Alabama House Bill HB200 Introduced / Bill

                    HB200INTRODUCED
Page 0
HB200
1NWI3LZ-1
By Representative Almond
RFD: Judiciary
First Read: 05-Feb-25
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5 1NWI3LZ-1 02/05/2025 KMS (L)ccr 2025-579
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First Read: 05-Feb-25
SYNOPSIS:
This bill would revise the Alabama Business and
Nonprofit Entity Code.
This bill would make technical changes, such as
corrected references to other parts of the Business and
Nonprofit Entities Code, and would codify practices
relating to electronic filing and name reservations.
This bill would codify the common law doctrine
of independent legal significance.
This bill would clarify the current practice of
approving and authorizing agreements, including
conversion, merger, and exchange agreements, and would
provide a ratification process for documents that were
not properly approved.
This bill would clarify the current practice of
providing termination fees and other consequences in
merger agreements.
This bill would clarify the existing practice of
naming merger agreements.
This bill would provide a simplified purchase
process upon the death or disqualification of a
stockholder or member of a professional corporation,
limited liability company, or partnership.
This bill would also provide that the agreement
for a limited liability company, a limited partnership,
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for a limited liability company, a limited partnership,
or partnership may allow for the transfer of a
transferable interest upon the death of a transferable
interest holder, with or without consideration, subject
to outstanding charging orders and subject to the
rights of creditors.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Alabama Business Corporation Law, the
Alabama Nonprofit Corporation Law, the Alabama Professional
Corporation Law, the Alabama Limited Liability Company Law,
the Alabama Partnership Law, and the Alabama Limited
Partnership Law; to amend Sections 10A-1-1.02, 10A-1-1.08, as
amended by Act 2024-413, 2024 Regular Session, 10A-1-2.11,
10A-1-3.08, 10A-1-5.08, 10A-1-5.09, 10A-1-5.10, 10A-1-5.32,
10A-1-5.33, 10A-1-5.34, 10A-1-7.01, 10A-1-7.04, 10A-1-8.01,
10A-1-8.02, 10A-2A-7.40, 10A-2A-9.11, 10A-2A-11.01,
10A-2A-11.02, 10A-2A-11.03, 10A-3A-12.01, 10A-3A-12.02,
10A-3A-13.02, 10A-4-3.02, as amended by Act 2024-413, 2024
Regular Session, 10A-5A-1.02, 10A-5A-1.06, 10A-5A-2.02, as
amended by Act 2024-413, 2024 Regular Session, 10A-5A-5.02,
10A-5A-5.04, 10A-5A-8.02, 10A-5A-10.01, 10A-5A-10.05,
10A-8A-1.07, 10A-8A-2.02, 10A-8A-3.03, 10A-8A-3.04,
10A-8A-5.02, 10A-8A-5.04, 10A-8A-8.02, 10A-8A-8.03,
10A-8A-8.11, 10A-8A-9.01, 10A-8A-9.02, 10A-8A-9.06,
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10A-8A-8.11, 10A-8A-9.01, 10A-8A-9.02, 10A-8A-9.06,
10A-8A-10.01, and 10A-8A-10.03, 10A-9A-1.07, 10A-9A-2.06,
10A-9A-7.02, 10A-9A-7.04, 10A-9A-9.02, 10A-9A-10.01,
10A-9A-10.02, 10A-9A-10.06, Code of Alabama 1975, and to add
Sections 10A-2A-3.05, 10A-2A-8.27, 10A-3A-3.05, and
10A-3A-8.26 to the Code of Alabama 1975; to make technical
corrections and to codify issues regarding electronic filing
issues and name reservation issues; to clarify the current
practice of providing certain termination fees and other
consequences in merger agreements; to clarify the current
practice of approving merger agreements; to clarify the
current practice of naming of merger agreements; to codify the
common law doctrine of independent legal significance; to
codify the current practice of approving and authorizing
agreements, including conversion, merger, and exchange
agreements, and providing a ratification process for documents
that were not properly approved; to provide a simplified
purchase process upon the death or disqualification of a
stockholder or member of an Alabama professional corporation;
to provide that a limited liability company agreement may
allow for the transfer of a transferable interest upon the
death of a transferable interest holder, with or without
consideration, subject to outstanding charging orders and
subject to the rights of creditors; to provide a simplified
purchase process upon the death or disqualification of a
member of an Alabama limited liability company; to provide
that a partnership agreement may allow for the transfer of a
transferable interest upon the death of a transferable
interest holder, with or without consideration, subject to
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interest holder, with or without consideration, subject to
outstanding charging orders and subject to the rights of
creditors; to provide a simplified purchase process upon the
death or disqualification of a member of an Alabama
partnership; to provide that a limited partnership agreement
may allow for the transfer of a transferable interest upon the
death of a transferable interest holder, with or without
consideration, subject to outstanding charging orders and
subject to the rights of creditors; and to provide an
effective date.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 10A-1-1.02, 10A-1-1.08, as amended
by Act 2024-413, 2024 Regular Session, 10A-1-2.11, 10A-1-3.08,
10A-1-5.08, 10A-1-5.09, 10A-1-5.10, 10A-1-5.32, 10A-1-5.33,
10A-1-5.34, 10A-1-7.01, 10A-1-7.04, 10A-1-8.01, and
10A-1-8.02, Code of Alabama 1975, are amended to read as
follows:
"§10A-1-1.02
(a) All provisions of this chapter shall apply to all
entities formed pursuant to or governed by Chapters 2A to 11,
inclusive, and Chapter Chapters 17 and 18, except as set forth
in this chapter and except as set forth in subsections (c),
(d), and (e).
(b) The provisions of this chapter shall apply to
entities formed pursuant to or governed by Chapter 16, Chapter
20, and Chapter 30 only as provided therein or expressly
provided in this chapter.
(c) If a provision of this chapter conflicts with a
provision in another chapter of this title, the provision of
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provision in another chapter of this title, the provision of
the other chapter, to the extent of the conflict, supersedes
the provision of this chapter.
(d) Provisions in another chapter may provide that the
provisions of this chapter do not apply by specifically
providing which provisions in this chapter do not apply.
(e) Provisions in another chapter may provide that the
governing documents of an entity governed by that other
chapter may supersede the provisions of this chapter by
specifically providing which provisions in this chapter may be
superseded by those governing documents."
"§10A-1-1.08
(a) The provisions of this title as described by this
section may be cited as provided by this section.
(b) Chapter 2A and the provisions of Chapter 1 to the
extent applicable to business corporations may be cited as the
Alabama Business Corporation Law.
(c) Chapter 3A and the provisions of Chapter 1 to the
extent applicable to nonprofit corporations may be cited as
the Alabama Nonprofit Corporation Law.
(d) Chapter 4 and the provisions of Chapter 1 to the
extent applicable to professional corporations may be cited as
the Alabama Professional Corporation Law.
(e) Chapter 5A and the provisions of Chapter 1 to the
extent applicable to limited liability companies may be cited
as the Alabama Limited Liability Company Law.
(f) Chapter 8A and the provisions of Chapter 1 to the
extent applicable to general partnerships may be cited as the
Alabama Partnership Law.
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Alabama Partnership Law.
(g) Chapter 9A and the provisions of Chapter 1 to the
extent applicable to limited partnerships may be cited as the
Alabama Limited Partnership Law.
(h) Chapter 10 and the provisions of Chapter 1 to the
extent applicable to real estate investment trusts may be
cited as the Alabama Real Estate Investment Trust Law.
(i) Chapter 11 and the provisions of Chapter 1 and
Chapter 2A to the extent applicable to employee cooperative
corporations may be cited as the Alabama Employee Cooperative
Corporations Law.
(j) Chapter 17 and the provisions of Chapter 1 to the
extent applicable to unincorporated nonprofit associations may
be cited as the Alabama Unincorporated Nonprofit Association
Law.
(k) Chapter 18 and the provisions of Chapter 1 to the
extent applicable to Alabama statewide trade associations may
be cited as the Alabama Statewide Trade Association Law.	"
"§10A-1-2.11
Except as otherwise provided by this title, and whether
or not expressly stated in its governing documents, a domestic
entity has the same powers as an individual to take action
necessary or convenient to carry out its business and affairs.
Except as otherwise provided by this title or the governing
documents of the entity, the powers of a domestic entity
include the power to:
(1) sue, be sued, complain and defend suit in its
entity name;
(2) have and alter a seal and use the seal or a
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(2) have and alter a seal and use the seal or a
facsimile of it by impressing, affixing, or reproducing it;
(3) purchase, lease, or otherwise acquire, receive,
own, hold, improve, use, and deal in and with property or an
interest in property;
(4) sell, convey, mortgage, pledge, lease, exchange,
and otherwise dispose of property;
(5) make contracts and guaranties;
(6) incur liabilities, borrow money, issue notes,
bonds, and other obligations which may be convertible into or
include the option to purchase other securities or ownership
interests in the entity, and secure any obligations, or the
obligations of others for whom it can make guarantees, whether
or not a guarantee is made, by mortgaging or pledging its
property, franchises, or income;
(7) lend money, invest its funds, and receive and hold
property as security for repayment;
(8) acquire its own bonds, debentures, or other
evidences of indebtedness or obligations;
(9) acquire its own ownership interests, regardless of
whether redeemable, and hold the ownership interests as
treasury ownership interests or cancel or dispose of the
ownership interests;
(10) be a promoter, organizer, owner, partner, member,
associate, or manager of an organization;
(11) acquire, receive, own, hold, vote, use, pledge,
and dispose of ownership interests in or securities issued by
another person;
(12) conduct its business, locate its offices, and
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(12) conduct its business, locate its offices, and
exercise the powers granted by this title to further its
purposes, in or out of this state;
(13) lend money to, and otherwise assist, its
managerial officials, owners, members, or employees as
necessary or appropriate, provided, however, a nonprofit
entity shall not have the power to lend money to its officers
or directors;
(14) elect or appoint governing persons, officers, and
agents of the entity, establish the length of their terms,
define their duties, and fix their compensation;
(15) pay pensions and establish pension plans, pension
trusts, profit sharing plans, share bonus plans, and incentive
plans for managerial officials, owners, members, or employees
or former managerial officials, owners, members, or employees;
(16) indemnify and maintain liability insurance for
managerial officials, owners, members, employees, and agents
of the entity or the entity's affiliate;
(17) adopt and amend governing documents for managing
the affairs of the entity subject to applicable law;
(18) make donations for the public welfare or for
charitable, scientific, or educational purposes;
(19) voluntarily wind up its business and activities
and terminate its existence;
(20) transact business or take action that will aid
governmental policy; and
(21) make payments or donations, or do any other act,
not inconsistent with law, that furthers the business and
affairs of the entity; and
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affairs of the entity; and
(21)(22) take other action necessary or appropriate to
further the purposes of the entity."
"§10A-1-3.08
(a) Filing instruments that (i) were required or
permitted to be delivered for filing to a filing officer other
than the Secretary of State prior to January 1, 2021, (ii)
were delivered for filing to a filing officer other than the
Secretary of State prior to January 1, 2021, (iii) were
accepted by that filing officer and filed by that filing
officer prior to January 1, 2021, and (iv) would, if they were
delivered for filing on or after January 1, 2021, be required
or permitted to be delivered to the Secretary of State for
filing shall:
(1) remain in full force and effect until amended,
restated, revoked, or otherwise altered by a filing instrument
filed with the Secretary of State for that purpose; and
(2) not be affected as to their validity on or after
January 1, 2021, solely by reason of the change of location of
filings for similar filing instruments on or after January 1,
2021, to the office of the Secretary of State.
(b) A filing entity that has one or more filing
instruments that are described in clauses (i) through (iv) of
subsection (a) and that are not in the records of the
Secretary of State, may, but is not required to, deliver to
the Secretary of State for filing on or after January 1, 2021,
a certificate of information listing and attaching certified
copies of all of the above-described filing instruments of
that entity. The certificate of information shall include the
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that entity. The certificate of information shall include the
following information:
(1) the name of the entity;
(2) the type of entity;
(3) the date of formation of the entity;
(4) the unique identifying number or other designation
assigned by the Secretary of State, if any;
(5) a list of all of the filing instruments known to
the entity that are described in clauses (i) through (iv) of
subsection (a) that are not in the records of the Secretary of
State, which list must include the title of each filing
instrument, the date of the filing of each filing instrument,
and the filing officer with whom each filing instrument was
delivered for filing;
(6) an attached certified copy of the certificate of
formation then in effect if not in the records of the
Secretary of State; and
(7) an attached certified copy of any other filing
instruments of that entity then in effect that are not in the
records of the Secretary of State that the entity determines
to have in the records of the Secretary of State. "
"§10A-1-5.08
(a) The name of a domestic professional corporation or
of a foreign professional corporation registered to transact
business in this state must contain the words "professional
corporation" or the abbreviation "P.C." or "PC" and shall
otherwise conform to any rule promulgated by a licensing
authority having jurisdiction of a professional service
described in the certificate of formation of the professional
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described in the certificate of formation of the professional
corporation.
(b) The name of a professional entity must be
consistent with a statute or regulation that governs a person
that provides a professional service through the professional
entity, including a rule of professional ethics. "
"§10A-1-5.09
The name of a professional entity must be consistent
with a statute or regulation that governs a person that
provides a professional service through the professional
entity, including a rule of professional ethics. (a) The name
of a general partnership that has filed a statement of
partnership in accordance with Section 10A-8A-2.02 must
include the words "general partnership" or the abbreviation
"G.P." or "GP."
(b) The name of a general partnership that has filed a
statement of not for profit partnership in accordance with
Section 10A-8A-2.02 must include the words "not for profit
general partnership" or the abbreviation "N.G.P." or "NGP."	"
"§10A-1-5.10
(a) The name of a general partnership that has filed a
statement of partnership in accordance with Section
10A-8A-2.02 must include the words "general partnership" or
the abbreviation "G.P." or "GP."
(b) The name of a general partnership that has filed a
statement of not for profit partnership in accordance with
Section 10A-8A-2.02 must include the words "not for profit
general partnership" or the abbreviation "N.G.P." or "NGP."
(a)(i) All filing entities and (ii) all general
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(a)(i) All filing entities and (ii) all general
partnerships that are filing a statement of partnership, a
statement of not for profit general partnership, or a
statement of limited liability partnership, must reserve a
name with the Secretary of State in accordance with this
Article 5.
(b) When a filing entity delivers its certificate of
formation or certificate of incorporation, as applicable, to
the Secretary of State for filing, that filing entity must
attach its name reservation certificate to its certificate of
formation or the certificate of incorporation, as applicable;
provided, that the name reservation certificate shall not be
part of the certificate of formation or certificate of
incorporation, as applicable.
(c) When a general partnership delivers its statement
of partnership, statement of not for profit general
partnership, or statement of limited liability partnership, as
applicable, to the Secretary of State for filing, that general
partnership must attach its name reservation certificate to
its statement of partnership, statement of not for profit
general partnership, or statement of limited liability
partnership, as applicable; provided, that the name
reservation certificate shall not be part of the statement of
partnership, the statement of not for profit general
partnership, or the statement of limited liability
partnership, as applicable. "
"§10A-1-5.32
(a) An entity required to maintain a registered office
and registered agent under Section 10A-1-5.31 may change its
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and registered agent under Section 10A-1-5.31 may change its
registered office, its registered agent, or both, by
delivering to the Secretary of State for filing a statement of
the change in accordance with the procedures in Article 4.
(b) The statement of change must contain:
(1) the name of the entity;
(2) the unique identifying number or other designation
assigned by the Secretary of State;
(2)(3) the name of the entity's registered agent;
(3)(4) the street address of the entity's registered
agent;
(4)(5) if the change relates to the registered agent,
the name of the entity's new registered agent and the new
registered agent's written consent to the appointment, either
on the statement or attached to it;
(5)(6) if the change relates to the registered office,
the street address of the entity's new registered office;
(6)(7) a recitation that the change specified in the
statement is authorized by the entity; and
(7)(8) a recitation that the street address of the
registered office and the street address of the registered
agent's business are the same.
(c) On acceptance of the statement by the Secretary of
State, the statement is:
(1) in the case of a domestic filing entity, effective
to change the designation of the entity's registered agent or
registered office, or both, without the necessity of amending
the entity's certificate of formation;
(2) in the case of a general partnership with an
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(2) in the case of a general partnership with an
effective statement of partnership, statement of not for
profit partnership, or statement of limited liability
partnership on file with the Secretary of State under Chapter
8A, effective to change its registered agent or registered
office, or both, without the necessity of amending its
statement of partnership, statement of not for profit
partnership, or statement of limited liability partnership
under Chapter 8A;
(3) in the case of a foreign filing entity other than a
foreign limited liability partnership, effective to change the
designation of the entity's registered agent or registered
office, or both, and effective as an amendment of its
application for registration as a foreign entity under Article
7; or
(4) in the case of a foreign limited liability
partnership, effective to change the designation of its
registered agent or registered office, or both, without the
necessity of amending its statement of foreign limited
liability partnership under Article 7."
"§10A-1-5.33
(a) The registered agent of any entity required by
Section 10A-1-5.31 to designate and maintain a registered
agent or registered office may give notice of a change of its
name, or a change of its street address as the street address
of the entity's registered office, or both, by delivering a
statement of change containing the information required by
this section to the Secretary of State for filing a statement
of the change in accordance with the procedures in Article 4.
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of the change in accordance with the procedures in Article 4.
(b) The statement of change must be signed by the
registered agent, or a person authorized to sign the statement
on behalf of the registered agent, and must contain include:
(1) the name of the entity represented by the
registered agent;
(2) the unique identifying number of the entity
assigned by the Secretary of State;
(2)(3) the name of the entity's registered agent and
the street address at which the registered agent maintained
the entity's registered office;
(3)(4) if the change relates to the name of the
registered agent, the new name of that agent;
(4)(5) if the change relates to the street address of
the registered office, the new street address of that the
registered office; and
(5)(6) a recitation that written notice of the change
was given to the entity by the registered agent at least 10
days before the date the statement of change is filed
delivered to the Secretary of State for filing .
(c) On acceptance of the statement of change by the
Secretary of State, the statement of change is:
(1) in the case of a domestic filing entity, effective
to make the change or changes set forth in the statement of
change without the necessity of amending the entity's
certificate of formation;
(2) in the case of a general partnership with an
effective statement of partnership, statement of not for
profit partnership, or statement of limited liability
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profit partnership, or statement of limited liability
partnership on file with the Secretary of State, effective to
make the change its registered agent or registered office, or
both, or changes set forth in the statement of change without
the necessity of amending its statement of partnership,
statement of not for profit partnership, or statement of
limited liability partnership under Chapter 8A;
(3) in the case of a foreign filing entity with an
effective application for registration , effective to make the
change or changes set forth in the statement , and effective as
an amendment of of change, without the necessity of amending
its application for registration as a foreign entity under
Article 7; or
(4) in the case of a foreign limited liability
partnership with an effective statement of limited liability
partnership, effective to make the change or changes set forth
in the statement , and effective as an amendment to of change,
without the necessity of amending or restating its statement
of foreign limited liability partnership under Article 7.
(d) A registered agent may file deliver a statement of
change to the Secretary of State for filing under this section
that applies to more than one entity , and if the registered
agent does so, the registered agent must include the unique
identifying number assigned by the Secretary of State to each
entity in the statement of change ."
"§10A-1-5.34
(a) A registered agent of any entity required by
Section 10A-1-5.31 to designate and maintain a registered
agent or registered office may resign as the registered agent
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agent or registered office may resign as the registered agent
by giving written notice to that entity and delivering a
statement of resignation to the Secretary of State for filing.
(b) Notice Written notice to the entity must be given
to the entity at the address of the entity most recently known
by the agent prior to the delivery of the statement of
resignation to the Secretary of State for filing .
(c) Notice The statement of resignation shall be
delivered to the Secretary of State must be given before the
11th day after the date notice under subsection (b) is mailed
or delivered for filing and must include:
(1) the address of the entity most recently known by
the agent;
(2) a statement that written notice of the resignation
has been given to the entity; and
(3) the date on which that written notice of
resignation was given.
(d) On compliance with subsections (b) and (c), the
appointment of the registered agent terminates. The
termination is effective on the 31st day after the date the
Secretary of State receives the notice.
(1) the name of the entity;
(2) the unique identifying number of the entity
assigned by the Secretary of State;
(3) the name of the agent;
(4) that the agent resigns from serving as registered
agent for the entity; and
(5) the address of the entity to which the agent
delivered the written notice required by subsection (b).
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delivered the written notice required by subsection (b).
(d) A statement of resignation takes effect on the
earlier of:
(1) 12:01 a.m. on the 31st day after the day on which
it is delivered to the Secretary of State for filing; or
(2) the designation of a new registered agent by the
entity.
(e) When a statement of resignation takes effect, the
person that resigned ceases to have responsibility under this
title for any matter thereafter tendered to it as registered
agent for the entity. The resignation does not affect any
contractual rights the entity has against the registered agent
or that the registered agent has against the entity.
(f) A registered agent may resign with respect to an
entity regardless of whether the entity is in good standing.
(e) If(g) Upon the receipt of the statement of
resignation by the Secretary of State finds that a notice of
resignation received by the filing officer conforms to
subsections (b) and (c) , the Secretary of State shall:
(1) notify the entity of the registered agent's
resignation; and
(2) file the statement of resignation in accordance
with Article 4, except that a fee is not required to file the
statement of resignation."
"§10A-1-7.01
(a)(1) For purposes of this Article 7, the terms
register, registering, and registered include (i) a foreign
entity other than a foreign limited liability partnership
delivering to the Secretary of State for filing an application
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delivering to the Secretary of State for filing an application
for registration and the Secretary of State filing the
application for registration, and (ii) a foreign limited
liability partnership delivering to the Secretary of State for
filing a statement of foreign limited liability partnership
and the Secretary of State filing the statement of foreign
limited liability partnership.
(2) For purposes of this Article 7, the term
registration includes (i) a filed application for registration
and (ii) a filed statement of foreign limited liability
partnership.
(b) For purposes of this Article 7, the terms transact
business and transacting business shall include conducting a
business, activity, not for profit activity, and any other
activity, whether or not for profit.
(c) To transact business in this state, a foreign
entity must register under this chapter if the foreign entity:
(1) is a foreign entity, the formation of which, if
formed in this state, would require the filing under Article 3
of a certificate of formation;
(2) is a foreign limited liability partnership; or
(3) affords limited liability under the law of its
jurisdiction of formation for any owner or member.
(d) A foreign entity described by subsection (b) must
maintain the foreign entity's registration while transacting
business in this state.
(e) For purposes of this Article 7, a foreign entity
must reserve a name with the Secretary of State in accordance
with Article 5 and when a foreign entity delivers its
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with Article 5 and when a foreign entity delivers its
application for registration to the Secretary of State for
filing, that foreign entity must attach its name reservation
certificate to its application for registration. "
"§10A-1-7.04
(a)(1) A foreign entity described in Section
10A-1-7.01(c), other than a foreign limited liability
partnership, registers by delivering to the Secretary of State
for filing an application for registration in accordance with
the procedures in Article 4.
(2) A foreign limited liability partnership registers
by delivering to the Secretary of State for filing a statement
of foreign limited liability partnership in accordance with
the procedures in Article 4.
(b) The application for registration of a foreign
entity described in Section 10A-1-7.01(c) other than a foreign
limited liability partnership must state:
(1) the foreign entity's name or, if that name is not
available for use in this state or otherwise would not comply
with Article 5, a name that satisfies the requirements of
Section 10A-1-7.07 under which the foreign entity will
transact business in this state;
(2) the foreign entity's type;
(3) the foreign entity's jurisdiction of formation;
(4) the date of the foreign entity's formation;
(5) that the foreign entity exists as a valid foreign
entity of the stated type under the laws of the foreign
entity's jurisdiction of formation;
(6) the date the foreign entity began or will begin to
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(6) the date the foreign entity began or will begin to
transact business in this state;
(7) the street address and mailing address, if
different, of the principal office of the foreign entity	; and;
(8) the street address and mailing address, if
different, of the initial registered office and the name of
the initial registered agent for service of process which
Article 5 requires to be maintained at that office.
(c) The statement of foreign limited liability
partnership must state:
(1) the foreign limited liability partnership's name
or, if that name is not available for use in this state or
otherwise would not comply with Article 5, a name that
satisfies the requirements of Section 10A-1-7.07 under which
the foreign entity will transact business in this state;
(2) the jurisdiction which governs the foreign limited
liability partnership's partnership agreement and under which
it is a limited liability partnership;
(3) the date of the foreign limited liability
partnership's formation;
(4) that the foreign limited liability partnership
exists as a valid foreign limited liability partnership under
the laws of the jurisdiction which governs the foreign limited
liability partnership's partnership agreement and under which
it is a limited liability partnership;
(5) the date the foreign limited liability partnership
will begin to transact business in this state;
(6) the street address and mailing address, if
different, of the principal office of the foreign limited
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different, of the principal office of the foreign limited
liability partnership;
(7) the street address and mailing address, if
different, of the initial registered office and the name of
the initial registered agent for service of process which
Article 5 requires to be maintained at that office ;.
(d) The application for registration of a foreign
entity described in Section 10A-1-7.01(c) other than a foreign
limited liability partnership shall be executed by one or more
persons authorized to execute an application for registration.
The statement of foreign limited liability partnership shall
be executed by one or more partners authorized to execute a
statement of foreign limited liability partnership.
(e) The status of the foreign entity after registration
and the liability of its owners, managers, members, or
managerial officials shall not be adversely affected by error
or subsequent changes in the information stated in the
application for registration or statement of foreign limited
liability partnership, as applicable.
(f) The fact that an application for registration or a
statement of foreign limited liability partnership, as
applicable, is on file with the Secretary of State is notice
that the foreign entity is authorized to transact business in
this state and as notice of all facts required to be set forth
in the application for registration or the statement of
foreign limited liability partnership, as applicable.
(g) A foreign entity may register regardless of any
differences between the law of the foreign entity's
jurisdiction and of this state applicable to the governing of
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jurisdiction and of this state applicable to the governing of
the internal affairs or to the liability of an owner, member,
or managerial official. Notwithstanding the foregoing, no
foreign entity may carry on in this state any business of a
character that may not lawfully be carried on by a domestic
entity of the same type.
(h) A statement of foreign limited liability
partnership is a filing instrument."
"§10A-1-8.01
A conversion of an entity may be accomplished as
provided in this section:
(a) The plan of conversion must be in writing, and:
(1) must include the following:
(A) the name, type of entity, and mailing address of
the principal office of the converting entity, and its unique
identifying number or other designation as assigned by the
Secretary of State, if any, before conversion;
(B) the name, type of entity, and mailing address of
the principal office of the converted entity after conversion;
(C) the terms and conditions of the conversion,
including the manner and basis for converting interests in the
converting entity into any combination of money, interests in
the converted entity, and other consideration allowed in
subsection (b); and
(D) the organizational documents of the converted
entity; and
(2) may include other provisions relating to the
conversion not prohibited by law .; and
(3) at the time of the approval of the plan of
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(3) at the time of the approval of the plan of
conversion in accordance with subsection (c), the plan of
conversion is not required to contain or have attached thereto
any disclosure letter, disclosure schedules, or similar
documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion.
(b) In connection with a conversion, rights or
securities of or interests in a converting entity may be
exchanged for or converted into cash, property, or rights or
securities of or interests in the converted entity, or, in
addition to or in lieu thereof, may be exchanged for or
converted into cash, property, or rights or securities of or
interests in another entity, or may be cancelled.
(c) The plan of conversion of an entity must be
approved as follows:
(1) CORPORATIONS.
(A) If a corporation is governed by Chapter 2A and that
corporation is a converting entity, the plan of conversion
under subsection (a) must be approved in accordance with
Article 9 of Chapter 2A. If the conversion is a corporate
action as described in Section 10A-2A-13.02, then the rights,
obligations, and procedures under Article 13 of Chapter 2A
shall be applicable to that conversion.
(B) If a corporation is governed by Chapter 3A and that
corporation is a converting entity, the plan of conversion
under subsection (a) must be approved in accordance with
Article 13 of Chapter 3A.
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Article 13 of Chapter 3A.
(C) If a corporation is not governed by Chapter 2A or
Chapter 3A and that corporation is a converting entity, the
plan of conversion under subsection (a) must be approved in
accordance with the law of the jurisdiction of formation of
that corporation.
(2) LIMITED PARTNERSHIPS, INCLUDING LIMITED LIABILITY
LIMITED PARTNERSHIPS. If a limited partnership is a converting
entity, the plan of conversion under subsection (a) must be
approved in accordance with Article 10 of Chapter 9A.
(3) LIMITED LIABILITY COMPANIES. If a limited liability
company is a converting entity, the plan of conversion under
subsection (a) must be approved in accordance with Article 10
of Chapter 5A.
(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY
PARTNERSHIPS. If a general partnership is a converting entity,
the plan of conversion under subsection (a) must be approved
in accordance with Article 9 of Chapter 8A. If a general
partnership is the converting entity and that general
partnership does not have an effective statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership on file with the
Secretary of State, then that general partnership must, before
proceeding with a conversion deliver to the Secretary of State
for filing, a statement of partnership, statement of not for
profit partnership, or statement of limited liability
partnership simultaneously with the delivery to the Secretary
of State for filing, of a statement of conversion.
(5) REAL ESTATE INVESTMENT TRUST. The terms and
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(5) REAL ESTATE INVESTMENT TRUST. The terms and
conditions of the plan of conversion under subsection (a) of a
real estate investment trust must be approved by all of the
trust's shareholders or as otherwise provided in the trust's
declaration of trust; but in no case may the vote required for
shareholder approval be set at less than a majority of all the
votes entitled to be cast. No conversion of a real estate
investment trust to a general or limited partnership may be
effected without the consent in writing of each shareholder
who will have personal liability with respect to the converted
entity, notwithstanding any provision in the declaration of
trust of the converting real estate investment trust providing
for less than unanimous shareholder approval for the
conversion.
(6) OTHER ENTITY. In the case of an entity not
specified in subdivisions (1) through (5), a plan of
conversion under subsection (a) must be approved in writing by
all owners of that entity or, if the entity has no owners,
then by all members of the governing authority of that entity.
(d) After the plan of conversion is approved pursuant
to subsection (c):
(1) if the converting entity is a filing entity, the
converting entity shall deliver to the Secretary of State for
filing, a statement of conversion, which must include:
(A) the name, type of entity, and mailing address of
the principal office of the converting entity, and its unique
identifying number or other designation as assigned by the
Secretary of State, if any, before conversion;
(B) a statement that the converting entity has been
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(B) a statement that the converting entity has been
converted into the converted entity;
(C) the name and type of entity of the converted entity
and the jurisdiction of its governing statute;
(D) the street and mailing address of the principal
office of the converted entity;
(E) the date the conversion is effective under the
governing statute of the converted entity;
(F) a statement that the conversion was approved as
required by this chapter;
(G) a statement that the conversion was approved as
required by the governing statute of the converted entity;
(H) a statement that a copy of the plan of conversion
will be furnished by the converted entity, on request and
without cost, to any owner of the converted or converting
entity; and
(I) if the converted entity is a foreign entity not
authorized to conduct activities and affairs in this state,
the street and mailing address of an office for the purposes
of Section 10A-1-8.04(b); and
(2) if the converted entity is (I) a filing entity, the
converting entity shall deliver to the Secretary of State for
filing a certificate of formation or (II) a general
partnership, the converting entity shall deliver to the
Secretary of State for filing a statement of partnership, a
statement of not for profit partnership, or a statement of
limited liability partnership, as applicable, which
certificate of formation or statement of partnership,
statement of not for profit partnership, or statement of
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statement of not for profit partnership, or statement of
limited liability partnership, as applicable, must include, in
addition to the information required in the chapter governing
the certificate of formation of the converted entity, the
following:
(A) The name, mailing address of the principal office
of, type of entity, and the jurisdiction of the governing
statute of the converting entity and its unique identifying
number or other designation as assigned by the Secretary of
State, if any, before conversion;
(B) A statement that the converting entity has been
converted into the converted entity;
(C) The filing office where the certificate of
formation, if any, of the converting entity is filed and the
date of the filing thereof;
(D) If the converted entity is one in which one or more
owners lack limited liability protection, a statement that
each owner of the converting entity who is to become an owner
without limited liability protection of the converted entity
has consented in writing to the conversion as required by this
section; and
(E) A statement that the conversion was approved
pursuant to this section and, if the converting entity is a
foreign entity, that the conversion was approved as required
by the governing statute of such foreign entity;
(3) if the converting entity is required pursuant to
subdivisions (1) and (2) to deliver to the Secretary of State
for filing both (I) a statement of conversion and (II)(A) a
certificate of formation , or (B) a statement of partnership,
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certificate of formation , or (B) a statement of partnership,
statement of not for profit partnership, or statement of
limited liability partnership, as applicable, then the
converting entity shall deliver the statement of conversion
and the certificate of formation or the statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership, as applicable, to
the Secretary of State simultaneously; and
(4) if the converting entity is a general partnership
and that partnership does not have an effective statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership on file with the
Secretary of State, then the converting entity must deliver to
the Secretary of State for filing, a statement of partnership,
statement of not for profit partnership, or statement of
limited liability partnership simultaneously with the delivery
to the Secretary of State for filing, of a statement of
conversion.
(e) After a plan of conversion is approved and before
the conversion takes effect, the plan may be amended or
abandoned as provided in the plan, or if the plan does not
provide for amendment or abandonment, in the same manner as
required for the approval of the plan of conversion
originally.
(f) A conversion becomes effective:
(1) if the converted entity is a filing entity, the
effective date determined in accordance with Article 4 of this
chapter; and
(2) if the converted entity is not a domestic filing
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(2) if the converted entity is not a domestic filing
entity, as provided by the governing statute of the converted
entity.
(g) When a conversion becomes effective:
(1) all property and contract rights owned by the
converting entity remain vested in the converted entity
without transfer, reversion, or impairment, and the title to
any property vested by deed or otherwise in the converting
entity shall not revert or be in any way impaired by reason of
the conversion;
(2) all debts, obligations, or other liabilities of the
converting entity continue as debts, obligations, or other
liabilities of the converted entity and neither the rights of
creditors nor the liens upon the property of the converting
entity shall be impaired by the conversion;
(3) an action or proceeding pending by or against the
converting entity continues as if the conversion had not
occurred and the name of the converted entity may, but need
not, be substituted for the name of the converting entity in
any pending action or proceeding;
(4) except as prohibited by law other than this
chapter, all of the rights, privileges, immunities, powers,
and purposes of the converting entity remain vested in the
converted entity;
(5) except as otherwise provided in the statement of
conversion, the terms and conditions of the statement of
conversion take effect;
(6) except as otherwise agreed, for all purposes of the
laws of this state, the converting entity shall not be
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laws of this state, the converting entity shall not be
required to wind up its affairs or pay its liabilities and
distribute its assets, and the conversion shall not be deemed
to constitute a dissolution of the converting entity;
(7) for all purposes of the laws of this state, the
rights, privileges, powers, interests in property, debts,
liabilities, and duties of the converting entity, shall be the
rights, privileges, powers, interests in property, debts,
liabilities, and duties of the converted entity, and shall not
be deemed as a consequence of the conversion, to have been
transferred to the converted entity;
(8) if the converted entity is a domestic entity, for
all purposes of the laws of this state, the converted entity
shall be deemed to be the same entity as the converting
entity, and the conversion shall constitute a continuation of
the existence of the converting entity in the form of the
converted entity;
(9) if the converting entity is a domestic entity, the
existence of the converted entity shall be deemed to have
commenced on the date the converting entity commenced its
existence in the jurisdiction in which the converting entity
was first created, formed, organized, incorporated, or
otherwise came into being;
(10) the conversion shall not affect the choice of law
applicable to matters arising prior to conversion;
(11) if the Secretary of State has assigned a unique
identifying number or other designation to the converting
entity and (i) the converted entity is formed pursuant to the
laws of this state, or (ii) the converted entity is, within 30
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laws of this state, or (ii) the converted entity is, within 30
days after the effective date of the conversion, registered to
transact business in this state, then that unique identifying
number or other designation shall continue to be assigned to
the converted entity; and
(12)(A) An owner with limited liability protection
remains liable, if at all, for an obligation incurred by the
converting entity before the conversion takes effect only to
the extent, if any, the owner would have been liable if the
conversion had not occurred.
(B) An owner with limited liability protection who
becomes an owner without limited liability protection is
liable for an obligation of the converted entity incurred
after conversion to the extent provided for by the laws
applicable to the converted entity.
(13) An owner without limited liability protection who
as a result of a conversion becomes an owner of a converted
entity with limited liability protection remains liable for an
obligation incurred by the converting entity before the
conversion takes effect only to the extent, if any, the owner
would have been liable if the conversion had not occurred.
(h) If:
(1) the converting entity is a filing entity, a general
partnership with an effective statement of partnership,
statement of not for profit partnership, or statement of
limited liability partnership on file with the Secretary of
State, a foreign filing entity registered to transact business
or not for profit activity in this state, or a qualified
foreign limited liability partnership;
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foreign limited liability partnership;
(2) the converted entity will be a filing entity, a
general partnership with an effective statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership on file with the
Secretary of State, a foreign filing entity registered to
transact business or not for profit activity in this state, or
a qualified foreign limited liability partnership;
(3) the name of the converting entity and the converted
entity are to be the same, other than words, phrases, or
abbreviations indicating the type of entity; and
(4) the name of the converted entity complies with
Division A of Article 5 or Section 10A-1-7.07, as the case may
be;
then, notwithstanding Division B of Article 5, no name
reservation shall be required and the converted entity shall
for all purposes of this title be entitled to utilize the name
of the converting entity without any further action by the
converting entity or the converted entity.
(i) A certified copy of the statement of conversion may
be delivered to the office of the judge of probate in any
county in which the converting entity owned real property, to
be recorded without payment and without collection by the
judge of probate of any deed or other transfer tax or fee. The
judge of probate shall, however, be entitled to collect a
filing fee of five dollars ($5). Any filing shall evidence
chain of title, but lack of filing shall not affect the
converted entity's title to the real property."
"§10A-1-8.02
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"§10A-1-8.02
A merger of two or more entities, whether the other
entity or entities are the same or another form of entity, may
be accomplished as provided in this section.
(a) The plan of merger must be in writing, and:
(1) must include the following:
(A) the name, type of entity, and mailing address of
the principal office of each entity that is a party to the
merger, the jurisdiction of the governing statute of each
entity that is a party to the merger, and the respective
unique identifying number or other designation as assigned by
the Secretary of State, if any, of each entity that is a party
to the merger;
(B) the name, type of entity, and mailing address of
the principal office of the surviving entity and, if the
surviving entity is to be created pursuant to the merger, the
surviving entity's organizational documents;
(C) the terms and conditions of the merger, including
the manner and basis for converting the interests in each
entity that is a party to the merger into any combination of
money, interests in the surviving entity, and other
consideration as allowed by subsection (b); and
(D) if the surviving entity is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving entity's organizational documents; and
(2) with respect to all entities other than nonprofit
entities, a plan of merger may provide:
(A) that (i) any party to the plan of merger that fails
to perform its obligations under the plan of merger in
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to perform its obligations under the plan of merger in
accordance with the terms and conditions of the plan of
merger, or that otherwise fails to comply with the terms and
conditions of the plan of merger, in each case, required to be
performed or complied with prior to the time the merger
becomes effective, or that otherwise fails to consummate, or
fails to cause the consummation of, the merger (whether prior
to a specified date, upon satisfaction or, to the extent
permitted by law, waiver of all conditions to consummation set
forth in the plan of merger, or otherwise) shall be subject,
in addition to any other remedies available at law or in
equity, to the penalties or consequences as are set forth in
the plan of merger (which penalties or consequences may
include an obligation to pay to the other party or parties to
the plan of merger an amount representing, or based on the
loss of, any premium or other economic entitlement the owners
of the other party would be entitled to receive pursuant to
the terms of the plan of merger if the merger were consummated
in accordance with the terms of the plan of merger) and (ii)
if, pursuant to the terms of the plan of merger, an entity is
entitled to receive payment from another party to the plan of
merger of any amount representing a penalty or consequence (as
specified in clause (i) of this Section 10A-1-8.02(a)(2)(A)),
the entity shall be entitled to enforce the other party's
payment obligation and, upon receipt of any payment, shall be
entitled to retain the amount of the payment so received;
(B)(i) for the appointment, at or after the time at
which the plan of merger is adopted by the owners of a
domestic entity that is a party to the merger in accordance
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domestic entity that is a party to the merger in accordance
with the requirements of the statute governing that party, of
one or more persons (which may include the surviving or
resulting domestic entity or any officer, manager,
representative or agent thereof) as representative of the
owners of that domestic entity that is a party to the merger,
including those whose ownership interests shall be cancelled,
converted, or exchanged in the merger, and for the delegation
to that person or persons of the sole and exclusive authority
to take action on behalf of the owners pursuant to the plan of
merger, including taking such actions as the representative
determines to enforce (including by entering into settlements
with respect to) the rights of the owners under the plan of
merger, on the terms and subject to the conditions set forth
in the plan of merger, and (ii) that any appointment pursuant
to clause (i) of this Section 10A-1-8.02(a)(2)(B) shall be
irrevocable and binding on all owners from and after the
adoption of the plan of merger by the requisite vote of the
owners pursuant to the statute governing that entity; and
(C) that any provision adopted pursuant to Section
10A-1-8.02(a)(2)(B) may not be amended after the merger has
become effective or may be amended only with the consent or
approval of persons specified in the plan of merger;
(3) a plan of merger may include other provisions
relating to the merger not prohibited by law .; and
(4) at the time of the approval of the plan of merger
in accordance with subsection (c), the plan of merger is not
required to contain or have attached thereto any disclosure
letter, disclosure schedules, or similar documents or
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letter, disclosure schedules, or similar documents or
instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger.
(b) In connection with a merger, rights or securities
of or interests in a merged entity may be exchanged for or
converted into cash, property, or rights or securities of or
interests in the surviving entity, or, in addition to or in
lieu thereof, may be exchanged for or converted into cash,
property, or rights or securities of or interests in another
entity, or may be cancelled.
(c) The plan of merger of an entity must be approved as
follows:
(1) CORPORATIONS.
(A) If a corporation is governed by Chapter 2A and that
corporation is a party to a merger, a plan of merger under
subsection (a) must be approved in accordance with Article 11
of Chapter 2A. If the merger is a corporate action as
described in Section 10A-2A-13.02, then the rights,
obligations, and procedures under Article 13 of Chapter 2A
shall be applicable to that merger.
(B) If a nonprofit corporation is governed by Chapter
3A and that corporation is a party to a merger, a plan of
merger under subsection (a) must be approved in accordance
with Article 12 of Chapter 3A.
(C) If a corporation is not governed by Chapter 2A or
Chapter 3A and that corporation is a party to a merger, the
plan of merger under subsection (a) must be approved in
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plan of merger under subsection (a) must be approved in
accordance with the law of the jurisdiction of formation of
that corporation.
(2) LIMITED PARTNERSHIPS. In the case of a limited
partnership that is a party to the merger, a plan of merger
under subsection (a) must be approved in accordance with
Article 10 of Chapter 9A.
(3) LIMITED LIABILITY COMPANIES. In the case of a
limited liability company that is a party to the merger, a
plan of merger under subsection (a) must be approved in
accordance with Article 10 of Chapter 5A.
(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY
PARTNERSHIPS. In the case of a general partnership that is a
party to the merger, a plan of merger under subsection (a)
must be approved in accordance with Article 9 of Chapter 8A.
All general partnerships, other than a general partnership
that is created pursuant to the merger, that are parties to a
merger must have on file with the Secretary of State a
statement of partnership, statement of not for profit
partnership, or statement of limited liability partnership
prior to delivering the statement of merger to the Secretary
of State for filing.
(5) REAL ESTATE INVESTMENT TRUST. In the case of a real
estate investment trust that is a party to the merger, a plan
of merger under subsection (a) must be approved in writing by
all of the trust's shareholders or as otherwise provided in
the trust's declaration of trust, but in no case may the vote
required for shareholder approval be set at less than a
majority of all the votes entitled to be cast. No merger of a
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majority of all the votes entitled to be cast. No merger of a
real estate investment trust with a general or limited
partnership that is to be the surviving entity may be effected
without the consent in writing of each shareholder who will
have personal liability with respect to the surviving entity,
notwithstanding any provision in the declaration of trust of
the converting real estate investment trust providing for less
than unanimous shareholder approval for the merger.
(6) OTHER ENTITY. In the case of an entity not
specified in paragraphs (1) through (5) above, a plan of
merger under subsection (a) must be approved in writing by all
owners of that entity or, if the entity has no owners, then by
all members of the governing authority of that entity.
(d) After each entity has approved the plan of merger
pursuant to subsection (c), the entities must deliver to the
Secretary of State for filing a statement of merger signed on
behalf of each entity as provided by its governing statute
which must include:
(1) the name, type of entity, and mailing address of
the principal office of each entity that is a party to the
merger, the jurisdiction of the governing statute of each
entity that is a party to the merger, and the respective
unique identifying number or other designation as assigned by
the Secretary of State, if any, of each entity that is a party
to the merger;
(2) the name, type of entity, and mailing address of
the principal office of the surviving entity, the unique
identifying number or other designation as assigned by the
Secretary of State, if any, of the surviving entity, the
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Secretary of State, if any, of the surviving entity, the
jurisdiction of the governing statute of the surviving entity,
and, if the surviving entity is created pursuant to the
merger, a statement to that effect;
(3) for each general partnership, the date of the
filing of the statement of partnership, statement of not for
profit partnership, or statement of limited liability
partnership, if any, and all prior amendments and the filing
office or offices, if any, where such is filed;
(4) the date the merger is effective under the
governing statute of the surviving entity;
(5) if the surviving entity is to be created pursuant
to the merger, (i) if it will be a filing entity, its
certificate of formation; or (ii) if it will be a non-filing
entity, any document that creates the entity that is required
to be in a public writing or in the case of a general
partnership, its statement of partnership, statement of not
for profit partnership, or statement of limited liability
partnership, as applicable;
(6) if the surviving entity is a domestic entity that
exists before the merger, any amendments provided for in the
plan of merger for the organizational documents that created
the domestic entity that are required to be in a public
writing, or in the case of a general partnership, its
statement of partnership, statement of not for profit
partnership, or statement of limited liability partnership, as
applicable;
(7) a statement as to each entity that the merger was
approved as required by the entity's governing statute;
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approved as required by the entity's governing statute;
(8) a statement that a copy of the plan of merger will
be furnished by the surviving entity, on request and without
cost, to any owner of any entity which is a party to the
merger;
(9) if the surviving entity is a foreign entity not
authorized to conduct activities and affairs in this state,
the street and mailing address of an office for the purposes
of Section 10A-1-8.04; and
(10) any additional information required by the
governing statute of any entity that is a party to the merger.
(e) Prior to the statement of merger being delivered
for filing to the Secretary of State in accordance with
subsection (d), all parties to the merger that are general
partnerships, other than a general partnership that is created
pursuant to the merger, must have on file with the Secretary
of State a statement of partnership, statement of not for
profit partnership, or statement of limited liability
partnership.
(f) After a plan of merger is approved and before the
merger takes effect, the plan may be amended or abandoned as
provided in the plan, or if the plan does not provide for
amendment or abandonment, in the same manner as required for
the approval of the plan of merger originally.
(g) If all of the entities that are parties to the
merger are domestic entities, the merger becomes effective on
the effective date determined in accordance with Article 4. If
one or more parties to the merger is a foreign entity, or a
foreign entity created by the merger is the surviving entity,
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foreign entity created by the merger is the surviving entity,
the merger shall become effective at the later of:
(1) when all documents required to be filed in foreign
jurisdictions to effect the merger have become effective, or
(2) the effective date determined in accordance with
Article 4.
(h) When a merger becomes effective:
(1) the surviving entity continues or, in the case of a
surviving entity created pursuant to the merger, comes into
existence;
(2) each entity that merges into the surviving entity
ceases to exist as a separate entity;
(3) except as provided in the plan of merger, all
property owned by, and every contract right possessed by, each
merging entity that ceases to exist vests in the surviving
entity without transfer, reversion, or impairment and the
title to any property and contract rights vested by deed or
otherwise in the surviving entity shall not revert, be in any
way impaired, or be deemed to be a transfer by reason of the
merger;
(4) all debts, obligations, and other liabilities of
each merging entity, other than the surviving entity, are
debts, obligations, and liabilities of the surviving entity,
and neither the rights of creditors, nor any liens upon the
property of any entity that is a party to the merger, shall be
impaired by the merger;
(5) an action or proceeding, pending by or against any
merging entity that ceases to exist continues as if the merger
had not occurred and the name of the surviving entity may, but
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had not occurred and the name of the surviving entity may, but
need not be substituted in any pending proceeding for the name
of any merging entity whose separate existence ceased in the
merger;
(6) except as prohibited by law other than this chapter
or as provided in the plan of merger, all the rights,
privileges, franchises, immunities, powers, and purposes of
each merging entity, other than the surviving entity, vest in
the surviving entity;
(7) except as otherwise provided in the plan of merger,
the terms and conditions of the plan of merger take effect;
(8) except as otherwise agreed, if a merged entity
ceases to exist, the merger does not dissolve the merged
entity;
(9) if the surviving entity is created pursuant to the
merger:
(A) if it is a general partnership, the statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership becomes effective;
or
(B) if it is an entity other than a partnership, the
organizational documents that create the entity become
effective;
(10) the interests in a merging entity that are to be
converted in accordance with the terms of the merger into
interests, obligations, rights to acquire interests, cash,
other property, or any combination of the foregoing, are
converted as provided in the plan of merger, and the former
holders of interests are entitled only to the rights provided
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holders of interests are entitled only to the rights provided
to them by those terms or to any appraisal or dissenters'
rights they may have under the governing statute governing the
merging entity;
(11) if the surviving entity exists before the merger:
(A) except as provided in the plan of merger, all the
property and contract rights of the surviving entity remain
its property and contract rights without transfer, reversion,
or impairment;
(B) the surviving entity remains subject to all its
debts, obligations, and other liabilities; and
(C) except as provided by law other than this chapter
or the plan of merger, the surviving entity continues to hold
all of its rights, privileges, franchises, immunities, powers,
and purposes.
(12) Service of process in an action or proceeding
against a surviving foreign entity to enforce an obligation of
a domestic entity that is a party to a merger may be made by
registered mail addressed to the surviving entity at the
address set forth in the statement of merger or by any method
provided by the Alabama Rules of Civil Procedure. Any notice
or demand required or permitted by law to be served on a
domestic entity may be served on the surviving foreign entity
by registered mail addressed to the surviving entity at the
address set forth in the statement of merger or in any other
manner similar to the procedure provided by the Alabama Rules
of Civil Procedure for the service of process.
(13)(A) An owner of an entity with limited liability
protection remains liable, if at all, for an obligation
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protection remains liable, if at all, for an obligation
incurred prior to the merger by an entity that ceases to exist
as a result of the merger only to the extent, if any, that the
owner would have been liable under the laws applicable to
owners of the form of entity that ceased to exist if the
merger had not occurred.
(B) An owner with limited liability protection who, as
a result of the merger, becomes an owner without limited
liability protection of the surviving entity is liable for an
obligation of the surviving entity incurred after merger to
the extent provided for by the laws applicable to the
surviving entity.
(14) An owner without limited liability protection of
an entity that ceases to exist as a result of a merger and who
as a result of the merger becomes an owner of a surviving
entity with limited liability protection remains liable for an
obligation of the entity that ceases to exist incurred before
the merger takes effect only to the extent, if any, that the
owner would have been liable if the merger had not occurred.
(i) A certified copy of the statement of merger
required to be filed under this section may be filed in the
real estate records in the office of the judge of probate in
any county in which any merged entity owned real property,
without payment and without collection by the judge of probate
of any deed or other transfer tax or fee. The judge of
probate, however, shall be entitled to collect a filing fee of
five dollars ($5). Any such filing shall evidence chain of
title, but lack of filing shall not affect the surviving
entity's title to such real property.
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entity's title to such real property.
(j) Except as set forth in Section 10A-1-8.02(a)(4),
for purposes of this Section 10A-1-8.02, a plan of merger,
whether referred to as a plan of merger, an agreement of
merger, a merger agreement, a plan and agreement of merger, an
agreement and plan of merger, or otherwise, means a writing
that includes the items required or allowed to be set forth
therein and includes any agreement, instrument, or other
document referenced therein or associated therewith that sets
forth the terms and conditions of the merger. "
Section 2. Sections 10A-2A-7.40, 10A-2A-9.11,
10A-2A-11.01, 10A-2A-11.02, and 10A-2A-11.03, Code of Alabama
1975, are amended to read as follows:
"§10A-2A-7.40
In this division:
(1) COURT means the designated court, and if none, the
circuit court for the county in which the corporation's
principal office is located in this state, and if none in this
state, the circuit court for the county in which the
corporation's most recent registered office is located.
(2) DERIVATIVE ACTION means a civil suit in the right
of a corporation or, to the extent provided in Section
10A-2A-7.48, in the right of a foreign corporation , to recover
for an injury to the corporation or foreign corporation .
(3) STOCKHOLDER means a record stockholder, a
beneficial stockholder, and an unrestricted voting trust
beneficial owner."
"§10A-2A-9.11
(a) An organization other than a corporation may
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(a) An organization other than a corporation may
convert to a corporation, and a corporation may convert to an
organization other than a corporation pursuant to this
article, and a plan of conversion, if:
(1) the governing statute of the organization that is
not a corporation authorizes the conversion;
(2) the law of the jurisdiction governing the
converting organization and the converted organization does
not prohibit the conversion; and
(3) the converting organization and the converted
organization each comply with the governing statute and
organizational documents applicable to that organization in
effecting the conversion.
(b) A plan of conversion must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of the converting organization and its
unique identifying number or other designation as assigned by
the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address
of the principal office of the converted organization after
conversion;
(3) the terms and conditions of the conversion,
including the manner and basis for converting interests in the
converting organization into any combination of money,
interests in the converted organization, and other
consideration allowed in Section 10A-9A-10.02(c); and
(4) the organizational documents of the converted
organization.
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organization.
(c) In connection with a conversion, rights or
securities of or interests in the converting organization may
be exchanged for or converted into cash, property, or rights
or securities of or interests in the converted organization,
or, in addition to or in lieu thereof, may be exchanged for or
converted into cash, property, or rights or securities of or
interests in another organization or may be cancelled.
(d) In addition to the requirements of subsection (a),
a plan of conversion may contain any other provision not
prohibited by law.
(e) The terms of a plan of conversion may be made
dependent upon facts objectively ascertainable outside the
plan in accordance with Section 10A-2A-1.20(c).
(f) At the time of the approval of the plan of
conversion in accordance with this chapter, the plan of
conversion is not required to contain or have attached thereto
any disclosure letter, disclosure schedules, or similar
documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion. "
"§10A-2A-11.01
As used in this article, unless the context otherwise
requires, the following terms mean:
(1) ACQUIRED ENTITY means the corporation or foreign
corporation that will have all of one or more classes or
series of its stock acquired in a stock exchange.
(2) ACQUIRING ENTITY means the corporation or foreign
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(2) ACQUIRING ENTITY means the corporation or foreign
corporation that will acquire all of one or more classes or
series of stock of the acquired entity in a stock exchange.
(3) CONSTITUENT CORPORATION means a constituent
organization that is a corporation.
(4) CONSTITUENT ORGANIZATION means an organization that
is party to a merger under this article.
(5) GOVERNING STATUTE of an organization means the
statute that governs the organization's internal affairs.
(6) ORGANIZATION means a general partnership, including
a limited liability partnership; limited partnership,
including a limited liability limited partnership; limited
liability company; business trust; corporation; nonprofit
corporation; professional corporation; or any other person
having a governing statute. The term includes domestic and
foreign organizations whether or not organized for profit.
(7) ORGANIZATIONAL DOCUMENTS means:
(A) for a general partnership or foreign general
partnership, its partnership agreement and if applicable, its
registration as a limited liability partnership or a foreign
limited liability partnership;
(B) for a limited partnership or foreign limited
partnership, its certificate of formation and partnership
agreement, or comparable writings as provided in its governing
statute;
(C) for a limited liability company or foreign limited
liability company, its certificate of formation and limited
liability company agreement, or comparable writings as
provided in its governing statute;
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provided in its governing statute;
(D) for a business or statutory trust or foreign
business or statutory trust its agreement of trust and
declaration of trust, or comparable writings as provided in
its governing statute;
(E) for a corporation or foreign corporation, its
certificate of incorporation, bylaws, and other agreements
among its stockholders that are authorized by its governing
statute, or comparable writings as provided in its governing
statute;
(F) for a nonprofit corporation or foreign nonprofit
corporation, its certificate of incorporation, bylaws, and
other agreements that are authorized by its governing statute,
or comparable writings as provided in its governing statute;
(G) for a professional corporation or foreign
professional corporation, its certificate of incorporation,
bylaws, and other agreements among its stockholders that are
authorized by its governing statute, or comparable writings as
provided in its governing statute; and
(H) for any other organization, the basic writings that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
(8) NEW PERSONAL LIABILITY means personal liability of
a person, resulting from a merger or stock exchange, that is
(i)(A) in respect of an entity which is different from the
entity in which the person held stock or eligible interests
immediately before the merger became effective, or (B) in
respect of an entity which is different from the entity in
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respect of an entity which is different from the entity in
which the person held stock immediately before the stock
exchange became effective; or (ii) in respect of the same
entity as the one in which the person held stock or eligible
interests immediately before the merger became effective if
(A) the person did not have personal liability immediately
before the merger became effective, or (B) the person had
personal liability immediately before the merger became
effective, the terms and conditions of which were changed when
the merger became effective; or (iii) in respect of the same
entity as the one in which the person held stock immediately
before the stock exchange became effective if (A) the person
did not have personal liability immediately before the stock
exchange became effective, or (B) the person had personal
liability immediately before the stock exchange became
effective, the terms and conditions of which were changed when
the stock exchange became effective.
(9) PLAN OF MERGER. Except as set forth in Section
10A-2A-11.02(g), a plan of merger, whether referred to as a
plan of merger, an agreement of merger, a merger agreement, a
plan and agreement of merger, an agreement and plan of merger,
or otherwise, means a writing described in Section
10A-2A-11.02 and includes any agreement, instrument, or other
document referenced therein or associated therewith that sets
forth the terms and conditions of the merger.
(9)(10) SURVIVING ORGANIZATION means an organization
into which one or more other organizations are merged under
this article, whether the organization pre-existed the merger
or was created pursuant to the merger."
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or was created pursuant to the merger."
"§10A-2A-11.02
(a) A corporation may merge with one or more other
constituent organizations pursuant to this article, and a plan
of merger, if:
(1) the governing statute of each of the other
organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
(b) A plan of merger must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of each constituent organization, the
jurisdiction of the governing statute of each constituent
organization, and the respective unique identifying number or
other designation as assigned by the Secretary of State, if
any, of each constituent organization;
(2) the name, type of organization, and mailing address
of the principal office of the surviving organization, the
unique identifying number or other designation as assigned by
the Secretary of State, if any, of the surviving organization,
the jurisdiction of the governing statute of the surviving
organization, and, if the surviving organization is created
pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including
the manner and basis for converting the stock or eligible
interests in each constituent organization into any
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interests in each constituent organization into any
combination of money, stock, eligible interests in the
surviving organization, and other consideration as allowed by
subsection (c);
(4) if the surviving organization is to be created
pursuant to the merger, the surviving organization's
organizational documents; and
(5) if the surviving organization is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving organization's organizational
documents.
(c) In connection with a merger, rights, securities,
stock, or eligible interests, if any, in a constituent
organization may be exchanged for or converted into cash,
property, rights, securities, stock, or eligible interests, if
any, in the surviving organization, or, in addition to or in
lieu thereof, may be exchanged for or converted into cash,
property, rights, securities, stock, or eligible interests, if
any, in another organization, or may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of merger may :
(1) provide that (i) a constituent organization or any
other party to the plan of merger that fails to perform its
obligations under the plan of merger in accordance with the
terms and conditions of the plan of merger, or that otherwise
fails to comply with the terms and conditions of the plan of
merger, in each case, required to be performed or complied
with prior to the time the merger becomes effective, or that
otherwise fails to consummate, or fails to cause the
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otherwise fails to consummate, or fails to cause the
consummation of, the merger (whether prior to a specified
date, upon satisfaction or, to the extent permitted by law,
waiver of all conditions to consummation set forth in the plan
of merger, or otherwise) shall be subject, in addition to any
other remedies available at law or in equity, to the penalties
or consequences as are set forth in the plan of merger (which
penalties or consequences may include an obligation to pay to
the other party or parties to the plan of merger an amount
representing, or based on the loss of, any premium or other
economic entitlement the stockholders or owners, as the case
may be, of the other party would be entitled to receive
pursuant to the terms of the plan of merger if the merger were
consummated in accordance with the terms of the plan of
merger) and (ii) if, pursuant to the terms of the plan of
merger, a corporation is entitled to receive payment from
another party to the plan of merger of any amount representing
a penalty or consequence (as specified in clause (i) of this
Section 10A-2A-11.02(d)(1)), the corporation shall be entitled
to enforce the other party's payment obligation and, upon
receipt of any payment, shall be entitled to retain the amount
of the payment so received;
(2) provide (i) for the appointment, at or after the
time at which the plan of merger is adopted by the
stockholders of a constituent corporation in accordance with
the requirements of Section 10A-2A-11.04, of one or more
persons (which may include the surviving or resulting entity
or any officer, manager, representative or agent thereof) as
representative of the stockholders of a constituent
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representative of the stockholders of a constituent
corporation of this state, including those whose shares of
capital stock shall be cancelled, converted, or exchanged in
the merger, and for the delegation to that person or persons
of the sole and exclusive authority to take action on behalf
of the stockholders pursuant to the plan of merger, including
taking such actions as the representative determines to
enforce (including by entering into settlements with respect
to) the rights of the stockholders under the plan of merger,
on the terms and subject to the conditions set forth in the
plan of merger, (ii) that any appointment pursuant to clause
(i) of this Section 10A-2A-11.02(d)(2) shall be irrevocable
and binding on all stockholders from and after the adoption of
the plan of merger by the requisite vote of the stockholders
pursuant to Section 10A-2A-11.04, and (iii) that any provision
adopted pursuant to this Section 10A-2A-11.02(d)(2) may not be
amended after the merger has become effective or may be
amended only with the consent or approval of persons specified
in the plan of merger; and
(3) contain any other provision not prohibited by law.
(e) Terms of a plan of merger may be made dependent on
facts objectively ascertainable outside the plan in accordance
with Section 10A-2A-1.20(c).
(f) A plan of merger may be amended only with the
consent of each constituent organization, except as provided
in the plan. A domestic constituent organization may approve
an amendment to a plan:
(1) in the same manner as the plan was approved, if the
plan does not provide for the manner in which it may be
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plan does not provide for the manner in which it may be
amended; or
(2) in the manner provided in the plan, except that if
the plan has been approved by the stockholders, members, or
interest holders that were entitled to vote on, consent to, or
approve of, the plan, then those stockholders, members, or
interest holders are entitled to vote on, consent to, or
approve of any amendment of the plan that will change:
(i) the amount or kind of stock or other securities,
eligible interests, obligations, rights to acquire stock,
other securities or eligible interests, cash, or other
property to be received under the plan by the stockholders,
members, or interest holders of a constituent organization;
(ii) the certificate of incorporation of any
corporation, foreign corporation, nonprofit corporation,
foreign nonprofit corporation or the organizational documents
of any unincorporated entity or foreign unincorporated entity,
that will be the surviving organization, except for changes
permitted by Section 10A-2A-10.05 or by comparable provisions
of the governing statute of the foreign corporation, nonprofit
corporation, foreign nonprofit corporation, unincorporated
entity, or foreign unincorporated entity; or
(iii) any of the other terms or conditions of the plan
if the change would adversely affect the stockholders,
members, or interest holders in any material respect.
(g) At the time of the approval of the plan of merger
in accordance with this chapter, the plan of merger is not
required to contain or have attached thereto any disclosure
letter, disclosure schedules, or similar documents or
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letter, disclosure schedules, or similar documents or
instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger."
"§10A-2A-11.03
(a) By complying with this Article 11:
(1) a corporation may acquire all of the stock of one
or more classes or series of stock, of another corporation or
foreign corporation, in exchange for stock or other
securities, obligations, rights to acquire stock or other
securities, cash, other property, or any combination of the
foregoing, pursuant to a plan of stock exchange; or
(2) all of the stock of one or more classes or series
of stock of a corporation may be acquired by another
corporation or foreign corporation, in exchange for stock or
other securities, obligations, rights to acquire stock or
other securities, cash, other property, or any combination of
the foregoing, pursuant to a plan of stock exchange.
(b) A foreign corporation may be the acquired entity in
a stock exchange only if the stock exchange is permitted by
the governing statute of that foreign corporation.
(c) The plan of stock exchange must include:
(1) the name of each corporation or foreign corporation
the stock of which will be acquired, the name of the
corporation or foreign corporation that will acquire that
stock, and the respective unique identifying numbers or other
designations as assigned by the Secretary of State, if any, of
the corporation or foreign corporation;
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the corporation or foreign corporation;
(2) the terms and conditions of the stock exchange;
(3) the manner and basis of exchanging stock of a
corporation or foreign corporation, the stock of which will be
acquired under the stock exchange for stock or other
securities, obligations, rights to acquire stock, other
securities, cash, other property, or any combination of the
foregoing; and
(4) any other provisions required by the governing
statute governing the acquired entity or its certificate of
incorporation or organizational documents.
(d) Terms of a plan of stock exchange may be made
dependent on facts objectively ascertainable outside the plan
in accordance with Section 10A-2A-1.20(c).
(e) A plan of stock exchange may be amended only with
the consent of each party to the stock exchange, except as
provided in the plan. A corporation may approve an amendment
to a plan:
(1) in the same manner as the plan was approved, if the
plan does not provide for the manner in which it may be
amended; or
(2) in the manner provided in the plan, except that if
the plan has been approved by the stockholders that were
entitled to vote on, consent to, or approve of the plan then
those stockholders are entitled to vote on, consent to, or
approve of any amendment of the plan that will change:
(i) the amount or kind of stock or other securities,
obligations, rights to acquire stock, other securities, cash,
or other property to be received under the plan by the
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or other property to be received under the plan by the
stockholders of the acquired entity; or
(ii) any of the other terms or conditions of the plan
if the change would adversely affect the stockholders in any
material respect.
(f) At the time of the approval of the plan of stock
exchange in accordance with this chapter, the plan of stock
exchange is not required to contain or have attached thereto
any disclosure letter, disclosure schedules, or similar
documents or instruments contemplated by the plan of stock
exchange that modify, supplement, qualify, or make exceptions
to representations, warranties, covenants, or conditions
contained in the plan of stock exchange. "
Section 3. Sections 10A-3A-12.01, 10A-3A-12.02, and
10A-3A-13.02, Code of Alabama 1975, are amended to read as
follows:
"§10A-3A-12.01
As used in this article, unless the context otherwise
requires, the following terms mean:
(1) CONSTITUENT CORPORATION means a constituent
organization that is a nonprofit corporation.
(2) CONSTITUENT ORGANIZATION means an organization that
is party to a merger under this article.
(3) GOVERNING STATUTE of an organization means the
statute that governs the organization's internal affairs.
(4) ORGANIZATION means a general partnership, including
a limited liability partnership; limited partnership,
including a limited liability limited partnership; limited
liability company; business trust; business corporation;
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liability company; business trust; business corporation;
nonprofit corporation; professional corporation; or any other
person having a governing statute. The term includes domestic
and foreign organizations whether or not organized for profit.
(5) ORGANIZATIONAL DOCUMENTS means:
(A) for a general partnership or foreign general
partnership, its partnership agreement and if applicable, its
registration as a limited liability partnership or a foreign
limited liability partnership;
(B) for a limited partnership or foreign limited
partnership, its certificate of formation and partnership
agreement, or comparable writings as provided in its governing
statute;
(C) for a limited liability company or foreign limited
liability company, its certificate of formation and limited
liability company agreement, or comparable writings as
provided in its governing statute;
(D) for a business or statutory trust or foreign
business or statutory trust its agreement of trust and
declaration of trust, or comparable writings as provided in
its governing statute;
(E) for a business corporation or foreign business
corporation, its certificate of incorporation, bylaws, and
other agreements among its stockholders that are authorized by
its governing statute, or comparable writings as provided in
its governing statute;
(F) for a nonprofit corporation or foreign nonprofit
corporation, its certificate of incorporation, bylaws, and
other agreements that are authorized by its governing statute,
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other agreements that are authorized by its governing statute,
or comparable writings as provided in its governing statute;
(G) for a professional corporation or foreign
professional corporation, its certificate of incorporation,
bylaws, and other agreements among its stockholders that are
authorized by its governing statute, or comparable writings as
provided in its governing statute; and
(H) for any other organization, the basic writings that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
(6) PLAN OF MERGER. Except as set forth in Section
10A-3A-12.02(g), a plan of merger, whether referred to as a
plan of merger, an agreement of merger, a merger agreement, a
plan and agreement of merger, an agreement and plan of merger,
or otherwise, means a writing described in Section
10A-3A-12.02 and includes any agreement, instrument, or other
document referenced therein or associated therewith that sets
forth the terms and conditions of the merger.
(6)(7) SURVIVING ORGANIZATION means an organization
into which one or more other organizations are merged under
this article, whether the organization pre-existed the merger
or was created pursuant to the merger.
"§10A-3A-12.02
(a) A nonprofit corporation may merge with one or more
other constituent organizations pursuant to this article, and
a plan of merger, if:
(1) the governing statute of each of the other
organizations authorizes the merger;
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organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
(b) A plan of merger must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of each constituent organization, the
jurisdiction of the governing statute of each constituent
organization, and the respective unique identifying number or
other designation as assigned by the Secretary of State, if
any, of each constituent organization;
(2) the name, type of organization, and mailing address
of the principal office of the surviving organization, the
unique identifying number or other designation as assigned by
the Secretary of State, if any, of the surviving organization,
the jurisdiction of the governing statute of the surviving
organization, and, if the surviving organization is created
pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including
the manner and basis for converting the interests in each
constituent organization into any combination of money,
securities, interests in the surviving organization, and other
consideration as allowed by subsection (c);
(4) if the surviving organization is to be created
pursuant to the merger, the surviving organization's
organizational documents; and
(5) if the surviving organization is not to be created
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(5) if the surviving organization is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving organization's organizational
documents.
(c) In connection with a merger, rights, securities, or
interests, if any, in a constituent organization may be
exchanged for or converted into cash, property, rights,
securities, or interests, if any, in the surviving
organization, or, in addition to or in lieu thereof, may be
exchanged for or converted into cash, property, rights,
securities, or interests, if any, in another organization, or
may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of merger may contain any other provision not
prohibited by law.
(e) Terms of a plan of merger may be made dependent on
facts objectively ascertainable outside the plan in accordance
with Section 10A-3A-1.04(c)(5).
(f) A plan of merger may be amended only with the
consent of each constituent organization, except as provided
in the plan. A domestic constituent organization may approve
an amendment to a plan:
(1) in the same manner as the plan was approved, if the
plan does not provide for the manner in which it may be
amended; or
(2) in the manner provided in the plan, except that if
the plan has been approved by the interest holders that were
entitled to vote on, consent to, or approve of, the plan, then
those interest holders are entitled to vote on, consent to, or
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those interest holders are entitled to vote on, consent to, or
approve of any amendment of the plan that will change:
(i) the amount or kind of securities, interests,
obligations, rights to acquire other interests or securities,
cash, or other property to be received under the plan by the
interest holders of a constituent organization;
(ii) the certificate of incorporation of any nonprofit
corporation, foreign nonprofit corporation, business
corporation, or foreign business corporation, or the
organizational documents of any other organization, that will
be the surviving organization, except for changes permitted by
Section 10A-3A-9.03(g) or by comparable provisions of the
governing statute of the foreign nonprofit corporation,
business corporation, foreign business corporation, or other
organization; or
(iii) any of the other terms or conditions of the plan
if the change would adversely affect the interest holders in
any material respect.
(g) At the time of the approval of the plan of merger
in accordance with this chapter, the plan of merger is not
required to contain or have attached thereto any disclosure
letter, disclosure schedules, or similar documents or
instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger."
"§10A-3A-13.02
(a) An organization other than a nonprofit corporation
may convert to a nonprofit corporation, and a nonprofit
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may convert to a nonprofit corporation, and a nonprofit
corporation may convert to an organization other than a
nonprofit corporation pursuant to this article, and a plan of
conversion, if:
(1) the governing statute of the organization that is
not a nonprofit corporation authorizes the conversion;
(2) the law of the jurisdiction governing the
converting organization and the converted organization does
not prohibit the conversion; and
(3) the converting organization and the converted
organization each comply with the governing statute and
organizational documents applicable to that organization in
effecting the conversion.
(b) A plan of conversion must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of the converting organization and its
unique identifying number or other designation as assigned by
the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address
of the principal office of the converted organization after
conversion;
(3) the terms and conditions of the conversion,
including the manner and basis for converting interests, if
any, in the converting organization into any combination of
money, interests in the converted organization, and other
consideration allowed in subsection (c); and
(4) the organizational documents of the converted
organization.
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organization.
(c) In connection with a conversion, rights or
securities of or interests, if any, in the converting
organization may be exchanged for or converted into cash,
property, or rights or securities of or interests, if any, in
the converted organization, or, in addition to or in lieu
thereof, may be exchanged for or converted into cash,
property, rights, securities, or interests, if any, in another
organization, or may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of conversion may contain any other provision not
prohibited by law.
(e) Terms of a plan of conversion may be made dependent
on facts objectively ascertainable outside the plan in
accordance with Section 10A-3A-1.04(c).
(f) At the time of the approval of the plan of
conversion in accordance with this chapter, the plan of
conversion is not required to contain or have attached thereto
any disclosure letter, disclosure schedules, or similar
documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion. "
Section 4. Section 10A-4-3.02, as amended by Act
2024-413, 2024 Regular Session, Code of Alabama 1975, is
amended to read as follows:
"§10A-4-3.02
(a) Upon the death of a stockholder of a domestic
professional corporation, or if upon a stockholder of a
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professional corporation, or if upon a stockholder of a
domestic professional corporation becomes becoming a
disqualified person, or if upon stock of a domestic
professional corporation is being transferred by operation of
law or court decree to a disqualified person, the stock owned
by the deceased stockholder or the disqualified person may be
transferred to a qualified person and, if not so transferred,
shall be purchased or redeemed by the domestic professional
corporation to the extent of funds which may be legally made
available for the purchase as provided in this section .
(b) If the purchase price for of the stock is not fixed
by determined in accordance with the governing documents of
the domestic professional corporation or by private agreement,
the domestic professional corporation, within six months after
the death or 30 days after the disqualification or transfer,
as the case may be, shall make a written offer to pay for the
stock at a specified price deemed by the domestic professional
corporation to be the fair value thereof of the stock as of
the date of the death, disqualification, or transfer. The
offer shall be given delivered to the executor or
administrator personal representative of the estate of a the
deceased stockholder or to, the disqualified person , or the
transferee, as the case may be, and shall be accompanied by a
balance sheet of the domestic professional corporation, as of
the latest available date and not more than 12 months prior to
the making of the offer, and a profit and loss statement of
the domestic professional corporation for the 12 months'
period ended on the date of the balance sheet.
(c) If within 30 days after the date of the written
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(c) If within 30 days after the date of the written
offer from the domestic professional corporation the fair
value of the stock is agreed upon between the personal
representative of the estate of the deceased stockholder, the
disqualified person , or the transferee, as the case may be,
and the domestic professional corporation, payment therefor
shall be made within 90 days after the date of the offer , or
other period as the parties may fix by agreement, after the
date of the offer, upon surrender of the certificate or
certificates representing the stock agree. Upon payment of the
agreed value the personal representative of the estate of the
deceased member, the disqualified persons person, or the
transferee, as the case may be, shall cease to have any
interest in, or claim to, the stock.
(d) If within 30 days from the date of the written
offer from the domestic professional corporation, the fair
value of the stock is not agreed upon between the personal
representative of the estate of the deceased stockholder, the
disqualified person , or the transferee, as the case may be,
and the domestic professional corporation do not so agree
within 30 days of the delivery of the written offer , then
either party may commence a civil action in the designated
court, and if none, in the circuit court for the county in
which the domestic professional corporation's principal office
is located in this state, and if none in this state, in the
circuit court for the county in which the domestic
professional corporation's most recent registered office is
located requesting that the fair value of the stock be found
and determined. If the domestic professional corporation does
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and determined. If the domestic professional corporation does
not deliver a written offer in accordance with subsection (b),
then the personal representative of the estate of the deceased
stockholder, the disqualified person, or the transferee, as
the case may be, may commence a civil action in the designated
court, and if none, in the circuit court for the county in
which the domestic professional corporation's principal office
is located in this state, and if none in this state, in the
circuit court for the county in which the domestic
professional corporation's most recent registered office is
located requesting that the fair value of the stock be found
and determined. The personal representative of the estate of
the deceased stockholder, the disqualified person, or the
transferee, as the case may be, wherever residing, shall be
made a party to the proceeding as an action against the
disqualified that person's stock quasi in rem. Service shall
be made in accordance with the rules of civil procedure. The
personal representative of the estate of the deceased
stockholder, the disqualified person , or the transferee, as
the case may be, shall be entitled to a judgment against the
domestic professional corporation for the amount of the fair
value of the disqualified that person's stock as of the date
of death, disqualification, or transfer upon surrender to the
domestic professional corporation of the certificate or
certificates representing the stock . The court may, in its
discretion, order that the judgment be paid in installments
and with interest and on terms as the court may determine. The
court may, if it so elects, appoint one or more persons as
appraisers to receive evidence and recommend a decision on the
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appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers shall have the power
and authority as shall be specified in the order of their
appointment or an amendment thereof.
(e) The judgment shall include an allowance for
interest at the rate the court finds to be fair and equitable
in all the circumstances, from the date of death,
disqualification, or transfer.
(f) The costs and expenses of any proceeding shall be
determined by the court and shall be assessed against the
domestic professional corporation, but all or any part of the
costs and expenses may be apportioned and assessed as the
court may deem equitable against the disqualified person if
the court shall find that the action of the disqualified
person in failing to accept the offer was arbitrary or
vexatious or not in good faith. The expenses shall include
reasonable compensation for and reasonable expenses of the
appraisers and a reasonable attorney's fee but shall exclude
the fees and expenses of counsel for and of experts employed
by any party; but if the fair value of the stock as determined
materially exceeds the amount which the domestic professional
corporation offered to pay therefor, or if no offer was made,
the court in its discretion may award to the disqualified
person the sum the court determines to be reasonable
compensation to any expert or experts employed by the
disqualified person in the proceeding. (1) The court in a
proceeding commenced under subsection (d) shall determine all
court costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the
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compensation and expenses of appraisers appointed by the
court. The court shall assess the court costs against the
domestic professional corporation, except that the court may
assess court costs against the personal representative of the
estate of the deceased stockholder, the disqualified person,
or the transferee, as the case may be, in amounts which the
court finds equitable, to the extent the court finds the
personal representative of the estate of the deceased
stockholder, the disqualified person, or the transferee, as
the case may be, acted arbitrarily, vexatiously, or not in
good faith with respect to the rights provided by this
section.
(2) The court in a proceeding commenced under
subsection (d) may also assess the expenses of the respective
parties in amounts the court finds equitable:
(A) against the domestic professional corporation and
in favor of the personal representative of the estate of the
deceased stockholder, the disqualified person, or the
transferee, as the case may be, if the court finds the
domestic professional corporation did not substantially comply
with the requirements of this section; or
(B) against either the domestic professional
corporation or the personal representative of the estate of
the deceased stockholder, the disqualified person, or the
transferee, as the case may be, in favor of the other party,
if the court finds the party against whom expenses are
assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this section.
(3) For purposes of this subsection (f), expenses means
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(3) For purposes of this subsection (f), expenses means
reasonable expenses of any kind that are incurred in
connection with a proceeding brought under subsection (d).
(g) If a purchase, redemption, or transfer of the stock
of a deceased stockholder or, disqualified person , or of a
transferee who is a disqualified person is not completed
within 12 months after the death of the deceased stockholder
or 12 months after the disqualification or transfer, as the
case may be, the domestic professional corporation shall
forthwith cancel the stock on its books and the personal
representative of the estate of the deceased stockholder, the
disqualified person , or the transferee, as the case may be,
shall have no further interest as a stockholder in the
domestic professional corporation other than the disqualified
that person's right to payment for the stock under this
section.
(h)(1) A professional corporation may acquire its own
stock, and, the stock so acquired shall constitute authorized
but unissued stock, provided however:
(A) the certificate of incorporation may provide that
the acquired stock shall constitute authorized, issued, but
not outstanding stock;
(B) the certificate of incorporation may prohibit the
reissue of the acquired stock, in which case, the number of
authorized shares of stock is reduced by the number of shares
of stock acquired; or
(C) if the certificate of incorporation does not (i)
provide that the acquired stock shall constitute authorized
but unissued stock, (ii) prohibit the reissuance of the
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but unissued stock, (ii) prohibit the reissuance of the
acquired stock, or (iii) provide that the acquired stock shall
constitute authorized, issued, but not outstanding stock, then
the board of directors may determine, at or prior to the time
of the acquisition, that the acquired stock will constitute
authorized, issued, but not outstanding stock.
(2) If the board of directors determines that any
acquired stock was to be authorized, issued, but not
outstanding in accordance with subsection (h)(1)(C), then the
board of directors may thereafter determine that the acquired
stock shall be converted to stock that is authorized but not
issued.
(i) This section shall not be deemed to require the a
domestic professional corporation to purchase of the stock of
a disqualified person where the period of if the
disqualification is for less than 12 months from the date of
disqualification or transfer. A domestic professional
corporation may require the disqualified person to sell the
disqualified person's stock to the domestic professional
corporation upon any disqualification.
(j) Any provision regarding purchase, redemption, or
transfer of stock of a domestic professional corporation
contained in the certificate of incorporation, bylaws, or any
private agreement shall be specifically enforceable in the
courts of this state.
(k) Nothing herein contained in this section shall
prevent or relieve a domestic professional corporation from
paying pension benefits or other deferred compensation for
services rendered to or on behalf of a former stockholder as
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services rendered to or on behalf of a former stockholder as
otherwise permitted by law.
(l) A domestic professional corporation may purchase
its own stock from a disqualified person without regard to the
availability of capital or surplus for the purchase; however,
no purchase of or payment for the stock shall be made at a
time when the domestic professional corporation is insolvent
or when the purchase or payment would make it insolvent.
(m) The foregoing provisions of this section shall not
apply to a domestic nonprofit professional corporation. Any
member of a domestic nonprofit corporation who becomes a
disqualified person must cease being a member not more than 12
months after the date of disqualification if he or she is then
a disqualified person."
Section 5. Sections 10A-5A-1.02, 10A-5A-1.06,
10A-5A-2.02, as amended by Act 2024-413, 2024 Regular Session,
10A-5A-5.02, 10A-5A-5.04, 10A-5A-8.02, 10A-5A-10.01, and
10A-5A-10.05, Code of Alabama 1975, are amended to read as
follows:
"§10A-5A-1.02
As used in this chapter, unless the context otherwise
requires, the following terms mean:
(a) CERTIFICATE OF FORMATION, with respect to a limited
liability company, means the certificate provided for by
Section 10A-5A-2.01, and the certificate as amended or
restated.
(b) CONSTITUENT LIMITED LIABILITY COMPANY means a
constituent organization that is a limited liability company.
(c) CONSTITUENT ORGANIZATION means an organization that
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(c) CONSTITUENT ORGANIZATION means an organization that
is party to a merger under Article 10.
(d) CONVERTED ORGANIZATION means the organization into
which a converting organization converts pursuant to Article
10.
(e) CONVERTING LIMITED LIABILITY COMPANY means a
converting organization that is a limited liability company.
(f) CONVERTING ORGANIZATION means an organization that
converts into another organization pursuant to Article 10.
(g) DISQUALIFIED PERSON means any person who is not a
qualified person.
(h) DISTRIBUTION except as otherwise provided in
Section 10A-5A-4.06(e), means a transfer of money or other
property from a limited liability company, or series thereof,
to another person on account of a transferable interest.
(i) FOREIGN LIMITED LIABILITY COMPANY means a limited
liability company governed by the laws of a jurisdiction other
than this state which would be a limited liability company if
governed by the laws of this state.
(j) GOVERNING STATUTE means the statute that governs an
organization's internal affairs.
(k) LIMITED LIABILITY COMPANY, except in the phrase
"foreign limited liability company," means an entity formed or
existing under this chapter.
(l) LIMITED LIABILITY COMPANY AGREEMENT means any
agreement (whether referred to as a limited liability company
agreement, operating agreement or otherwise), written, oral or
implied, of the member or members as to the activities and
affairs of a limited liability company or series thereof. The
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affairs of a limited liability company or series thereof. The
limited liability company agreement of a limited liability
company having only one member shall not be unenforceable by
reason of there being only one person who is a party to the
limited liability company agreement. The limited liability
company agreement includes any amendments to the limited
liability company agreement.
(m) MEMBER means a person admitted under Section
10A-5A-4.01 and not dissociated under Section 10A-5A-6.02.
(n) ORGANIZATION means a general partnership, including
a limited liability partnership; limited partnership,
including a limited liability limited partnership; limited
liability company; business trust; corporation; nonprofit
corporation; professional corporation; or any other person
having a governing statute. The term includes domestic and
foreign organizations whether or not organized for profit.
(o) ORGANIZATIONAL DOCUMENTS means:
(1) for a general partnership or foreign general
partnership, its partnership agreement and if applicable, its
registration as a limited liability partnership or a foreign
limited liability partnership;
(2) for a limited partnership or foreign limited
partnership, its certificate of formation and partnership
agreement, or comparable writings as provided in its governing
statute;
(3) for a limited liability company or foreign limited
liability company, its certificate of formation and limited
liability company agreement, or comparable writings as
provided in its governing statute;
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provided in its governing statute;
(4) for a business or statutory trust or foreign
business or statutory trust its agreement of trust and
declaration of trust, or comparable writings as provided in
its governing statute;
(5) for a corporation for profit or foreign corporation
for profit, its certificate of formation, bylaws, and other
agreements among its shareholders that are authorized by its
governing statute, or comparable writings as provided in its
governing statute;
(6) for a nonprofit corporation or foreign nonprofit
corporation, its certificate of formation, bylaws, and other
agreements that are authorized by its governing statute, or
comparable writings as provided in its governing statute;
(7) for a professional corporation or foreign
professional corporation, its certificate of formation,
bylaws, and other agreements among its shareholders that are
authorized by its governing statute, or comparable writings as
provided in its governing statute; and
(8) for any other organization, the basic writings that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
(p) PLAN OF MERGER. Except as set forth in Section
10A-5A-10.05(e), a plan of merger, whether referred to as a
plan of merger, an agreement of merger, a merger agreement, a
plan and agreement of merger, an agreement and plan of merger,
or otherwise, means a writing described in Section
10A-5A-10.05 and includes any agreement, instrument, or other
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10A-5A-10.05 and includes any agreement, instrument, or other
document referenced therein or associated therewith that sets
forth the terms and conditions of the merger.
(p)(q) QUALIFIED PERSON, with respect to a limited
liability company rendering professional services in this
state, means a person authorized by this state or a regulatory
authority of this state to own a transferable interest in that
limited liability company.
(q)(r) SURVIVING ORGANIZATION means an organization
into which one or more other organizations are merged under
Article 10, whether the organization pre-existed the merger or
was created pursuant to the merger.
(r)(s) TRANSFER means an assignment, conveyance, deed,
bill of sale, lease, mortgage, security interest, encumbrance,
gift, or transfer by operation of law.
(s)(t) TRANSFEREE means a person to which all or part
of a transferable interest has been transferred, whether or
not the transferor is a member.
(t)(u) TRANSFERABLE INTEREST means a member's right to
receive distributions from a limited liability company or a
series thereof."
"§10A-5A-1.06
(a) It is the policy of this chapter and this state to
give maximum effect to the principles of freedom of contract
and to the enforceability of limited liability company
agreements.
(b) Unless displaced by particular provisions of this
chapter, the principles of law and equity supplement this
chapter.
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chapter.
(c) The rule that statutes in derogation of the common
law are to be strictly construed shall have no application to
this chapter.
(d) The use of any gender shall be applicable to all
genders. The captions contained in this chapter are for
purposes of convenience only and shall not control or affect
the construction of this chapter.
(e) Sections 7-9A-406 and 7-9A-408 of the Uniform
Commercial Code, and all successor statutes thereto, do not
apply to any interest in a limited liability company,
including all rights, powers, and interests arising under a
limited liability company agreement or this chapter. This
provision prevails over Sections 7-9A-406 and 7-9A-408 of the
Uniform Commercial Code, and all successor statutes thereto,
and is expressly intended to permit the enforcement of the
provisions of a limited liability company agreement that would
otherwise be ineffective under Sections 7-9A-406 and 7-9A-408
of the Uniform Commercial Code, and all successor statutes
thereto.
(f) Division E of Article 3 of Chapter 1 of this title
shall have no application to this chapter.
(g) The terms president, vice president, secretary, and
treasurer, as defined in Chapter 1, shall have no application
to this chapter.
(h) Section 10A-1-2.13(c) shall have no application to
this chapter.
(i) Action validly taken pursuant to one provision of
this chapter shall not be deemed invalid solely because it is
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this chapter shall not be deemed invalid solely because it is
identical or similar in substance to an action that could have
been taken pursuant to some other provision of this chapter
but fails to satisfy one or more requirements prescribed by
such other provision.
(j) The provisions of this chapter shall apply whether
a limited liability company has one member or more than one
member."
"§10A-5A-2.02
Division B of Article 3 of Chapter 1 shall not apply to
this chapter. Instead:
(a) A certificate of formation may be amended at any
time.
(b) A certificate of formation may be restated with or
without amendment at any time.
(c) To amend its certificate of formation, a limited
liability company must deliver a certificate of amendment for
filing to the Secretary of State which certificate of
amendment shall state:
(1) the name of the limited liability company;
(2) the unique identifying number or other designation
as assigned by the Secretary of State; and
(3) the changes the amendment makes to the certificate
of formation as most recently amended or restated.
(d) To restate its certificate of formation, a limited
liability company must deliver a restated certificate of
formation for filing to the Secretary of State. A restated
certificate of formation must:
(1) be designated as such in the heading;
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(1) be designated as such in the heading;
(2) state the limited liability company's name;
(3) state the unique identifying number or other
designation as assigned by the Secretary of State; and
(4) set forth any amendment or change effected in
connection with the restatement of the certificate of
formation.
Any such restatement that effects an amendment shall be
subject to any other provision of this chapter, not
inconsistent with this section, which would apply if a
separate certificate of amendment were filed to effect the
amendment or change.
(e) The original certificate of formation, as
theretofore amended, shall be superseded by the restated
certificate of formation and thenceforth, the restated
certificate of formation, including any further amendment or
changes made thereby, shall be the certificate of formation of
the limited liability company, but the original effective date
of formation shall remain unchanged.
(f) An amended or restated certificate of formation may
contain only provisions that would be permitted at the time of
the amendment if the amended or restated certificate of
formation were a newly filed original certificate of
formation.
(g) A restated certificate of formation may omit any
information that is not required to be in the certificate of
formation under this chapter, including the name and address
of the initial registered agent or registered office, if a
statement of change is on file with the Secretary of State.
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statement of change is on file with the Secretary of State.
Any omission other than the initial registered agent shall be
an amendment to the certificate of formation, which amendment
must be approved in accordance with the limited liability
company agreement, and if the limited liability company
agreement does not state the approval required for an
amendment of the certificate of formation, then the amendment
must be approved by all of the members."
"§10A-5A-5.02
(a) A transfer, in whole or in part, of a transferable
interest:
(1) is permissible;
(2)(A) does not by itself cause a member to cease to be
a member of the limited liability company; and
(B) does not by itself cause a member to cease to be
associated with a series of the limited liability company;
(3) does not by itself cause a dissolution and winding
up of the limited liability company, or a series thereof; and
(4) subject to Section 10A-5A-5.04, does not entitle
the transferee to:
(A) participate in the direction or oversight of the
activities and affairs of the limited liability company, or a
series thereof; or
(B) have access to records or other information
concerning the activities and affairs of the limited liability
company, or a series thereof.
(b) A transferee has the right to receive, in
accordance with the transfer, distributions to which the
transferor would otherwise be entitled.
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transferor would otherwise be entitled.
(c) A transferable interest may be evidenced by a
certificate of transferable interest issued by the limited
liability company, or a series thereof. A limited liability
company agreement may provide for the transfer of the
transferable interest represented by the certificate and make
other provisions with respect to the certificate. No
certificate of transferable interest shall be issued in bearer
form.
(d) A limited liability company, or a series thereof,
need not give effect to a transferee's rights under this
section until the limited liability company, or a series
thereof, has notice of the transfer.
(e) Except as otherwise provided in Sections
10A-5A-6.02(d)(2), 10A-5A-6.02(k), and 10A-5A-6.02(l) when a
member transfers a transferable interest, the transferor
retains the rights of a member other than the right to
distributions transferred and retains all duties and
obligations of a member.
(f) When a member transfers a transferable interest to
a person that is admitted as a member with respect to the
transferred interest, the transferee is liable for the
member's obligations under Sections 10A-5A-4.04,
10A-5A-4.06(a)(2), and 10A-5A-4.06(b)(2) to the extent that
the obligations are known to the transferee when the
transferee voluntarily accepts admission as a member.
(g) Notwithstanding anything in Title 43 to the
contrary, a limited liability company agreement may provide
that a transferable interest may or shall be transferred in
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that a transferable interest may or shall be transferred in
whole or in part, with or without consideration, to one or
more persons at the death of the holder of the transferable
interest. Any transferable interest transferred pursuant to
this subsection shall be subject to any outstanding charging
order under Section 10A-5A-5.03. This subsection does not
limit the rights of creditors of holders of transferable
interests against transferees under this chapter or other laws
of this state."
"§10A-5A-5.04
If a member dies, the deceased member's personal
representative or other legal representative may:
(a) for the period of time , if any, that the deceased
member's personal representative or other legal representative
holds the deceased member's transferable interest:
(1) exercise the rights of a holder of transferable
interests under this chapter;
(2) exercise the rights of a transferee under Section
10A-5A-5.02; and
(3) for purposes of settling the estate, exercise the
rights of a current member under Section 10A-5A-4.09; and
(b) for the period of time that the deceased member's
personal representative or other legal representative does not
hold the deceased member's transferable interest, for purposes
of settling the estate, exercise the rights of a dissociated
member under Section 10A-5A-4.09."
"§10A-5A-8.02
(a) In the case of a limited liability company
performing professional services, upon the death of a member,
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performing professional services, upon the death of a member,
upon a member becoming a disqualified person, or upon a
transferable interest being transferred by operation of law or
court decree to a disqualified person, the transferable
interest of the deceased member or of the disqualified person
may be transferred to a qualified person and, if not so
transferred, subject to Section 10A-5A-4.06, shall be
purchased by the limited liability company as provided in this
section.
(b) If the purchase price of the transferable interest
is not fixed by determined in accordance with the limited
liability company agreement, the limited liability company,
within six months after the death or 30 days after the
disqualification or transfer, as the case may be, shall make a
written offer to pay to the holder of for the transferable
interest a specified price deemed by the limited liability
company to be the fair value of the transferable interest as
of the date of the death, disqualification, or transfer. The
offer shall be given delivered to the personal representative
of the estate of the deceased member, the disqualified person,
or the transferee, as the case may be, and shall be
accompanied by a balance sheet of the limited liability
company, as of the latest available date and not more than 12
months prior to the making of the offer, and a profit and loss
statement of the limited liability company for the 12 months'
period ended on the date of the balance sheet.
(c) If within 30 days after the date of the written
offer from the limited liability company the fair value of the
transferable interest is agreed upon between the personal
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transferable interest is agreed upon between the personal
representative of the estate of the deceased member, the
disqualified person, or the transferee, as the case may be,
and the limited liability company, payment therefor shall be
made within 90 days, or such other period as the parties may
agree, after the date of the offer . Upon payment of the agreed
value, the personal representative of the estate of the
deceased member, the disqualified person, or the transferee,
as the case may be, shall cease to have any interest in, or
claim to, the transferable interest.
(d) If within 30 days from the date of the written
offer from the limited liability company, the fair value of
the transferable interest is not agreed upon between the
personal representative of the estate of the deceased member,
the disqualified person, or the transferee, as the case may
be, and the limited liability company do not so agree as to
the fair value of the transferable interest within 30 days of
the delivery of the written offer , then either party may
commence a civil action in the designated court, and if none,
in the circuit court for the county in which the limited
liability company's principal office within this state is
located, and if the limited liability company does not have a
principal office within this state, then in the circuit court
for the county in which the limited liability company's most
recent registered office is located requesting that the fair
value of the transferable interest be found and determined. If
the limited liability company does not deliver a written offer
in accordance with subsection (b), then the personal
representative of the estate of the deceased member, the
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representative of the estate of the deceased member, the
disqualified person, or the transferee, as the case may be,
may commence a civil action in the designated court, and if
none, in the circuit court for the county in which the limited
liability company's principal office is located in this state,
and if none in this state, in the circuit court for the county
in which the limited liability company's most recent
registered office is located requesting that the fair value of
the transferable interest be found and determined. The
personal representative of the estate of the deceased member,
the disqualified person, or the transferee, as the case may
be, wherever residing, shall be made a party to the proceeding
as an action against that person's transferable interest quasi
in rem. Service shall be made in accordance with the rules of
civil procedure. The personal representative of the estate of
the deceased member, the disqualified person, or the
transferee, as the case may be, shall be entitled to a
judgment against the limited liability company for the amount
of the fair value of that person's transferable interest as of
the date of death, disqualification, or transfer. The court,
in its discretion, may order that the judgment be paid in
installments and with interest and on terms as the court may
determine. The court, if it so elects, may appoint one or more
persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers shall
have the power and authority as shall be specified in the
order of their appointment or an amendment thereof.
(e) The judgment shall include an allowance for
interest at the rate the court finds to be fair and equitable
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interest at the rate the court finds to be fair and equitable
in all the circumstances, from the date of death,
disqualification, or transfer.
(f) The costs and expenses of any proceeding shall be
determined by the court and shall be assessed against the
parties in a manner the court deems equitable.
(g) The expenses shall include reasonable compensation
for and reasonable expenses of the appraisers and a reasonable
attorney's fee but shall exclude the fees and expenses of
counsel for and of experts employed by any party, but: (1) if
the fair value of the transferable interest as determined
materially exceeds the amount which the limited liability
company offered to pay therefor, or if no offer was made by
the limited liability company, the court in its discretion may
award to the personal representative of the estate of the
deceased member, the disqualified person, or the transferee,
as the case may be, the sum the court determines to be
reasonable compensation to any expert or experts employed by
the personal representative of the estate of the deceased
member, the disqualified person, or the transferee, as the
case may be, in the proceeding; and (2) if the offer of the
limited liability company for the transferable interest
materially exceeds the amount of the fair value of the
transferable interest as determined, the court, in its
discretion, may award to the limited liability company the sum
the court determines to be reasonable compensation to any
expert or experts employed by the limited liability company in
the proceeding.
(f)(1) The court in a proceeding commenced under
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(f)(1) The court in a proceeding commenced under
subsection (d) shall determine all court costs of the
proceeding, including the reasonable compensation and expenses
of appraisers appointed by the court. The court shall assess
the court costs against the limited liability company, except
that the court may assess court costs against the personal
representative of the estate of the deceased member, the
disqualified person, or the transferee, as the case may be, in
amounts which the court finds equitable, to the extent the
court finds the personal representative of the estate of the
deceased member, the disqualified person, or the transferee,
as the case may be, acted arbitrarily, vexatiously, or not in
good faith with respect to the rights provided by this
section.
(2) The court in a proceeding commenced under
subsection (d) may also assess the expenses of the respective
parties in amounts the court finds equitable:
(A) against the limited liability company and in favor
of the personal representative of the estate of the deceased
member, the disqualified person, or the transferee, as the
case may be, if the court finds the limited liability company
did not substantially comply with the requirements of this
section; or
(B) against either the limited liability company or the
personal representative of the estate of the deceased member,
the disqualified person, or the transferee, as the case may
be, in favor of the other party, if the court finds the party
against whom expenses are assessed acted arbitrarily,
vexatiously, or not in good faith with respect to the rights
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vexatiously, or not in good faith with respect to the rights
provided by this section.
(3) For purposes of this subsection (f), expenses means
reasonable expenses of any kind that are incurred in
connection with a proceeding brought under subsection (d).
(h)(g) If the purchase or transfer of the transferable
interest of a deceased member, a disqualified person, or a
transferee is not completed within 12 months after the death
of the deceased member or 12 months after the disqualification
or transfer, as the case may be, the limited liability company
shall forthwith cancel the transferable interest on its books
and the personal representative of the estate of the deceased
member, the disqualified person, or the transferee, as the
case may be, shall have no further interest in the
transferable interest other than that person's right to
payment for the transferable interest under this section.
(i)(h) This section shall not require a limited
liability company to purchase a transferable interest of a
disqualified person if the disqualification is for less than
12 months from the date of disqualification. A limited
liability company may require the disqualified person to sell
the disqualified person's transferable interest to the limited
liability company upon any disqualification.
(j)(i) Any provision of a limited liability company
agreement regarding the purchase or transfer of a transferable
interest of a limited liability company performing
professional services shall be specifically enforceable in the
courts of Alabama.
(k)(j) Nothing in this section shall prevent or relieve
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(k)(j) Nothing in this section shall prevent or relieve
a limited liability company from paying pension benefits or
other deferred compensation for services rendered to or on
behalf of a former member as otherwise permitted by law ."
"§10A-5A-10.01
(a) An organization other than a limited liability
company may convert to a limited liability company, and a
limited liability company may convert to an organization other
than a limited liability company pursuant to this section,
Sections 10A-5A-10.02 through 10A-5A-10.03, and a plan of
conversion, if:
(1) the governing statute of the organization that is
not a limited liability company authorizes the conversion;
(2) the law of the jurisdiction governing the
converting organization and the converted organization does
not prohibit the conversion; and
(3) the converting organization and the converted
organization each comply with the governing statute and
organizational documents applicable to that organization in
effecting the conversion.
(b) A plan of conversion must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of the converting organization, and
its unique identifying number or other designation as assigned
by the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address
of the principal office of the converted organization after
conversion;
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conversion;
(3) the terms and conditions of the conversion,
including the manner and basis for converting interests in the
converting organization into any combination of money,
interests in the converted organization, and other
consideration allowed in Section 10A-5A-10.01(c); and
(4) the organizational documents of the converted
organization.
(c) In connection with a conversion, rights or
securities of or interests in the converting organization may
be exchanged for or converted into cash, property, or rights
or securities of or interests in the converted organization,
or, in addition to or in lieu thereof, may be exchanged for or
converted into cash, property, or rights or securities of or
interests in another organization or may be cancelled.
(d) At the time of the approval of the plan of
conversion in accordance with Section 10A-5A-10.02, the plan
of conversion is not required to contain or have attached
thereto any disclosure letter, disclosure schedules, or
similar documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion. "
"§10A-5A-10.05
(a) A limited liability company may merge with one or
more other constituent organizations pursuant to this section,
Sections 10A-5A-10.06 through 10A-5A-10.08, and a plan of
merger, if:
(1) the governing statute of each of the other
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(1) the governing statute of each of the other
organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
(b) A plan of merger must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of each constituent organization, the
jurisdiction of the governing statute of each constituent
organization, and the respective unique identifying number or
other designation as assigned by the Secretary of State, if
any, of each constituent organization;
(2) the name, type of organization, and mailing address
of the principal office of the surviving organization, the
unique identifying number or other designation as assigned by
the Secretary of State, if any, of the surviving organization,
the jurisdiction of the governing statute of the surviving
organization, and, if the surviving organization is to be
created pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including
the manner and basis for converting the interests in each
constituent organization into any combination of money,
interests in the surviving organization, and other
consideration as allowed by subsection (c);
(4) if the surviving organization is to be created
pursuant to the merger, the surviving organization's
organizational documents; and
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organizational documents; and
(5) if the surviving organization is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving organization's organizational
documents.
(c) In connection with a merger, rights or securities
of or interests in a constituent organization may be exchanged
for or converted into cash, property, or rights or securities
of or interests in the surviving organization, or, in addition
to or in lieu thereof, may be exchanged for or converted into
cash, property, or rights or securities of or interests in
another organization or may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of merger may:
(1) provide that (i) a constituent organization or any
other party to the plan of merger that fails to perform its
obligations under the plan of merger in accordance with the
terms and conditions of the plan of merger, or that otherwise
fails to comply with the terms and conditions of the plan of
merger, in each case, required to be performed or complied
with prior to the time the merger becomes effective, or that
otherwise fails to consummate, or fails to cause the
consummation of, the merger (whether prior to a specified
date, upon satisfaction or, to the extent permitted by law,
waiver of all conditions to consummation set forth in the plan
of merger, or otherwise) shall be subject, in addition to any
other remedies available at law or in equity, to the penalties
or consequences as are set forth in the plan of merger (which
penalties or consequences may include an obligation to pay to
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penalties or consequences may include an obligation to pay to
the other party or parties to the plan of merger an amount
representing, or based on the loss of, any premium or other
economic entitlement the owners of the other party would be
entitled to receive pursuant to the terms of the plan of
merger if the merger were consummated in accordance with the
terms of the plan of merger) and (ii) if, pursuant to the
terms of the plan of merger, a limited liability company is
entitled to receive payment from another party to the plan of
merger of any amount representing a penalty or consequence (as
specified in clause (i) of this Section 10A-5A-10.02(d)(1)),
the limited liability company shall be entitled to enforce the
other party's payment obligation and, upon receipt of any
payment, shall be entitled to retain the amount of the payment
so received;
(2) provide (i) for the appointment, at or after the
time at which the plan of merger is adopted by the members of
a constituent limited liability company in accordance with the
requirements of Section 10A-5A-10.06, of one or more persons
(which may include the surviving or resulting entity or any
officer, manager, representative, or agent thereof) as
representative of the members of a constituent limited
liability company, including those whose transferable interest
shall be cancelled, converted, or exchanged in the merger, and
for the delegation to that person or persons of the sole and
exclusive authority to take action on behalf of the members
pursuant to the plan of merger, including taking such actions
as the representative determines to enforce (including by
entering into settlements with respect to) the rights of the
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entering into settlements with respect to) the rights of the
members under the plan of merger, on the terms and subject to
the conditions set forth in the plan of merger, (ii) that any
appointment pursuant to clause (i) of this Section
10A-5A-10.02(d)(2) shall be irrevocable and binding on all
members from and after the adoption of the plan of merger by
the requisite vote of the members pursuant to Section
10A-5A-10.06, and (iii) that any provision adopted pursuant to
this Section 10A-5A-10.02(d)(2) may not be amended after the
merger has become effective or may be amended only with the
consent or approval of persons specified in the plan of
merger; and
(3) contain any other provision not prohibited by law.
(e) At the time of the approval of the plan of merger
in accordance with Section 10A-5A-10.06, the plan of merger is
not required to contain or have attached thereto any
disclosure letter, disclosure schedules, or similar documents
or instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger."
Section 6. Sections 10A-8A-1.07, 10A-8A-2.02,
10A-8A-3.03, 10A-8A-3.04, 10A-8A-5.02, 10A-8A-5.04,
10A-8A-8.02, 10A-8A-8.03, 10A-8A-8.11, 10A-8A-9.01,
10A-8A-9.02, 10A-8A-9.06, 10A-8A-10.01, and 10A-8A-10.03 of
the Code of Alabama 1975, are amended to read as follows:
"§10A-8A-1.07
(a) It is the policy of this chapter and this state to
give maximum effect to the principles of freedom of contract
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give maximum effect to the principles of freedom of contract
and to the enforceability of partnership agreements.
(b) Unless displaced by particular provisions of this
chapter, the principles of law and equity supplement this
chapter.
(c) If an obligation to pay interest arises under this
chapter and the rate is not specified, the rate is the
applicable federal rate as determined from time to time by the
United States Treasury pursuant to 26 U.S.C. § 1274(d) or any
successor law.
(d) The rule that statutes in derogation of the common
law are to be strictly construed shall have no application to
this chapter.
(e) The use of any gender shall be applicable to all
genders. The captions contained in this chapter are for
purposes of convenience only and shall not control or affect
the construction of this chapter.
(f) Sections 7-9A-406 and 7-9A-408 of the Uniform
Commercial Code, and all successor statutes thereto, do not
apply to any interest in a partnership, including all rights,
powers, and interests arising under a partnership agreement or
this chapter. This provision prevails over Sections 7-9A-406
and 7-9A-408 of the Uniform Commercial Code, and all successor
statutes thereto, and is expressly intended to permit the
enforcement of the provisions of a partnership agreement that
would otherwise be ineffective under Sections 7-9A-406 and
7-9A-408 of the Uniform Commercial Code, and all successor
statutes thereto.
(g) Division E of Article 3 of Chapter 1 shall have no
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(g) Division E of Article 3 of Chapter 1 shall have no
application to this chapter.
(h) The terms president, vice-president vice president,
secretary, and treasurer, as defined in Chapter 1, shall have
no application to this chapter.
(i) Section 10A-1-2.13(c) shall have no application to
this chapter.
(j) Action validly taken pursuant to one provision of
this chapter shall not be deemed invalid solely because it is
identical or similar in substance to an action that could have
been taken pursuant to some other provision of this chapter
but fails to satisfy one or more requirements prescribed by
such other provision. "
"§10A-8A-2.02
(a) A partnership other than a partnership that has an
effective statement of not for profit partnership or an
effective statement of limited liability partnership on file
with the Secretary of State may deliver to the Secretary of
State for filing a statement of partnership for the purpose of
having its partnership agreement governed by the laws of this
state in accordance with Section 10A-8A-1.06(d) and providing
notice of its existence in accordance with Section
10A-8A-1.03(d)(1). A statement of partnership must contain all
of the following:
(1) the name of the partnership which name must comply
with Article 5 of Chapter 1;
(2) the date that the partnership was formed pursuant
to, or became governed by, the laws of this state a statement
that the partnership is governed by this chapter ;
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that the partnership is governed by this chapter ;
(3) the street and mailing address of its principal
office;
(4) the street and mailing address of a registered
office and the name of the registered agent at that office for
service of process in this state which the partnership shall
be required to maintain;
(5) a statement that the partnership was formed for the
purpose of carrying out on a for profit business;
(6) a statement that the partnership has two or more
partners; and
(7) a statement that the partnership agreement is
governed by the laws of this state, and if the partnership
agreement is a written partnership agreement, a declaration
that the written partnership agreement has a provision stating
that the partnership agreement is governed by the laws of this
state.
(b) A partnership other than a partnership that has an
effective statement of partnership or an effective statement
of limited liability partnership on file with the Secretary of
State may deliver to the Secretary of State for filing a
statement of not for profit partnership for the purpose of
setting forth the partners' intention to form a partnership to
carry on a not for profit activity in accordance with Section
10A-8A-2.01(a)(2), having its partnership agreement governed
by the laws of this state in accordance with Section
10A-8A-1.06(d), and providing notice of its existence in
accordance with Section 10A-8A-1.03(d)(2). A statement of not
for profit partnership must contain all of the following:
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for profit partnership must contain all of the following:
(1) the name of the partnership which name must comply
with Article 5 of Chapter 1;
(2) the date that the partnership was formed pursuant
to, or became governed by, the laws of this state;
(3) the street and mailing address of its principal
office;
(4) the street and mailing address of a registered
office and the name of the registered agent at that office for
service of process in this state which the partnership shall
be required to maintain;
(5) a statement that the partnership was formed for the
purpose of carrying out on a not for profit activity in
accordance with Section 10A-8A-2.01(a)(2);
(6) a statement that the partnership has two or more
partners; and
(7) a statement that the partnership agreement is
governed by the laws of this state, and if the partnership
agreement is a written partnership agreement, a declaration
that the written partnership agreement has a provision stating
that the partnership agreement is governed by the laws of this
state.
(c) A statement of partnership and a statement of not
for profit partnership may be amended or restated from time to
time in accordance with Section 10A-1-4.26.
(d) A statement of partnership and a statement of not
for profit partnership shall be executed by two or more
partners authorized to execute the statement of partnership or
statement of not for profit partnership.
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statement of not for profit partnership.
(e) A statement of partnership and a statement of not
for profit partnership shall be accompanied by a fee for the
Secretary of State in the amount prescribed by Section
10A-1-4.31.
(f) If a partnership complies with this section, the
Secretary of State shall file the statement of partnership or
the statement of not for profit partnership, as applicable.
(g) A statement of partnership or a statement of not
for profit partnership, as applicable, takes effect as
determined under Article 4 of Chapter 1.
(h) A partnership that has filed a statement of
partnership is for all purposes the same entity that existed
before the statement of partnership was filed and continues to
be a partnership under the laws of this state.
(i) A statement of partnership and a statement of not
for profit partnership are filing instruments for the purposes
of Chapter 1."
"§10A-8A-3.03
(a) A partnership may deliver to the Secretary of State
for filing a statement of authority, which:
(1) must include the name of the partnership and:
(A) if the partnership has not filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership, (i) the street and
mailing addresses of its principal office and, (ii) the name,
street address, and mailing address of its registered agent,
and (iii) if the Secretary of State has assigned a unique
identifying number or other designation to the partnership,
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identifying number or other designation to the partnership,
that number or designation; or
(B) if the partnership has filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership, (i) the street
address and mailing address of its principal office, (ii) the
name, street address, and mailing address of its registered
agent, and (iii) the unique identifying number or other
designation assigned to the partnership by the Secretary of
State.
(2) with respect to any position that exists in or with
respect to the partnership, may state the authority, or
limitations on the authority, of all persons holding the
position to:
(A) sign an instrument transferring real property held
in the name of the partnership; or
(B) enter into other transactions on behalf of, or
otherwise act for or bind, the partnership; and
(3) may state the authority, or limitations on the
authority, of a specific person to:
(A) sign an instrument transferring real property held
in the name of the partnership; or
(B) enter into other transactions on behalf of, or
otherwise act for or bind, the partnership.
(b) To amend or cancel a statement of authority filed
by the Secretary of State, a partnership must deliver to the
Secretary of State for filing an amendment or cancellation
stating:
(1) the name of the partnership;
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(1) the name of the partnership;
(2) if the partnership has not filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership, the street and
mailing addresses of the partnership's principal office;
(3) if the partnership has filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership, the name and
street and mailing addresses of its registered agent;
(4) the date the statement of authority being affected
became effective; and
(5) the contents of the amendment or a declaration that
the statement of authority is canceled .; and
(6) the unique identifying number or other designation
assigned to the partnership by the Secretary of State.
(c) A statement of authority affects only the power of
a person to bind a partnership to persons that are not
partners.
(d) Subject to subsection (c) and Section
10A-8A-1.03(d)(3) and except as otherwise provided in
subsections (f), (g), and (h), a limitation on the authority
of a person or a position contained in an effective statement
of authority is not by itself evidence of any person's
knowledge or notice of the limitation.
(e) Subject to subsection (c), a grant of authority not
pertaining to transfers of real property and contained in an
effective statement of authority is conclusive in favor of a
person that gives value in reliance on the grant, except to
the extent that when the person gives value:
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the extent that when the person gives value:
(1) the person has knowledge to the contrary;
(2) the statement of authority has been canceled or
restrictively amended under subsection (b); or
(3) a limitation on the grant is contained in another
statement of authority that became effective after the
statement of authority containing the grant became effective.
(f) Subject to subsection (c), an effective statement
of authority that grants authority to transfer real property
held in the name of the partnership, a certified copy of which
statement of authority is recorded in the office of the judge
of probate in the county in which the real property is
located, is conclusive in favor of a person that gives value
in reliance on the grant without knowledge to the contrary,
except to the extent that when the person gives value:
(1) the statement of authority has been canceled or
restrictively amended under subsection (b), and a certified
copy of the cancellation or restrictive amendment has been
recorded in the office of the judge of probate in the county
in which the real property is located; or
(2) a limitation on the grant is contained in another
statement of authority that became effective after the
statement of authority containing the grant became effective,
and a certified copy of the later-effective statement is
recorded in the office of the judge of probate in the county
in which the real property is located.
(g) Subject to subsection (c), if a certified copy of
an effective statement of authority containing a limitation on
the authority to transfer real property held in the name of a
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the authority to transfer real property held in the name of a
partnership is recorded in the office of the judge of probate
in the county in which the real property is located, all
persons are deemed to know of the limitation with respect to
the real property located in that county.
(h) Subject to subsection (i), an effective statement
of dissolution is a cancellation of any filed statement of
authority for the purposes of subsection (f) and is a
limitation on authority for purposes of subsection (g).
(i) After a statement of dissolution becomes effective,
a partnership may deliver to the Secretary of State for filing
and, if appropriate, may record a statement of authority that
is designated as a post-dissolution statement of authority.
The statement operates as provided in subsections (f) and (g).
(j) Unless canceled earlier, an effective statement of
authority is canceled by operation of law five years after the
date on which the statement, or its most recent amendment,
becomes effective. The cancellation is effective without
recording under subsection (f) or (g).
(k) An effective statement of denial operates as a
restrictive amendment under this section and may be recorded
by certified copy for purposes of subsection (f)(1).
(l) If a partnership has not filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership and the Secretary
of State has not assigned a unique identifying number or other
designation to that partnership, then the Secretary of State
shall assign a unique identifying number or other designation
to that partnership when that partnership delivers to the
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to that partnership when that partnership delivers to the
Secretary of State for filing that partnership's statement of
authority without the need of the partnership delivering to
the Secretary of State for filing a statement of partnership,
a statement of not for profit partnership, or a statement of
limited liability partnership. "
"§10A-8A-3.04
A person named in a filed statement of authority
granting that person authority may deliver to the Secretary of
State for filing a statement of denial that:
(1) provides:
(A) the name of the partnership and the caption of ;
(B) the date the statement of authority to which the
statement of denial pertains was filed by the filing officer ;
and
(C) the unique identifying number or other designation
assigned by the partnership by the Secretary of State; and
(2) denies the grant of authority.
A statement of denial is a limitation on authority as
provided in Section 10A-8A-3.03."
"§10A-8A-5.02
(a) A transfer, in whole or in part, of a partner's
transferable interest:
(1) is permissible;
(2) does not by itself cause the partner's
dissociation;
(3) does not by itself cause a dissolution and winding
up of the partnership; and
(4) subject to Section 10A-8A-5.05, does not entitle
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(4) subject to Section 10A-8A-5.05, does not entitle
the transferee to:
(A) participate in the management or conduct of the
partnership's business or not for profit activity; or
(B) except as otherwise provided in subsection (d),
have access to required information, records, or other
information concerning the partnership's business or not for
profit activity.
(b) A transferee has a right:
(1) to receive, in accordance with the transfer,
distributions to which the transferor would otherwise be
entitled;
(2) to receive upon the dissolution and winding up of
the partnership, in accordance with the transfer, the net
amount otherwise distributable to the transferor; and
(3) to seek under Section 10A-8A-8.01(5) a judicial
determination that it is equitable to wind up the partnership
business or not for profit activity.
(c) A transferable interest may be evidenced by a
certificate of transferable interest issued by the
partnership. A partnership agreement may provide for the
transfer of the transferable interest represented by the
certificate and make other provisions with respect to the
certificate. No certificate of transferable interest shall be
issued in bearer form.
(d) In a dissolution and winding up, a transferee is
entitled to an account of the partnership's transactions only
from the date of dissolution.
(e) Except as otherwise provided in Sections
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(e) Except as otherwise provided in Sections
10A-8A-6.01(4), 10A-8A-6.01(11), and 10A-8A-6.01(12), when a
partner transfers a transferable interest, the transferor
retains the rights of a partner other than the right to
distributions transferred and retains all duties and
obligations of a partner.
(f) A partnership need not give effect to a
transferee's rights under this section until the partnership
has notice of the transfer.
(g) When a partner transfers a transferable interest to
a person that is admitted as a partner with respect to the
transferred interest, the transferee is liable for the
partner's obligations under Sections 10A-8A-4.04 and
10A-8A-4.09 to the extent that the obligations are known to
the transferee when the transferee voluntarily accepts
admission as a partner.
(h) Notwithstanding anything in Title 43 to the
contrary, a partnership agreement may provide that a
transferable interest may or shall be transferred in whole or
in part, with or without consideration, to one or more persons
at the death of the holder of the transferable interest. Any
transferable interest transferred pursuant to this subsection
shall be subject to any outstanding charging order under
Section 10A-8A-5.03. This subsection does not limit the rights
of creditors of holders of transferable interests against
transferees under this chapter or other laws of this state.	"
"§10A-8A-5.04
If a partner dies, the deceased partner's personal
representative or other legal representative may:
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3024 HB200 INTRODUCED
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representative or other legal representative may:
(a) for the period of time , if any, that the deceased
partner's personal representative or other legal
representative holds the deceased partner's transferable
interest:
(1) exercise the rights of a holder of transferable
interests under this chapter;
(2) exercise the rights of a transferee under Section
10A-8A-5.02; and
(3) for purposes of settling the estate, exercise the
rights of a current partner under Section 10A-8A-4.10; and
(b) for the period of time that the deceased partner's
personal representative or other legal representative does not
hold the deceased partner's transferable interest, for
purposes of settling the estate, exercise the rights of a
person dissociated as a partner under Section 10A-8A-4.10."
"§10A-8A-8.02
(a) A dissolved partnership continues its existence as
a partnership but may not carry on any business or not for
profit activity except as is appropriate to wind up and
liquidate its business or not for profit activity, including:
(1) collecting its assets;
(2) disposing of its properties that will not be
distributed in kind to persons owning transferable interests;
(3) discharging or making provisions for discharging
its liabilities;
(4) distributing its remaining property in accordance
with Section 10A-8A-8.09; and
(5) doing every other act necessary to wind up and
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3052 HB200 INTRODUCED
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(5) doing every other act necessary to wind up and
liquidate its business or not for profit activity.
(b) In winding up its business or not for profit
activity, a partnership may:
(1) deliver to the Secretary of State for filing a
statement of dissolution setting forth:
(A) The name of the partnership;
(B) If the partnership has filed a statement of
partnership, a statement of not for profit partnership, a
statement of authority, or a statement of limited liability
partnership, the unique identifying number or other
designation as assigned by the Secretary of State;
(C) That the partnership has dissolved;
(D) The name, street address, and mailing address of
the partner who will be winding up the business or not for
profit activity of the partnership pursuant to Section
10A-8A-8.03(a), and if none, the name, street address, and
mailing address of the person appointed pursuant to Section
10A-8A-8.03(b) or (c) to wind up the business or not for
profit activity of the partnership;
(E) If the partnership has filed a statement of
partnership, a statement of not for profit partnership, or a
statement of limited liability partnership, the name, street
address, and mailing address of the partnership's registered
agent; and
(F) Any other information the partnership deems
appropriate;
(2) preserve the partnership's business or not for
profit activity as a going concern for a reasonable time;
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profit activity as a going concern for a reasonable time;
(3) prosecute, defend, or settle actions or
proceedings, whether civil, criminal, or administrative;
(4) transfer the partnership's assets;
(5) resolve disputes by mediation or arbitration; and
(6) merge or convert in accordance with Article 9 of
this chapter or Article 8 of Chapter 1.
(c) The dissolution of a partnership does not:
(1) transfer title to the partnership's property;
(2) prevent the commencement of a proceeding by or
against the partnership in its partnership name;
(3) terminate, abate, or suspend a proceeding pending
by or against the partnership on the effective date of
dissolution;
(4) terminate the authority of its registered agent; or
(5) abate, suspend, or otherwise alter the application
of Section 10A-8A-3.06.
(d) A statement of dissolution is a filing instrument
under Chapter 1.
(e) If a partnership has not filed a statement of
partnership, a statement of not for profit partnership, a
statement of limited liability partnership, or a statement of
authority and the Secretary of State has not assigned a unique
identifying number or other designation to that partnership,
then the Secretary of State shall assign a unique identifying
number or other designation to that partnership when that
partnership delivers to the Secretary of State for filing that
partnership's statement of dissolution without the need of
that partnership delivering to the Secretary of State for
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Page 112
that partnership delivering to the Secretary of State for
filing a statement of partnership, a statement of not for
profit partnership, a statement of limited liability
partnership, or a statement of authority. "
"§10A-8A-8.03
(a) If a dissolved partnership has a partner or
partners that have not dissociated, that partner or those
partners shall wind up the business or not for profit activity
of the partnership and shall have the powers set forth in
Section 10A-8A-8.04. A person whose dissociation as a partner
resulted in the dissolution of the partnership may participate
in the winding up as if still a partner, unless the
dissociation was wrongful.
(b) If a dissolved partnership does not have a partner
and no person has the right to participate in winding up under
subsection (a), the personal or legal representative of the
last person to have been a partner may wind up the
partnership's business or not for profit activity. If the
representative does not exercise that right, a person to wind
up the partnership's business or not for profit activity may
be appointed by the affirmative vote or consent of transferees
owning a majority of the transferable interests at the time
the consent is to be effective.
(c) A court of competent jurisdiction may order
judicial supervision of the winding up of a dissolved
partnership, including the appointment of a person to wind up
the partnership's business or not for profit activity:
(1) on application of a partner or any person entitled
under the last sentence of subsection (a) to participate in
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under the last sentence of subsection (a) to participate in
the winding up of the dissolved partnership, if the applicant
establishes good cause;
(2) on application of a transferee, if the partnership
does not have a partner and within a reasonable time following
the dissolution no person having the authority to wind up the
business or not for profit activity of the partnership has
been appointed pursuant to subsection (b);
(3) on application of a transferee, if the partnership
does not have a partner and within a reasonable time following
the dissolution the person appointed pursuant to subsection
(b) is not winding up the business or not for profit activity
of the partnership; or
(4) in connection with a proceeding under Section
10A-8A-8.01(4) or (5).
(d) A person appointed under subsection (b) or (c) is
not a partner but:
(1) has the powers of a partner under Section
10A-8A-8.04 but is not liable for the debts, liabilities, and
other obligations of the partnership solely by reason of
having or exercising those powers or otherwise acting to wind
up the business or not for profit activity of the dissolved
partnership; and
(2) shall promptly deliver to the Secretary of State
for filing a statement of dissolution setting forth the items
listed in Section 10A-8A-8.02(b)(1) and the following:
(A) that the partnership does not have a partner;
(B) the name, street address, and mailing address of
each person that has been appointed to wind up the business or
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each person that has been appointed to wind up the business or
not for profit activity of the partnership;
(C) that each person has been appointed pursuant to
subsection (b) or (c), as applicable, to wind up the business
or not for profit activity of the partnership; and
(D) pursuant to this section, that each person has the
powers of a partner under Section 10A-8A-8.04 but is not
liable for the debts, liabilities, and other obligations of
the partnership solely by reason of having or exercising those
powers or otherwise acting to wind up the business or not for
profit activity of the dissolved partnership .; and
(E) if the partnership has filed a statement of
partnership, a statement of not for profit partnership, a
statement of limited liability partnership or a statement of
authority, the unique identifying number or other designation
as assigned by the Secretary of State.
(e) If a partnership has not filed a statement of
partnership, a statement of not for profit partnership, a
statement of limited liability partnership, or statement of
authority and the Secretary of State has not assigned a unique
identifying number or other designation to that partnership,
then the Secretary of State shall assign a unique identifying
number or other designation to that partnership when the
person required under subsection (d) delivers to the Secretary
of State for filing the statement of dissolution for that
partnership, without the need to deliver to the Secretary of
State for filing a statement of partnership, a statement of
not for profit partnership, a statement of limited liability
partnership, or a statement of authority. "
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partnership, or a statement of authority. "
"§10A-8A-8.11
A partnership that has dissolved, has filed a statement
of dissolution, and is seeking to reinstate in accordance with
Section 10A-8A-8.10, shall deliver to the Secretary of State
for filing a certificate of reinstatement in accordance with
the following:
(a) A certificate of reinstatement shall be delivered
to the Secretary of State for filing. The certificate of
reinstatement shall state:
(1) the name of the partnership before reinstatement;
(2) the name of the partnership following
reinstatement, which partnership name shall comply with
Section 10A-8A-8.12;
(3) the date of formation of the partnership if known;
(4) the date of filing its statement of dissolution, if
any, and all amendments and restatements thereof, and the
office or offices where filed;
(5) if the partnership has filed a statement of
partnership, a statement of not for profit partnership, a
statement of authority, or a statement of limited liability
partnership, the unique identifying number or other
designation as assigned by the Secretary of State;
(6) the date of dissolution of the partnership, if
known;
(7) a statement that all applicable conditions of
Section 10A-8A-8.10 have been satisfied; and
(8) the address of the registered office and the name
of the registered agent at that address in compliance with
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of the registered agent at that address in compliance with
Article 5 of Chapter 1.
(b) A partnership shall deliver to the Secretary of
State for filing a statement of dissolution prior to or
simultaneously with the certificate of reinstatement. If a
partnership has not filed a statement of partnership, a
statement of not for profit partnership, or a statement of
limited liability partnership prior to filing its , or a
statement of dissolution , the partnership must also deliver to
the Secretary of State for filing a statement of partnership,
a statement of not for profit partnership, or a statement of
limited liability partnership, simultaneously with the
certificate of reinstatement and the Secretary of State has
not assigned a unique identifying number or other designation
to that partnership, then the Secretary of State shall assign
a unique identifying number or other designation to that
partnership when the partnership delivers to the Secretary of
State for filing the certificate of reinstatement for that
partnership, without the need to deliver to the Secretary of
State for filing a statement of partnership, a statement of
not for profit partnership, a statement of limited liability
partnership, a statement of authority, or a statement of
dissolution.
(c) A certificate of reinstatement is a filing
instrument under Chapter 1."
"§10A-8A-9.01
As used in this article, unless the context otherwise
requires, the following terms mean:
(1) CONSTITUENT ORGANIZATION means an organization that
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(1) CONSTITUENT ORGANIZATION means an organization that
is party to a merger under this article.
(2) CONSTITUENT PARTNERSHIP means a constituent
organization that is a partnership.
(3) CONVERTED ORGANIZATION means the organization into
which a converting organization converts pursuant to this
article.
(4) CONVERTING ORGANIZATION means an organization that
converts into another organization pursuant to this article.
(5) CONVERTING PARTNERSHIP means a converting
organization that is a partnership.
(6) GOVERNING STATUTE of an organization means the
statute that governs the organization's internal affairs.
(7) ORGANIZATION means a partnership, including a
limited liability partnership; limited partnership, including
a limited liability limited partnership; limited liability
company; business trust; corporation; nonprofit corporation;
professional corporation; or any other person having a
governing statute. The term includes domestic and foreign
organizations whether or not organized for profit.
(8) ORGANIZATIONAL DOCUMENTS means:
(A)(i) for a partnership, its partnership agreement
and, if applicable, its statement of partnership, statement of
not for profit partnership, or statement of limited liability
partnership; and (ii) for a foreign partnership, its
partnership agreement and, if applicable, its statement of
foreign limited liability partnership;
(B) for a limited partnership or foreign limited
partnership, its certificate of formation and partnership
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partnership, its certificate of formation and partnership
agreement, or comparable writings as provided in its governing
statute;
(C) for a limited liability company or foreign limited
liability company, its certificate of formation and limited
liability company agreement, or comparable writings as
provided in its governing statute;
(D) for a business or statutory trust or foreign
business or statutory trust its agreement of trust and
declaration of trust, or comparable writings as provided in
its governing statute;
(E) for a corporation for profit or foreign corporation
for profit, its certificate of formation, bylaws, and other
agreements among its shareholders that are authorized by its
governing statute, or comparable writings as provided in its
governing statute;
(F) for a nonprofit corporation or foreign nonprofit
corporation, its certificate of formation, bylaws, and other
agreements that are authorized by its governing statute, or
comparable writings as provided in its governing statute;
(G) for a professional corporation or foreign
professional corporation, its certificate of formation,
bylaws, and other agreements among its shareholders that are
authorized by its governing statute, or comparable writings as
provided in its governing statute; and
(H) for any other organization, the basic writings that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
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interest in it, or are members of it.
(9) PLAN OF MERGER. Except as set forth in Section
10A-8A-9.06(e), a plan of merger, whether referred to as a
plan of merger, an agreement of merger, a merger agreement, a
plan and agreement of merger, an agreement and plan of merger,
or otherwise, means a writing described in Section 10A-8A-9.06
and includes any agreement, instrument, or other document
referenced therein or associated therewith that sets forth the
terms and conditions of the merger.
(9)(10) SURVIVING ORGANIZATION means an organization
into which one or more other organizations are merged under
this article, whether the organization pre-existed the merger
or was created pursuant to the merger."
"§10A-8A-9.02
(a) An organization other than a partnership may
convert to a partnership, and a partnership may convert to an
organization other than a partnership pursuant to this
section, Sections 10A-8A-9.03 through 10A-8A-9.05, and a plan
of conversion, if:
(1) the governing statute of the organization that is
not a partnership authorizes the conversion;
(2) the law of the jurisdiction governing the
converting organization and the converted organization does
not prohibit the conversion; and
(3) the converting organization and the converted
organization each comply with the governing statute and
organizational documents applicable to that organization in
effecting the conversion.
(b) A plan of conversion must be in writing and must
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(b) A plan of conversion must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of the converting organization, and
its unique identifying number or other designation as assigned
by the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address
of the principal office of the converted organization after
conversion;
(3) the terms and conditions of the conversion,
including the manner and basis for converting interests in the
converting organization into any combination of money,
interests in the converted organization, and other
consideration allowed in Section 10A-8A-9.02(c); and
(4) the organizational documents of the converted
organization.
(c) In connection with a conversion, rights or
securities of or interests in the converting organization may
be exchanged for or converted into cash, property, or rights
or securities of or interests in the converted organization,
or, in addition to or in lieu thereof, may be exchanged for or
converted into cash, property, or rights or securities of or
interests in another organization or may be cancelled.
(d) At the time of the approval of the plan of
conversion in accordance with Section 10A-8A-9.03, the plan of
conversion is not required to contain or have attached thereto
any disclosure letter, disclosure schedules, or similar
documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
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conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion.
(d)(e) If a partnership is the converting organization
and that partnership does not have an effective statement of
partnership, statement of not for profit partnership, or
statement of limited liability partnership on file with the
Secretary of State, then that partnership must, before
proceeding with a conversion deliver to the Secretary of State
for filing, a statement of partnership, statement of not for
profit partnership, or statement of limited liability
partnership simultaneously with the delivery to the Secretary
of State for filing, of a statement of conversion.
(e)(f) If an organization is converting to a
partnership, the converting organization must deliver to the
Secretary of State for filing a statement of partnership,
statement of not for profit partnership, or a statement of
limited liability partnership in accordance with Section
10A-8A-9.04."
"§10A-8A-9.06
(a) A partnership may merge with one or more other
constituent organizations pursuant to this section, Sections
10A-8A-9.07 through 10A-8A-9.09, and a plan of merger, if:
(1) the governing statute of each of the other
organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
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governing statute in effecting the merger.
(b) A plan of merger must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of each constituent organization, the
jurisdiction of the governing statute of each constituent
organization, and the respective unique identifying numbers or
other designations as assigned by the Secretary of State, if
any, of each constituent organization;
(2) the name, type of organization, and mailing address
of the principal office of the surviving organization, the
unique identifying number or other designation as assigned by
the Secretary of State, if any, of the surviving organization,
the jurisdiction of the governing statute of the surviving
organization, and, if the surviving organization is to be
created pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including
the manner and basis for converting the interests in each
constituent organization into any combination of money,
interests in the surviving organization, and other
consideration as allowed by subsection (c);
(4) if the surviving organization is to be created
pursuant to the merger, the surviving organization's
organizational documents; and
(5) if the surviving organization is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving organization's organizational
documents.
(c) In connection with a merger, rights or securities
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(c) In connection with a merger, rights or securities
of or interests in a constituent organization may be exchanged
for or converted into cash, property, or rights or securities
of or interests in the surviving organization, or, in addition
to or in lieu thereof, may be exchanged for or converted into
cash, property, or rights or securities of or interests in
another organization or may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of merger may:
(1) provide that (i) a constituent organization or any
other party to the plan of merger that fails to perform its
obligations under the plan of merger in accordance with the
terms and conditions of the plan of merger, or that otherwise
fails to comply with the terms and conditions of the plan of
merger, in each case, required to be performed or complied
with prior to the time the merger becomes effective, or that
otherwise fails to consummate, or fails to cause the
consummation of, the merger (whether prior to a specified
date, upon satisfaction or, to the extent permitted by law,
waiver of all conditions to consummation set forth in the plan
of merger, or otherwise) shall be subject, in addition to any
other remedies available at law or in equity, to the penalties
or consequences as are set forth in the plan of merger (which
penalties or consequences may include an obligation to pay to
the other party or parties to the plan of merger an amount
representing, or based on the loss of, any premium or other
economic entitlement the owners of the other party would be
entitled to receive pursuant to the terms of the plan of
merger if the merger were consummated in accordance with the
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merger if the merger were consummated in accordance with the
terms of the plan of merger) and (ii) if, pursuant to the
terms of the plan of merger, a constituent organization is
entitled to receive payment from another party to the plan of
merger of any amount representing a penalty or consequence (as
specified in clause (i) of this Section 10A-8A-9.06(d)(1)),
the constituent organization shall be entitled to enforce the
other party's payment obligation and, upon receipt of any
payment, shall be entitled to retain the amount of the payment
so received;
(2) provide (i) for the appointment, at or after the
time at which the plan of merger is adopted by the owners of a
constituent organization in accordance with the requirements
of Section 10A-8A-9.07, of one or more persons (which may
include the surviving or resulting entity or any officer,
partner, representative, or agent thereof) as representative
of the owners of a constituent organization, including those
whose ownership interests shall be cancelled, converted, or
exchanged in the merger, and for the delegation to that person
or persons of the sole and exclusive authority to take action
on behalf of the owners pursuant to the plan of merger,
including taking such actions as the representative determines
to enforce (including by entering into settlements with
respect to) the rights of the owners under the plan of merger,
on the terms and subject to the conditions set forth in the
plan of merger, (ii) that any appointment pursuant to clause
(i) of this Section 10A-8A-9.06(d)(2) shall be irrevocable and
binding on all owners from and after the adoption of the plan
of merger by the requisite vote of the partners pursuant to
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of merger by the requisite vote of the partners pursuant to
Section 10A-8A-9.07, and (iii) that any provision adopted
pursuant to this Section 10A-8A-9.06(d)(2) may not be amended
after the merger has become effective or may be amended only
with the consent or approval of persons specified in the plan
of merger; and
(3) contain any other provision not prohibited by law.
(e) At the time of the approval of the plan of merger
in accordance with Section 10A-8A-9.07, the plan of merger is
not required to contain or have attached thereto any
disclosure letter, disclosure schedules, or similar documents
or instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger."
"§10A-8A-10.01
(a) A partnership may be formed as, or may become, a
limited liability partnership pursuant to this section.
(b) In order to form a limited liability partnership,
the original partnership agreement of the partnership shall
state that the partnership is formed as a limited liability
partnership, and the partnership shall deliver to the
Secretary of State for filing a statement of limited liability
partnership in accordance with subsection (d) of this section.
(c) In order for an existing partnership to become a
limited liability partnership, the terms and conditions on
which the partnership becomes a limited liability partnership
must be approved by the affirmative approval necessary to
amend the partnership agreement and, in the case of a
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amend the partnership agreement and, in the case of a
partnership agreement that expressly considers obligations to
contribute to the partnership, also the affirmative approval
necessary to amend those provisions, and after such approval,
the partnership shall deliver to the Secretary of State for
filing a statement of limited liability partnership in
accordance with subsection (d).
(d) A statement of limited liability partnership must
contain all of the following:
(1) the name of the limited liability partnership which
must comply with Article 5 of Chapter 1;
(2) the street, and mailing, if different, address of
its principal office .;
(3) the street and mailing address of a the registered
office and the name of the registered agent at that office for
service of process in this state which the partnership shall
be required to maintain in accordance with Chapter 1 ;
(4) a statement that the partnership was formed as a
limited liability partnership in accordance with subsection
(b) or a statement that the statement of limited liability
partnership was approved in accordance with subsection (c);
and
(5) a statement that the partnership is a limited
liability partnership .; and
(6) the unique identifying number or other designation,
if any, as assigned to the partnership by the Secretary of
State.
(e) A statement of limited liability partnership may be
amended or restated from time to time in accordance with
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3528 HB200 INTRODUCED
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amended or restated from time to time in accordance with
Section 10A-1-4.26.
(f) The statement of limited liability partnership
shall be executed by one or more partners authorized to
execute the statement of limited liability partnership.
(g) The statement of limited liability partnership
shall be accompanied by a fee for the Secretary of State in
the respective amounts prescribed by Section 10A-1-4.31.
(h) The Secretary of State shall file the statement of
limited liability partnership of any partnership as a limited
liability partnership that submits a completed statement of
limited liability partnership with the required fees. The
filing by the Secretary of State of a statement of limited
liability partnership is conclusive evidence that the
partnership has satisfied all conditions required to be a
limited liability partnership.
(i) The statement of limited liability partnership is
effective, and a partnership becomes a limited liability
partnership, immediately on the date the statement of limited
liability partnership is filed with the Secretary of State or
at any later date or time specified in the statement of
limited liability partnership in compliance with Article 4 of
Chapter 1. The status as a limited liability partnership
remains effective, regardless of changes in the partnership,
and partnership continues as a limited liability partnership
until a statement of cancellation is voluntarily filed in
accordance with subsection (m).
(j) The fact that a statement of limited liability
partnership is on file with the Secretary of State is notice
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partnership is on file with the Secretary of State is notice
that the partnership is a limited liability partnership and as
notice of the facts required to be set forth in the statement
of limited liability partnership.
(k) A partnership that has filed a statement of limited
liability partnership as a limited liability partnership is
for all purposes, except as provided in Section 10A-8A-3.06,
the same entity that existed before the statement of limited
liability partnership was filed and continues to be a
partnership under the laws of this state subject to the
limited liability partnership provisions of this chapter. If a
limited liability partnership dissolves and its business or
not for profit activity, or a portion of its business or not
for profit activity is continued without the complete winding
up of partnership's business or not for profit activity, a
partnership which is a successor to the limited liability
partnership shall not be required to file a new statement of
limited liability partnership.
(l) The status of the partnership as a limited
liability partnership and the liability of a partner of the
limited liability partnership shall not be adversely affected
by error or subsequent changes in the information stated in
the statement of limited liability partnership under
subsection (d).
(m) The decision to file a statement of cancellation
shall require the approval of all of the partners of the
partnership. The statement of cancellation must be delivered
for filing to the Secretary of State and must contain the
following:
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following:
(1) the name of the limited liability partnership;
(2) the date and office or offices in which it filed
its statement of limited liability partnership, and all
amendments and restatements thereof the unique identifying
number or other designation as assigned to the partnership by
the Secretary of State ;
(3) the street and mailing address of its principal
office;
(4) the street and mailing address of its registered
office and the name of the registered agent at that office for
service of process in this state which the partnership was
required to maintain;
(5) a statement that the statement of cancellation was
approved in accordance with this subsection; and
(6) any other information that the partners determine
to include.
(n) A statement of cancellation must be executed by one
or more partners authorized to execute the statement of
cancellation.
(o) The statement of cancellation is effective, and a
partnership ceases to be a limited liability partnership,
immediately on the date the statement of cancellation is
delivered to the Secretary of State for filing or at any later
date or time specified in the statement of cancellation in
compliance with Article 4 of Chapter 1. The statement of
cancellation shall not cause the dissolution of the
partnership.
(p) The filing of a statement of cancellation of a
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(p) The filing of a statement of cancellation of a
limited liability partnership does not affect the limited
liability of partners for debts, obligations or liabilities of
the partnership which occur or were incurred prior to the
filing of the statement of cancellation.
(q) A dissolved limited liability partnership shall
continue its status as a limited liability partnership unless
a statement of cancellation is voluntarily filed in accordance
with subsection (m).
(r) The statement of limited liability partnership and
the statement of cancellation are filing instruments for the
purposes of Chapter 1."
"§10A-8A-10.03
(a) In the case of a limited liability partnership
performing professional services, upon the death of a partner,
upon a partner becoming a disqualified person, or upon a
transferable interest being transferred by operation of law or
court decree to a disqualified person, the transferable
interest of the deceased partner or of the disqualified person
may be transferred to a qualified person and, if not so
transferred, subject to Section 10A-8A-4.09, shall be
purchased by the limited liability partnership as provided in
this section.
(b) If the purchase price of the transferable interest
is not fixed by determined in accordance with the partnership
agreement, the limited liability partnership, within six
months after the death or 30 days after the disqualification
or transfer, as the case may be, shall make a written offer to
pay to the holder of for the transferable interest a specified
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pay to the holder of for the transferable interest a specified
price deemed by the limited liability partnership to be the
fair value of the transferable interest as of the date of the
death, disqualification, or transfer. The offer shall be given
delivered to the personal representative of the estate of the
deceased partner, the disqualified person, or the transferee,
as the case may be, and shall be accompanied by a balance
sheet of the limited liability partnership, as of the latest
available date and not more than 12 months prior to the making
of the offer, and a profit and loss statement of the limited
liability partnership for the 12-month period ended on the
date of the balance sheet.
(c) If within 30 days after the date of the written
offer from the limited liability partnership the fair value of
the transferable interest is agreed upon between the personal
representative of the estate of the deceased partner, the
disqualified person, or the transferee, as the case may be,
and the limited liability partnership, payment therefor shall
be made within 90 days, or such other period as the parties
may agree, after the date of the offer . Upon payment of the
agreed value, the personal representative of the estate of the
deceased partner, the disqualified person, or the transferee,
as the case may be, shall cease to have any interest in, or
claim to, the transferable interest.
(d) If within 30 days from the date of the written
offer from the limited liability partnership, the fair value
of the transferable interest is not agreed upon between the
personal representative of the estate of the deceased partner,
the disqualified person, or the transferee, as the case may
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the disqualified person, or the transferee, as the case may
be, and the limited liability partnership do not so agree as
to the fair value of the transferable interest within 30 days
of the delivery of the written offer , then either party may
commence a civil action in the designated court, and if none,
in the circuit court for the county in which the limited
liability partnership's principal office within this state is
located, and if the limited liability partnership does not
have a principal office within this state, then in the circuit
court for the county in which the limited liability
partnership's most recent registered office is located
requesting that the fair value of the transferable interest be
found and determined. If the limited liability partnership
does not deliver a written offer in accordance with subsection
(b), then the personal representative of the estate of the
deceased partner, the disqualified person, or the transferee,
as the case may be, may commence a civil action in the
designated court, and if none, in the circuit court for the
county in which the limited liability partnership's principal
office is located in this state, and if none in this state, in
the circuit court for the county in which the limited
liability partnership's most recent registered office is
located requesting that the fair value of the transferable
interest be found and determined. The personal representative
of the estate of the deceased partner, the disqualified
person, or the transferee, as the case may be, wherever
residing, shall be made a party to the proceeding as an action
against that person's transferable interest quasi in rem.
Service shall be made in accordance with the rules of civil
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Service shall be made in accordance with the rules of civil
procedure. The personal representative of the estate of the
deceased partner, the disqualified person, or the transferee,
as the case may be, shall be entitled to a judgment against
the limited liability partnership for the amount of the fair
value of that person's transferable interest as of the date of
death, disqualification, or transfer. The court may order that
the judgment be paid in installments and with interest and on
terms as the court may determine. The court , if it so elects,
may appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair
value. The appraisers shall have the power and authority as
shall be specified in the order of their appointment or an
amendment thereof.
(e) The judgment shall include an allowance for
interest at the rate the court finds to be fair and equitable
in all the circumstances, from the date of death,
disqualification, or transfer.
(f) The costs and expenses of any proceeding shall be
determined by the court and shall be assessed against the
parties in a manner the court deems equitable.
(g) The expenses shall include reasonable compensation
for and reasonable expenses of the appraisers and a reasonable
attorney's fee but shall exclude the fees and expenses of
counsel for and of experts employed by any party; but:
(1) if the fair value of the transferable interest as
determined materially exceeds the amount which the limited
liability partnership offered to pay therefor, or if no offer
was made by the limited liability partnership, the court, in
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was made by the limited liability partnership, the court, in
its discretion, may award to the personal representative of
the estate of the deceased partner, the disqualified person,
or the transferee, as the case may be, the sum the court
determines to be reasonable compensation to any expert or
experts employed by the personal representative of the estate
of the deceased partner, the disqualified person, or the
transferee, as the case may be, in the proceeding; and
(2) if the offer of the limited liability partnership
for the transferable interest materially exceeds the amount of
the fair value of the transferable interest as determined, the
court, in its discretion, may award to the limited liability
partnership the sum the court determines to be reasonable
compensation to any expert or experts employed by the limited
liability partnership in the proceeding.
(f)(1) The court in a proceeding commenced under
subsection (d) shall determine all court costs of the
proceeding, including the reasonable compensation and expenses
of appraisers appointed by the court. The court shall assess
the court costs against the limited liability partnership,
except that the court may assess court costs against the
personal representative of the estate of the deceased partner,
the disqualified person, or the transferee, as the case may
be, in amounts which the court finds equitable, to the extent
the court finds the personal representative of the estate of
the deceased partner, the disqualified person, or the
transferee, as the case may be, acted arbitrarily,
vexatiously, or not in good faith with respect to the rights
provided by this section.
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provided by this section.
(2) The court in a proceeding commenced under
subsection (d) may also assess the expenses of the respective
parties in amounts the court finds equitable:
(A) against the limited liability partnership and in
favor of the personal representative of the estate of the
deceased partner, the disqualified person, or the transferee,
as the case may be, if the court finds the limited liability
partnership did not substantially comply with the requirements
of this section; or
(B) against either the limited liability partnership or
the personal representative of the estate of the deceased
partner, the disqualified person, or the transferee, as the
case may be, in favor of the other party, if the court finds
the party against whom expenses are assessed acted
arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this section.
(3) For purposes of this subsection (f), expenses means
reasonable expenses of any kind that are incurred in
connection with a proceeding brought under subsection (d).
(h)(g) If the purchase or transfer of the transferable
interest of a deceased partner, a disqualified person, or a
transferee is not completed within 12 months after the death
of the deceased partner or 12 months after the
disqualification or transfer, as the case may be, the limited
liability partnership shall forthwith cancel the transferable
interest on its books and the personal representative of the
estate of the deceased partner, the disqualified person, or
the transferee, as the case may be, shall have no further
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the transferee, as the case may be, shall have no further
interest in the transferable interest other than that person's
right to payment for the transferable interest under this
section.
(i)(h) This section shall not require a limited
liability partnership to purchase a transferable interest of a
disqualified person if the disqualification is for less than
12 months from the date of disqualification. A limited
liability partnership may require the disqualified person to
sell the disqualified person's transferable interest to the
limited liability partnership upon any disqualification.
(j)(i) Any provision of a partnership agreement
regarding the purchase or transfer of a transferable interest
of a limited liability partnership performing professional
services shall be specifically enforceable in the courts of
Alabama.
(k)(j) Nothing in this section shall prevent or relieve
a limited liability partnership from paying pension benefits
or other deferred compensation for services rendered to or on
behalf of a former partner as otherwise permitted by law	."
Section 7. Sections 10A-9A-1.07, 10A-9A-2.06,
10A-9A-7.02, 10A-9A-7.04, 10A-9A-9.02, 10A-9A-10.01,
10A-9A-10.02, and 10A-9A-10.06 of the Code of Alabama 1975,
are amended to read as follows:
"§10A-9A-1.07
(a) It is the policy of this chapter and this state to
give maximum effect to the principles of freedom of contract
and to the enforceability of partnership agreements.
(b) Unless displaced by particular provisions of this
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(b) Unless displaced by particular provisions of this
chapter, the principles of law and equity supplement this
chapter.
(c) If an obligation to pay interest arises under this
chapter and the rate is not specified, the rate is the
applicable federal rate as determined from time to time by the
United States Treasury pursuant to 26 U.S.C. § 1274(d) or any
successor law.
(d) The rule that statutes in derogation of the common
law are to be strictly construed shall have no application to
this chapter.
(e) The use of any gender shall be applicable to all
genders. The captions contained in this chapter are for
purposes of convenience only and shall not control or affect
the construction of this chapter.
(f) Sections 7-9A-406 and 7-9A-408 of the Uniform
Commercial Code, and all successor statutes thereto, do not
apply to any interest in a limited partnership, including all
rights, powers, and interests arising under a partnership
agreement or this chapter. This provision prevails over
Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code,
and all successor statutes thereto, and is expressly intended
to permit the enforcement of the provisions of a partnership
agreement that would otherwise be ineffective under Sections
7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all
successor statutes thereto.
(g) Division E of Article 3 of Chapter 1 shall have no
application to this chapter.
(h) The terms president, vice president, secretary, and
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(h) The terms president, vice president, secretary, and
treasurer, as defined in Chapter 1, shall have no application
to this chapter.
(i) Section 10A-1-2.13(c) shall have no application to
this chapter.
(j) Action validly taken pursuant to one provision of
this chapter shall not be deemed invalid solely because it is
identical or similar in substance to an action that could have
been taken pursuant to some other provision of this chapter
but fails to satisfy one or more requirements prescribed by
such other provision. "
"§10A-9A-2.06
(a) The Secretary of State, upon request and payment of
the requisite fee, shall furnish to any person a certificate
of existence for a limited partnership if the writings filed
in the office of the Secretary of State show that the limited
partnership has been formed under the laws of this state. A
certificate of existence shall reflect only the information on
file with the Secretary of State. To the extent writings have
been delivered to the Secretary of State, the certificate of
existence must state:
(1) the limited partnership's name;
(2) that the limited partnership was formed under the
laws of this state, the date of formation, and the filing
office in which the certificate of formation was filed;
(3) whether a statement of dissolution of the limited
partnership has been delivered to the Secretary of State for
filing;
(4) whether the limited partnership has delivered to
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(4) whether the limited partnership has delivered to
the Secretary of State for filing a certificate of
reinstatement;
(5) the unique identifying number or other designation
as assigned by the Secretary of State; and
(6) other facts of record in the office of the
Secretary of State which may be requested by the applicant.
(b) The Secretary of State, upon request and payment of
the requisite fee, shall furnish to any person a certificate
of authorization for a foreign limited partnership if the
writings filed in the office of the Secretary of State show
that the Secretary of State has filed a certificate of
authority, has not revoked the certificate of authority, and
has not filed a notice of cancellation. A certificate of
authorization must state:
(1) the foreign limited partnership's name and any
alternate name for use in this state under Article 5 of
Chapter 1;
(2) that the foreign limited partnership is authorized
to conduct activities and affairs in this state;
(3) that the Secretary of State has not revoked the
foreign limited partnership's certificate of authority;
(4) that the foreign limited partnership has not filed
with the Secretary of State a certificate of withdrawal, a
notice of cancellation, or otherwise terminated its
certificate of authority;
(5) the unique identifying number or other designation
as assigned by the Secretary of State; and
(6) other facts of record in the office of the
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(6) other facts of record in the office of the
Secretary of State which may be requested by the applicant.
(c) Subject to any qualification stated in the
certificate, a certificate of existence or authorization
issued by the Secretary of State may be relied upon as
conclusive evidence that the limited partnership or foreign
limited partnership is in existence or is authorized to
transact activities and affairs in this state.
(d) The Secretary of State shall not be required to
issue a certificate of existence for a limited partnership if
its certificate of formation was filed prior to January 1,
2011; provided, however, that the Secretary of State shall
issue a certificate of existence upon the filing by the
limited partnership of a certificate of information with the
Secretary of State which must : comply with Section
10A-1-3.08(b).
(1) state all information required in Section
10A-9A-2.01(a)(1), (a)(2), (a)(3), (a)(4), (a)(5), and (a)(6);
and
(2) list and attach certified copies of all writings
filed as to the limited partnership. "
"§10A-9A-7.02
(a) A transfer, in whole or in part, of a partner's
transferable interest:
(1) is permissible;
(2) does not by itself cause the partner's
dissociation;
(3) does not by itself cause a dissolution and winding
up of the limited partnership; and
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up of the limited partnership; and
(4) subject to Section 10A-9A-7.04, does not entitle
the transferee to:
(A) participate in the management or conduct of the
limited partnership's activities and affairs; or
(B) except as otherwise provided in subsection (d),
have access to required information, records, or other
information concerning the partnership's activities and
affairs.
(b) A transferee has the right to receive, in
accordance with the transfer, distributions to which the
transferor would otherwise be entitled.
(c) A transferable interest may be evidenced by a
certificate of transferable interest issued by the limited
partnership. A partnership agreement may provide for the
transfer of the transferable interest represented by the
certificate and make other provisions with respect to the
certificate. No certificate of transferable interest shall be
issued in bearer form.
(d) In a dissolution and winding up, a transferee is
entitled to an account of the limited partnership's
transactions only from the date of dissolution.
(e) Except as otherwise provided in Sections
10A-9A-6.01(b)(3), 10A-9A-6.01(b)(10), 10A-9A-6.01(b)(11),
10A-9A-6.03(4)(B), 10A-9A-6.03(11), and 10A-9A-6.03(12) when a
partner transfers a transferable interest, the transferor
retains the rights of a partner other than the right to
distributions transferred and retains all duties and
obligations of a partner.
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obligations of a partner.
(f) A limited partnership need not give effect to a
transferee's rights under this section until the limited
partnership has notice of the transfer.
(g) When a partner transfers a transferable interest to
a person that is admitted as a partner with respect to the
transferred interest, the transferee is liable for the
partner's obligations under Sections 10A-9A-5.02 and
10A-9A-5.08 to the extent that the obligations are known to
the transferee when the transferee voluntarily accepts
admission as a partner.
(h) Notwithstanding anything in Title 43 to the
contrary, a partnership agreement may provide that a
transferable interest may or shall be transferred in whole or
in part, with or without consideration, to one or more persons
at the death of the holder of the transferable interest. Any
transferable interest transferred pursuant to this subsection
shall be subject to any outstanding charging order under
Section 10A-9A-7.03. This subsection does not limit the rights
of creditors of holders of transferable interests against
transferees under this chapter or other laws of this state.	"
"§10A-9A-7.04
If a partner dies, the deceased partner's personal
representative or other legal representative may:
(a) for the period of time , if any, that the deceased
partner's personal representative or other legal
representative holds the deceased partner's transferable
interest:
(1) exercise the rights of a holder of transferable
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(1) exercise the rights of a holder of transferable
interests under this chapter;
(2) exercise the rights of a transferee under Section
10A-9A-7.02; and
(3) for purposes of settling the estate, exercise the
rights of a current limited partner under Section 10A-9A-3.04;
and
(b) for the period of time that the deceased partner's
personal representative or other legal representative does not
hold the deceased partner's transferable interest, for
purposes of settling the estate, exercise the rights of a
person dissociated as a limited partner under Section
10A-9A-3.04."
"§10A-9A-9.02
A partner may commence or maintain a derivative action
in the right of a limited partnership to enforce a right of
the limited partnership recover for an injury to the limited
partnership by complying with this article."
"§10A-9A-10.01
As used in this article, unless the context otherwise
requires, the following terms mean:
(1) CONSTITUENT LIMITED PARTNERSHIP means a constituent
organization that is a limited partnership.
(2) CONSTITUENT ORGANIZATION means an organization that
is party to a merger under this article.
(3) CONVERTED ORGANIZATION means the organization into
which a converting organization converts pursuant to this
article.
(4) CONVERTING LIMITED PARTNERSHIP means a converting
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(4) CONVERTING LIMITED PARTNERSHIP means a converting
organization that is a limited partnership.
(5) CONVERTING ORGANIZATION means an organization that
converts into another organization pursuant to this article.
(6) GENERAL PARTNER means a general partner of a
limited partnership.
(7) GOVERNING STATUTE of an organization means the
statute that governs the organization's internal affairs.
(8) ORGANIZATION means a general partnership, including
a limited liability partnership; limited partnership,
including a limited liability limited partnership; limited
liability company; business trust; corporation; nonprofit
corporation; professional corporation; or any other person
having a governing statute. The term includes domestic and
foreign organizations whether or not organized for profit.
(9) ORGANIZATIONAL DOCUMENTS means:
(A) for a general partnership or foreign general
partnership, its partnership agreement and if applicable, its
registration as a limited liability partnership or a foreign
limited liability partnership;
(B) for a limited partnership or foreign limited
partnership, its certificate of formation and partnership
agreement, or comparable writings as provided in its governing
statute;
(C) for a limited liability company or foreign limited
liability company, its certificate of formation and limited
liability company agreement, or comparable writings as
provided in its governing statute;
(D) for a business or statutory trust or foreign
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(D) for a business or statutory trust or foreign
business or statutory trust its agreement of trust and
declaration of trust, or comparable writings as provided in
its governing statute;
(E) for a corporation for profit or foreign corporation
for profit, its certificate of formation, bylaws, and other
agreements among its shareholders that are authorized by its
governing statute, or comparable writings as provided in its
governing statute;
(F) for a nonprofit corporation or foreign nonprofit
corporation, its certificate of formation, bylaws, and other
agreements that are authorized by its governing statute, or
comparable writings as provided in its governing statute;
(G) for a professional corporation or foreign
professional corporation, its certificate of formation,
bylaws, and other agreements among its shareholders that are
authorized by its governing statute, or comparable writings as
provided in its governing statute; and
(H) for any other organization, the basic writings that
create the organization and determine its internal governance
and the relations among the persons that own it, have an
interest in it, or are members of it.
(10) PLAN OF MERGER. Except as set forth in Section
10A-9A-10.06(e), a plan of merger, whether referred to as a
plan of merger, an agreement of merger, a merger agreement, a
plan and agreement of merger, an agreement and plan of merger,
or otherwise, means a writing described in Section
10A-9A-10.06 and includes any agreement, instrument, or other
document referenced therein or associated therewith that sets
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document referenced therein or associated therewith that sets
forth the terms and conditions of the merger.
(10)(11) SURVIVING ORGANIZATION means an organization
into which one or more other organizations are merged under
this article, whether the organization pre-existed the merger
or was created pursuant to the merger. "
"§10A-9A-10.02
(a) An organization other than a limited partnership
may convert to a limited partnership, and a limited
partnership may convert to an organization other than a
limited partnership pursuant to this section, Sections
10A-9A-10.03 through 10A-9A-10.05, and a plan of conversion,
if:
(1) the governing statute of the organization that is
not a limited partnership authorizes the conversion;
(2) the law of the jurisdiction governing the
converting organization and the converted organization does
not prohibit the conversion; and
(3) the converting organization and the converted
organization each comply with the governing statute and
organizational documents applicable to that organization in
effecting the conversion.
(b) A plan of conversion must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of the converting organization, and
its unique identifying number or other designation as assigned
by the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address
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(2) the name, type of organization, and mailing address
of the principal office of the converted organization after
conversion;
(3) the terms and conditions of the conversion,
including the manner and basis for converting interests in the
converting organization into any combination of money,
interests in the converted organization, and other
consideration allowed in Section 10A-9A-10.02(c); and
(4) the organizational documents of the converted
organization.
(c) In connection with a conversion, rights or
securities of or interests in the converting organization may
be exchanged for or converted into cash, property, or rights
or securities of or interests in the converted organization,
or, in addition to or in lieu thereof, may be exchanged for or
converted into cash, property, or rights or securities of or
interests in another organization or may be cancelled.
(d) At the time of the approval of the plan of
conversion in accordance with Section 10A-9A-10.03, the plan
of conversion is not required to contain or have attached
thereto any disclosure letter, disclosure schedules, or
similar documents or instruments contemplated by the plan of
conversion that modify, supplement, qualify, or make
exceptions to representations, warranties, covenants, or
conditions contained in the plan of conversion. "
"§10A-9A-10.06
(a) A limited partnership may merge with one or more
other constituent organizations pursuant to this section,
Sections 10A-9A-10.07 through 10A-9A-10.09, and a plan of
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Sections 10A-9A-10.07 through 10A-9A-10.09, and a plan of
merger, if:
(1) the governing statute of each of the other
organizations authorizes the merger;
(2) the merger is not prohibited by the law of a
jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its
governing statute in effecting the merger.
(b) A plan of merger must be in writing and must
include:
(1) the name, type of organization, and mailing address
of the principal office of each constituent organization, the
jurisdiction of the governing statute of each constituent
organization, and the respective unique identifying numbers or
other designations as assigned by the Secretary of State, if
any, of each constituent organization;
(2) the name, type of organization, and mailing address
of the principal office of the surviving organization, the
unique identifying number or other designation as assigned by
the Secretary of State, if any, of the surviving organization,
the jurisdiction of the governing statute of the surviving
organization, and, if the surviving organization is to be
created pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including
the manner and basis for converting the interests in each
constituent organization into any combination of money,
interests in the surviving organization, and other
consideration as allowed by subsection (c);
(4) if the surviving organization is to be created
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(4) if the surviving organization is to be created
pursuant to the merger, the surviving organization's
organizational documents; and
(5) if the surviving organization is not to be created
pursuant to the merger, any amendments to be made by the
merger to the surviving organization's organizational
documents.
(c) In connection with a merger, rights or securities
of or interests in a constituent organization may be exchanged
for or converted into cash, property, or rights or securities
of or interests in the surviving organization, or, in addition
to or in lieu thereof, may be exchanged for or converted into
cash, property, or rights or securities of or interests in
another organization or may be cancelled.
(d) In addition to the requirements of subsection (b),
a plan of merger may:
(1) provide that (i) a constituent organization or any
other party to the plan of merger that fails to perform its
obligations under the plan of merger in accordance with the
terms and conditions of the plan of merger, or that otherwise
fails to comply with the terms and conditions of the plan of
merger, in each case, required to be performed or complied
with prior to the time the merger becomes effective, or that
otherwise fails to consummate, or fails to cause the
consummation of, the merger (whether prior to a specified
date, upon satisfaction or, to the extent permitted by law,
waiver of all conditions to consummation set forth in the plan
of merger, or otherwise) shall be subject, in addition to any
other remedies available at law or in equity, to the penalties
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other remedies available at law or in equity, to the penalties
or consequences as are set forth in the plan of merger (which
penalties or consequences may include an obligation to pay to
the other party or parties to the plan of merger an amount
representing, or based on the loss of, any premium or other
economic entitlement the owners of the other party would be
entitled to receive pursuant to the terms of the plan of
merger if the merger were consummated in accordance with the
terms of the plan of merger) and (ii) if, pursuant to the
terms of the plan of merger, a constituent organization is
entitled to receive payment from another party to the plan of
merger of any amount representing a penalty or consequence (as
specified in clause (i) of this Section 10A-9A-10.06(d)(1),
the constituent organization shall be entitled to enforce the
other party's payment obligation and, upon receipt of any
payment, shall be entitled to retain the amount of the payment
so received;
(2) provide (i) for the appointment, at or after the
time at which the plan of merger is adopted by the owners of a
constituent organization in accordance with the requirements
of Section 10A-9A-10.07, of one or more persons (which may
include the surviving or resulting entity or any officer,
partner, manager, representative, or agent thereof) as
representative of the owners of a constituent organization,
including those whose ownership interests shall be cancelled,
converted, or exchanged in the merger, and for the delegation
to that person or persons of the sole and exclusive authority
to take action on behalf of the owners pursuant to the plan of
merger, including taking such actions as the representative
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merger, including taking such actions as the representative
determines to enforce (including by entering into settlements
with respect to) the rights of the owners under the plan of
merger, on the terms and subject to the conditions set forth
in the plan of merger, (ii) that any appointment pursuant to
clause (i) of this Section 10A-9A-10.06(d)(2) shall be
irrevocable and binding on all owners from and after the
adoption of the plan of merger by the requisite vote of the
partners pursuant to Section 10A-9A-10.07, and (iii) that any
provision adopted pursuant to this Section 10A-9A-10.06(d)(2)
may not be amended after the merger has become effective or
may be amended only with the consent or approval of persons
specified in the plan of merger; and
(3) contain any other provision not prohibited by law.
(e) At the time of the approval of the plan of merger
in accordance with Section 10A-9A-10.07, the plan of merger is
not required to contain or have attached thereto any
disclosure letter, disclosure schedules, or similar documents
or instruments contemplated by the plan of merger that modify,
supplement, qualify, or make exceptions to representations,
warranties, covenants, or conditions contained in the plan of
merger."
Section 8. Sections 10A-2A-3.05, 10A-2A-8.27,
10A-3A-3.05, and 10A-3A-8.26 are added to the Code of Alabama
1975, to read as follows:
§10A-2A-3.05. Independent legal significance.
Action validly taken pursuant to one provision of this
chapter shall not be deemed invalid solely because it is
identical or similar in substance to an action that could have
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identical or similar in substance to an action that could have
been taken pursuant to some other provision of this chapter
but fails to satisfy one or more requirements prescribed by
such other provision.
§10A-2A-8.27. Authorization of agreements and other
instruments.
(a) Whenever this chapter expressly requires the board
of directors to approve or take other action with respect to
any agreement, instrument, plan, or document, such agreement,
instrument, plan, or document may be approved by the board of
directors in final form or in substantially final form.
Substantially final form means that all of the material terms
are set forth in the agreement, instrument, plan, or document,
or are determinable through other information or materials
presented to or known by the board of directors, or are
determinable by a combination thereof. 
(b) If the board of directors shall have acted to
approve or take other action with respect to an agreement,
instrument, plan, or document that is expressly required by
this chapter to be approved by the board of directors, the
board of directors may, but is not required to, at any time
after providing the approval or taking such other action adopt
a resolution ratifying the agreement, instrument, plan, or
document, and the ratification shall be deemed to be effective
as of the time of the original approval or other action by the
board of directors and to satisfy any requirement under this
chapter that the board of directors approve or take other
action with respect to the agreement, instrument, plan, or
document in a specific manner or sequence.
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document in a specific manner or sequence.
§10A-3A-3.05. Independent legal significance.
Action validly taken pursuant to one provision of this
chapter shall not be deemed invalid solely because it is
identical or similar in substance to an action that could have
been taken pursuant to some other provision of this chapter
but fails to satisfy one or more requirements prescribed by
such other provision. 
§10A-3A-8.26. Authorization of agreements and other
instruments.
(a) Whenever this chapter expressly requires the board
of directors to approve or take other action with respect to
any agreement, instrument, plan, or document, such agreement,
instrument, plan, or document may be approved by the board of
directors in final form or in substantially final form.
Substantially final form means that all of the material terms
are set forth in the agreement, instrument, plan, or document,
or are determinable through other information or materials
presented to or known by the board of directors, or are
determinable by a combination thereof. 
(b) If the board of directors shall have acted to
approve or take other action with respect to an agreement,
instrument, plan, or document that is expressly required by
this chapter to be approved by the board of directors, the
board of directors may, but is not required to, at any time
after providing the approval or taking such other action adopt
a resolution ratifying the agreement, instrument, plan, or
document, and the ratification shall be deemed to be effective
as of the time of the original approval or other action by the
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as of the time of the original approval or other action by the
board of directors and to satisfy any requirement under this
chapter that the board of directors approve or take other
action with respect to the agreement, instrument, plan, or
document in a specific manner or sequence.
Section 9. The amendments to Sections 10A-1-8.02,
10A-2A-11.02, 10A-5A-10.05, 10A-8A-9.06, and 10A-9A-10.06 made
by this act shall apply to all contracts made by a
corporation, nonprofit corporation, limited liability company,
partnership (including a limited liability partnership), and
limited partnership (including a limited liability limited
partnership) and all agreements, instruments, or documents
approved by the board of directors, governing authorities,
members, managers, partners, or person or group of persons
having approval rights of those entities and all plans of
merger and plans of conversion entered into by a corporation,
nonprofit corporation, limited liability company, partnership
(including a limited liability partnership), and limited
partnership (including a limited liability limited
partnership), in each case whether or not the contracts,
agreements, instruments, documents, plans of merger, or plans
of conversion are made, approved, or entered into on or before
August 1, 2025, except that the amendments to Sections
10A-1-8.02, 10A-2A-11.02, 10A-5A-10.05, 10A-8A-9.06, and
10A-9A-10.06 shall not apply to or affect any civil action or
proceeding completed or pending on or before August 1, 2025.
Section 10. This act shall be effective on August 1,
2025.
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