HB202 Alabama 2016 Session

Summary

Primary Sponsor

Bill Poole

Republican

Session

Regular Session 2016

Title

Business entities, partnerships and limited liability companies, procedures for formation and operation of harmonized, merger, dissolution, Secs. 10A-1-1.03, 10A-1-1.06, 10A-1-1.08, 10A-1-4.26, 10A-1-6.02, 10A-1.6.13, 10A-1-6.25, 10A-1-7.07, 10A-5A-1.10, 10A-5A-4.01, 10A-5A-5.04, 10A-5A-7.01, 10A-5A-7.02, 10A-5A-10.03, 10A-5A-10.04, 10A-5A-10.07, 10A-5A-10.08 am'd.; Secs. 10A-9-1.01 to 10A-9-12.08 inclusive, repealed; Secs. 10A-9A-1.01 to 10A-9A-11.07, inclusive, added

Summary

HB202 updates Alabama's Limited Partnership law to harmonize it with LLC law, creating a unified framework for formation, operation, conversion, merger, and dissolution of limited partnerships.

What This Bill Does

It creates Chapter 9A, the Alabama Limited Partnership Law, and repeals the old LP statutes, moving to a modern, harmonized framework. It aligns formation, filings, notices, and dissolution processes with LLC rules, reducing differences between limited partnerships and other business entities. It maintains certain default and nonwaivable duties (such as the implied covenant of good faith) and expands partners' rights to information, while detailing penalties for noncompliance. It introduces new provisions for converting and merging LPs with other entities, including how interests are exchanged and how liabilities survive after a conversion or merger.

Who It Affects

• Limited partnerships (domestic and foreign) and their general and limited partners, who would experience changes in formation, governance, liability, distributions, dissociation, dissolution, and conversion/merger rules.
• Creditors, transferees, personal representatives of deceased partners, and filing/enforcement parties (Secretary of State and judges of probate) who gain clearer rules on notices, filings, charging orders, dissolution claims, and how claims are paid.

Key Provisions

• Creates Chapter 9A: Alabama Limited Partnership Law, harmonizing LP law with LLC law and repealing Sections 10A-9-1.01 to 10A-9-12.08; adds Articles 1-11.
• Defines key terms (general partner, limited partner, transferable interest, partnership agreement) and preserves nonwaivable duties like the implied covenant of good faith and fair dealing.
• Sets formation, filing, and amendment rules for limited partnerships, including required information on the certificate of formation and signing/filing requirements, with some filings required to be simultaneous with conversions.
• Delivers governance and liability rules for general and limited partners, limits personal liability for limited partners, and provides distribution rules including penalties for improper distributions.
• Outlines dissolution, winding up, and claim handling, including known and unknown claims and the allocation of assets and liabilities on dissolution.
• Creates rules for conversions and mergers with other entities, including plan requirements, how interests are exchanged, and liability continuation; includes transitional rules and effective dates.
• Specifies rights of partners and dissociated partners to information, subject to reasonable restrictions and confidentiality.
• Establishes creditors’ remedies via charging orders and outlines enforcement against a partner's transferable interest.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Business Entities