17161	17161	8424
17162	17162	8425
17163	17163	8426
17164	17164	8427
17165	17165	8428
17166	17166	8429 SB245 INTRODUCEDSB245 INTRODUCED
17167	17167	Page 302
17168	17168	any county in which any constituent organization owned real
17169	17169	property, without payment and without collection by the judge
17170	17170	of probate of any deed or other transfer tax or fee. The judge
17171	17171	of probate, however, shall be entitled to collect the filing
17172	17172	fee of five dollars ($5). Any such filing shall evidence chain
17173	17173	of title, but lack of filing shall not affect the surviving
17174	17174	organization's title to such real property.
17175	17175	(g)(f) A statement of merger is a filing instrument
17176	17176	under Chapter 1.
17177	17177	(h)(g) The filing fees for a statement of merger shall
17178	17178	be as set forth in Chapter 1."
17179	17179	Section 6. Section 10A-8A-9.08 of the Code of Alabama
17180	17180	1975, is amended to read as follows:
17181	17181	"§10A-8A-9.08
17182	17182	(a) After each constituent organization has approved
17183	17183	the plan of merger, a statement of merger must be signed on
17184	17184	behalf of:
17185	17185	(1) each constituent partnership, as provided in
17186	17186	Section 10A-8A-2.03(a); and
17187	17187	(2) each other constituent organization, as provided by
17188	17188	its governing statute.
17189	17189	(b) A statement of merger under this section must
17190	17190	include:
17191	17191	(1) the name, type of organization, and mailing address
17192	17192	of the principal office of each constituent organization, the
17193	17193	jurisdiction of the governing statute of each constituent
17194	17194	organization, and the respective unique identifying numbers or
17195	17195	other designations as assigned by the Secretary of State, if
17196	17196	8430
17197	17197	8431
17198	17198	8432
17199	17199	8433
17200	17200	8434
17201	17201	8435
17202	17202	8436
17203	17203	8437
17204	17204	8438
17205	17205	8439
17206	17206	8440
17207	17207	8441
17208	17208	8442
17209	17209	8443
17210	17210	8444
17211	17211	8445
17212	17212	8446
17213	17213	8447
17214	17214	8448
17215	17215	8449
17216	17216	8450
17217	17217	8451
17218	17218	8452
17219	17219	8453
17220	17220	8454
17221	17221	8455
17222	17222	8456
17223	17223	8457 SB245 INTRODUCEDSB245 INTRODUCED
17224	17224	Page 303
17225	17225	any, of each constituent organization;
17226	17226	(2) the name, type of organization, and mailing address
17227	17227	of the principal office of the surviving organization, the
17228	17228	unique identifying number or other designation as assigned by
17229	17229	the Secretary of State, if any, of the surviving organization,
17230	17230	the jurisdiction of the governing statute of the surviving
17231	17231	organization, and, if the surviving organization is created
17232	17232	pursuant to the merger, a statement to that effect;
17233	17233	(3) the date of the filing of the certificate of
17234	17234	formation, if any, and all prior amendments and the filing
17235	17235	office or offices, if any, and where such is filed of each
17236	17236	constituent organization which was formed under the laws of
17237	17237	this state;
17238	17238	(4)(3) the date of the filing of the statement of
17239	17239	partnership, statement of not for profit partnership, or
17240	17240	statement of limited liability partnership, if any, and all
17241	17241	prior amendments and the filing office or offices, if any, and
17242	17242	where such is filed of each constituent organization which is
17243	17243	a partnership;
17244	17244	(5)(4) the date the merger is effective under the
17245	17245	governing statute of the surviving organization;
17246	17246	(6)(5) if the surviving organization is to be created
17247	17247	pursuant to the merger:
17248	17248	(A) if it will be a partnership, the partnership's
17249	17249	statement of partnership, statement of not for profit
17250	17250	partnership, or statement of limited liability partnership; or
17251	17251	(B) if it will be an organization other than a
17252	17252	partnership, any organizational document that creates the
17253	17253	8458
17254	17254	8459
17255	17255	8460
17256	17256	8461
17257	17257	8462
17258	17258	8463
17259	17259	8464
17260	17260	8465
17261	17261	8466
17262	17262	8467
17263	17263	8468
17264	17264	8469
17265	17265	8470
17266	17266	8471
17267	17267	8472
17268	17268	8473
17269	17269	8474
17270	17270	8475
17271	17271	8476
17272	17272	8477
17273	17273	8478
17274	17274	8479
17275	17275	8480
17276	17276	8481
17277	17277	8482
17278	17278	8483
17279	17279	8484
17280	17280	8485 SB245 INTRODUCEDSB245 INTRODUCED
17281	17281	Page 304
17282	17282	organization that is required to be in a public writing;
17283	17283	(7)(6) if the surviving organization exists before the
17284	17284	merger, any amendments provided for in the plan of merger for
17285	17285	the organizational document that are required to be in a
17286	17286	public writing;
17287	17287	(8)(7) a statement as to each constituent organization
17288	17288	that the merger was approved as required by the organization's
17289	17289	governing statute;
17290	17290	(9)(8) a statement that a copy of the plan of merger
17291	17291	will be furnished by the surviving organization, on request
17292	17292	and without cost, to any owner of any constituent organization
17293	17293	which is a party to the merger;
17294	17294	(10)(9) if the surviving organization is a foreign
17295	17295	organization not authorized to conduct business or not for
17296	17296	profit activity in this state, the street and mailing address
17297	17297	of an office for the purposes of Section 10A-8A-9.09(b); and
17298	17298	(11)(10) any additional information required by the
17299	17299	governing statute of any constituent organization.
17300	17300	(c) Prior to the statement of merger being delivered
17301	17301	for filing to the Secretary of State in accordance with
17302	17302	subsection (d), all constituent organizations that are
17303	17303	partnerships, other than a partnership that is created
17304	17304	pursuant to the merger, must have on file with the Secretary
17305	17305	of State a statement of partnership, statement of not for
17306	17306	profit partnership, or statement of limited liability
17307	17307	partnership.
17308	17308	(d) The statement of merger shall be delivered for
17309	17309	filing to the Secretary of State.
17310	17310	8486
17311	17311	8487
17312	17312	8488
17313	17313	8489
17314	17314	8490
17315	17315	8491
17316	17316	8492
17317	17317	8493
17318	17318	8494
17319	17319	8495
17320	17320	8496
17321	17321	8497
17322	17322	8498
17323	17323	8499
17324	17324	8500
17325	17325	8501
17326	17326	8502
17327	17327	8503
17328	17328	8504
17329	17329	8505
17330	17330	8506
17331	17331	8507
17332	17332	8508
17333	17333	8509
17334	17334	8510
17335	17335	8511
17336	17336	8512
17337	17337	8513 SB245 INTRODUCEDSB245 INTRODUCED
17338	17338	Page 305
17339	17339	(e) A merger becomes effective under this article:
17340	17340	(1) if the surviving organization is a partnership,
17341	17341	upon the later of:
17342	17342	(A) the filing of the statement of merger with the
17343	17343	Secretary of State; or
17344	17344	(B) as specified in the statement of merger; or
17345	17345	(2) if the surviving organization is not a partnership,
17346	17346	as provided by the governing statute of the surviving
17347	17347	organization.
17348	17348	(f) After a merger becomes effective, if the surviving
17349	17349	organization is a partnership, then, except (I) the statement
17350	17350	of merger permitted to be delivered to the judge of probate
17351	17351	for filing pursuant to subsection (g) and (II) certified
17352	17352	copies of statements of authority, denial, and cancellations
17353	17353	thereof permitted to be delivered to the judge of probate for
17354	17354	filing pursuant to Sections 10A-8A-3.03 and 10A-8A-3.04 for
17355	17355	certified copies of, all filing instruments required to be
17356	17356	filed under this title regarding that surviving organization
17357	17357	shall be delivered for filing to the Secretary of State.
17358	17358	(g)(f) A certified copy of the statement of merger
17359	17359	required to be filed under this section may be filed in the
17360	17360	real estate records in the office of the judge of probate in
17361	17361	any county in which any constituent organization owned real
17362	17362	property, without payment and without collection by the judge
17363	17363	of probate of any deed or other transfer tax or fee. The judge
17364	17364	of probate, however, shall be entitled to collect the filing
17365	17365	fee of five dollars ($5). Any such filing shall evidence chain
17366	17366	of title, but lack of filing shall not affect the surviving
17367	17367	8514
17368	17368	8515
17369	17369	8516
17370	17370	8517
17371	17371	8518
17372	17372	8519
17373	17373	8520
17374	17374	8521
17375	17375	8522
17376	17376	8523
17377	17377	8524
17378	17378	8525
17379	17379	8526
17380	17380	8527
17381	17381	8528
17382	17382	8529
17383	17383	8530
17384	17384	8531
17385	17385	8532
17386	17386	8533
17387	17387	8534
17388	17388	8535
17389	17389	8536
17390	17390	8537
17391	17391	8538
17392	17392	8539
17393	17393	8540
17394	17394	8541 SB245 INTRODUCEDSB245 INTRODUCED
17395	17395	Page 306
17396	17396	organization's title to such real property.
17397	17397	(h)(g) A statement of merger is a filing instrument
17398	17398	under Chapter 1.
17399	17399	(i)(h) The filing fees for a statement of merger shall
17400	17400	be as set forth in Chapter 1."
17401	17401	Section 7. Sections 10A-9A-2.02 and 10A-9A-10.08 of the
17402	17402	Code of Alabama 1975, are amended to read as follows:
17403	17403	"§10A-9A-2.02
17404	17404	Division B of Article 3 of Chapter 1 shall not apply to
17405	17405	this chapter. Instead:
17406	17406	(a) A certificate of formation may be amended at any
17407	17407	time.
17408	17408	(b) A certificate of formation may be restated with or
17409	17409	without amendment at any time.
17410	17410	(c) To amend its certificate of formation, a limited
17411	17411	partnership must deliver a certificate of amendment for filing
17412	17412	to the Secretary of State which certificate of amendment shall
17413	17413	state:
17414	17414	(1) the name of the limited partnership;
17415	17415	(2) the unique identifying number or other designation
17416	17416	as assigned by the Secretary of State; and
17417	17417	(3) the changes the amendment makes to the certificate
17418	17418	of formation as most recently amended or restated.
17419	17419	(d) Prior to a statement of dissolution being delivered
17420	17420	to the Secretary of State for filing, a limited partnership
17421	17421	shall promptly deliver a certificate of amendment for filing
17422	17422	with the Secretary of State to reflect:
17423	17423	(1) the admission of a new general partner; or
17424	17424	8542
17425	17425	8543
17426	17426	8544
17427	17427	8545
17428	17428	8546
17429	17429	8547
17430	17430	8548
17431	17431	8549
17432	17432	8550
17433	17433	8551
17434	17434	8552
17435	17435	8553
17436	17436	8554
17437	17437	8555
17438	17438	8556
17439	17439	8557
17440	17440	8558
17441	17441	8559
17442	17442	8560
17443	17443	8561
17444	17444	8562
17445	17445	8563
17446	17446	8564
17447	17447	8565
17448	17448	8566
17449	17449	8567
17450	17450	8568
17451	17451	8569 SB245 INTRODUCEDSB245 INTRODUCED
17452	17452	Page 307
17453	17453	(2) the dissociation of a person as a general partner.
17454	17454	(e) Prior to a statement of dissolution being delivered
17455	17455	to the Secretary of State for filing, if a general partner
17456	17456	knows that any information in a filed certificate of formation
17457	17457	was inaccurate when the certificate of formation was filed or
17458	17458	has become inaccurate due to changed circumstances and if such
17459	17459	information is required to be set forth in a newly filed
17460	17460	certificate of formation under this chapter, the general
17461	17461	partner shall promptly:
17462	17462	(1) cause the certificate of formation to be amended;
17463	17463	or
17464	17464	(2) if appropriate, deliver for filing with the
17465	17465	Secretary of State a certificate of correction in accordance
17466	17466	with Chapter 1.
17467	17467	(f) A certificate of formation may be amended at any
17468	17468	time pursuant to this section for any other proper purpose as
17469	17469	determined by the limited partnership. A certificate of
17470	17470	formation may also be amended in a statement of merger
17471	17471	pursuant to Article 8 of Chapter 1 or Article 10 of this
17472	17472	chapter.
17473	17473	(g) In order to restate its certificate of formation, a
17474	17474	limited partnership must deliver a restated certificate of
17475	17475	formation for filing with the Secretary of State. A restated
17476	17476	certificate of formation must:
17477	17477	(1) be designated as such in the heading;
17478	17478	(2) state the name of the limited partnership;
17479	17479	(3) state the unique identifying number or other
17480	17480	designation as assigned by the Secretary of State;
17481	17481	8570
17482	17482	8571
17483	17483	8572
17484	17484	8573
17485	17485	8574
17486	17486	8575
17487	17487	8576
17488	17488	8577
17489	17489	8578
17490	17490	8579
17491	17491	8580
17492	17492	8581
17493	17493	8582
17494	17494	8583
17495	17495	8584
17496	17496	8585
17497	17497	8586
17498	17498	8587
17499	17499	8588
17500	17500	8589
17501	17501	8590
17502	17502	8591
17503	17503	8592
17504	17504	8593
17505	17505	8594
17506	17506	8595
17507	17507	8596
17508	17508	8597 SB245 INTRODUCEDSB245 INTRODUCED
17509	17509	Page 308
17510	17510	(4) set forth any amendment or change effected in
17511	17511	connection with the restatement of the certificate of
17512	17512	formation. Any such restatement that effects an amendment
17513	17513	shall be subject to any other provision of this chapter not
17514	17514	inconsistent with this section, which would apply if a
17515	17515	separate certificate of amendment were filed to effect the
17516	17516	amendment or change;
17517	17517	(5) set forth the text of the restated certificate of
17518	17518	formation; and
17519	17519	(6) state that the restated certificate of formation
17520	17520	consolidates all amendments into a single document.
17521	17521	(h) The original certificate of formation, as
17522	17522	theretofore amended, shall be superseded by the restated
17523	17523	certificate of formation and thenceforth, the restated
17524	17524	certificate of formation, including any further amendment or
17525	17525	changes made thereby, shall be the certificate of formation of
17526	17526	the limited partnership, but the original effective date of
17527	17527	formation shall remain unchanged.
17528	17528	(i) An amended or restated certificate of formation may
17529	17529	contain only the provisions that would be permitted at the
17530	17530	time of the amendment if the amended or restated certificate
17531	17531	of formation were a newly filed original certificate of
17532	17532	formation.
17533	17533	(j) The filing of a certificate of amendment to the
17534	17534	certificate of formation shall have the effect, and shall take
17535	17535	effect, as provided in Section 10A-1-3.14.
17536	17536	(k) The filing of a restated certificate of formation
17537	17537	shall have the effect, and shall take effect, as provided in
17538	17538	8598
17539	17539	8599
17540	17540	8600
17541	17541	8601
17542	17542	8602
17543	17543	8603
17544	17544	8604
17545	17545	8605
17546	17546	8606
17547	17547	8607
17548	17548	8608
17549	17549	8609
17550	17550	8610
17551	17551	8611
17552	17552	8612
17553	17553	8613
17554	17554	8614
17555	17555	8615
17556	17556	8616
17557	17557	8617
17558	17558	8618
17559	17559	8619
17560	17560	8620
17561	17561	8621
17562	17562	8622
17563	17563	8623
17564	17564	8624
17565	17565	8625 SB245 INTRODUCEDSB245 INTRODUCED
17566	17566	Page 309
17567	17567	Section 10A-1-3.18.
17568	17568	(j)(1) An amendment to a certificate of formation takes
17569	17569	effect when the filing of the certificate of amendment takes
17570	17570	effect as provided by Article 4 of Chapter 1.
17571	17571	(2) An amendment to a certificate of formation does not
17572	17572	affect:
17573	17573	(i) an existing cause of action in favor of or against
17574	17574	the limited partnership for which the certificate of amendment
17575	17575	is sought;
17576	17576	(ii) a pending suit to which the limited partnership is
17577	17577	a party; or
17578	17578	(iii) an existing right of a person other than an
17579	17579	existing partner.
17580	17580	(3) If the name of a limited partnership is changed by
17581	17581	amendment, an action brought by or against the limited
17582	17582	partnership in the former name of that limited partnership
17583	17583	does not abate because of the name change.
17584	17584	(k)(1) A restated certificate of formation takes effect
17585	17585	when the filing of the restated certificate of formation takes
17586	17586	effect as provided by Article 4 of Chapter 1.
17587	17587	(2) On the date and time the restated certificate of
17588	17588	formation takes effect, the original certificate of formation
17589	17589	and each prior amendment or restatement of the certificate of
17590	17590	formation is superseded and the restated certificate of
17591	17591	formation is the effective certificate of formation.
17592	17592	(3) Subsections (j)(2) and (3) apply to an amendment
17593	17593	effected by a restated certificate of formation. "
17594	17594	"§10A-9A-10.08
17595	17595	8626
17596	17596	8627
17597	17597	8628
17598	17598	8629
17599	17599	8630
17600	17600	8631
17601	17601	8632
17602	17602	8633
17603	17603	8634
17604	17604	8635
17605	17605	8636
17606	17606	8637
17607	17607	8638
17608	17608	8639
17609	17609	8640
17610	17610	8641
17611	17611	8642
17612	17612	8643
17613	17613	8644
17614	17614	8645
17615	17615	8646
17616	17616	8647
17617	17617	8648
17618	17618	8649
17619	17619	8650
17620	17620	8651
17621	17621	8652
17622	17622	8653 SB245 INTRODUCEDSB245 INTRODUCED
17623	17623	Page 310
17624	17624	(a) After each constituent organization has approved
17625	17625	the plan of merger, a statement of merger must be signed on
17626	17626	behalf of:
17627	17627	(1) each constituent limited partnership, as provided
17628	17628	in Section 10A-9A-2.03(a); and
17629	17629	(2) each other constituent organization, as provided by
17630	17630	its governing statute.
17631	17631	(b) A statement of merger under this section must
17632	17632	include:
17633	17633	(1) the name, type of organization, and mailing address
17634	17634	of the principal office of each constituent organization, the
17635	17635	jurisdiction of the governing statute of each constituent
17636	17636	organization, and the respective unique identifying numbers or
17637	17637	other designations as assigned by the Secretary of State, if
17638	17638	any, of each constituent organization;
17639	17639	(2) the name, type of organization, and mailing address
17640	17640	of the principal office of the surviving organization, the
17641	17641	unique identifying number or other designation as assigned by
17642	17642	the Secretary of State, if any, of the surviving organization,
17643	17643	the jurisdiction of the governing statute of the surviving
17644	17644	organization, and, if the surviving organization is created
17645	17645	pursuant to the merger, a statement to that effect;
17646	17646	(3) the date of the filing of the certificate of
17647	17647	formation, if any, and all prior amendments and the filing
17648	17648	office or offices, if any, and where such is filed of each
17649	17649	constituent organization which was formed under the laws of
17650	17650	this state;
17651	17651	(4)(3) the date the merger is effective under the
17652	17652	8654
17653	17653	8655
17654	17654	8656
17655	17655	8657
17656	17656	8658
17657	17657	8659
17658	17658	8660
17659	17659	8661
17660	17660	8662
17661	17661	8663
17662	17662	8664
17663	17663	8665
17664	17664	8666
17665	17665	8667
17666	17666	8668
17667	17667	8669
17668	17668	8670
17669	17669	8671
17670	17670	8672
17671	17671	8673
17672	17672	8674
17673	17673	8675
17674	17674	8676
17675	17675	8677
17676	17676	8678
17677	17677	8679
17678	17678	8680
17679	17679	8681 SB245 INTRODUCEDSB245 INTRODUCED
17680	17680	Page 311
17681	17681	governing statute of the surviving organization;
17682	17682	(5)(4) if the surviving organization is to be created
17683	17683	pursuant to the merger:
17684	17684	(A) if it will be a limited partnership, the limited
17685	17685	partnership's certificate of formation; or
17686	17686	(B) if it will be an organization other than a limited
17687	17687	partnership, any organizational document that creates the
17688	17688	organization that is required to be in a public writing;
17689	17689	(6)(5) if the surviving organization exists before the
17690	17690	merger, any amendments provided for in the plan of merger for
17691	17691	the organizational document that created the organization that
17692	17692	are required to be in a public writing;
17693	17693	(7)(6) a statement as to each constituent organization
17694	17694	that the merger was approved as required by the organization's
17695	17695	governing statute;
17696	17696	(8)(7) a statement that a copy of the plan of merger
17697	17697	will be furnished by the surviving organization, on request
17698	17698	and without cost, to any owner of any constituent organization
17699	17699	which is a party to the merger;
17700	17700	(9)(8) if the surviving organization is a foreign
17701	17701	organization not authorized to conduct activities and affairs
17702	17702	in this state, the street and mailing address of an office for
17703	17703	the purposes of Section 10A-9A-10.09(b); and
17704	17704	(10)(9) any additional information required by the
17705	17705	governing statute of any constituent organization.
17706	17706	(c) The statement of merger shall be delivered for
17707	17707	filing to the Secretary of State.
17708	17708	(d) A merger becomes effective under this article:
17709	17709	8682
17710	17710	8683
17711	17711	8684
17712	17712	8685
17713	17713	8686
17714	17714	8687
17715	17715	8688
17716	17716	8689
17717	17717	8690
17718	17718	8691
17719	17719	8692
17720	17720	8693
17721	17721	8694
17722	17722	8695
17723	17723	8696
17724	17724	8697
17725	17725	8698
17726	17726	8699
17727	17727	8700
17728	17728	8701
17729	17729	8702
17730	17730	8703
17731	17731	8704
17732	17732	8705
17733	17733	8706
17734	17734	8707
17735	17735	8708
17736	17736	8709 SB245 INTRODUCEDSB245 INTRODUCED
17737	17737	Page 312
17738	17738	(1) if the surviving organization is a limited
17739	17739	partnership, upon the later of:
17740	17740	(A) the filing of the statement of merger with the
17741	17741	Secretary of State; or
17742	17742	(B) as specified in the statement of merger; or
17743	17743	(2) if the surviving organization is not a limited
17744	17744	partnership, as provided by the governing statute of the
17745	17745	surviving organization.
17746	17746	(e) After a merger becomes effective, if the surviving
17747	17747	organization is a limited partnership, then, except for
17748	17748	certified copies of the statement of merger permitted to be
17749	17749	delivered to the judge of probate for filing pursuant to
17750	17750	subsection (f), all filing instruments required to be filed
17751	17751	under this title regarding that surviving organization shall
17752	17752	be delivered for filing to the Secretary of State.
17753	17753	(f)(e) A certified copy of the statement of merger
17754	17754	required to be filed under this section may be filed in the
17755	17755	real estate records in the office of the judge of probate in
17756	17756	any county in which any constituent organization owned real
17757	17757	property, without payment and without collection by the judge
17758	17758	of probate of any deed or other transfer tax or fee. The judge
17759	17759	of probate, however, shall be entitled to collect the filing
17760	17760	fee of five dollars ($5). Any such filing shall evidence chain
17761	17761	of title, but lack of filing shall not affect the surviving
17762	17762	organization's title to such real property.
17763	17763	(g)(f) A statement of merger is a filing instrument
17764	17764	under Chapter 1.
17765	17765	(h)(g) The filing fees for a statement of merger shall
17766	17766	8710
17767	17767	8711
17768	17768	8712
17769	17769	8713
17770	17770	8714
17771	17771	8715
17772	17772	8716
17773	17773	8717
17774	17774	8718
17775	17775	8719
17776	17776	8720
17777	17777	8721
17778	17778	8722
17779	17779	8723
17780	17780	8724
17781	17781	8725
17782	17782	8726
17783	17783	8727
17784	17784	8728
17785	17785	8729
17786	17786	8730
17787	17787	8731
17788	17788	8732
17789	17789	8733
17790	17790	8734
17791	17791	8735
17792	17792	8736
17793	17793	8737 SB245 INTRODUCEDSB245 INTRODUCED
17794	17794	Page 313
17795	17795	be as set forth in Chapter 1."
17796	17796	Section 8. This act shall become effective January 1,
17797	17797	2024, following its passage and approval by the Governor, or
17798	17798	its otherwise becoming law.
17799	17799	8738
17800	17800	8739
17801	17801	8740
17802	17802	8741