SB133 Alabama 2018 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2018

Title

Alabama Partnership Act, repealed and replaced, procedures for formation and dissolution, conforming changes, Secs. 10A-1-5.10, 10A-1-9.01 added; Secs. 10A-1-5.07, 10A-1-7.33, 10A-8-1.01 to 10A-8-11.04, inclusive, repealed; numerous sections of Title 10A, am'd.

Summary

SB133 overhauls Alabama's Partnership Act by creating a new unified Alabama Partnership Law that governs formation, governance, and dissolution for partnerships—including LLPs and foreign partnerships—in a single framework.

What This Bill Does

It repeals the old partnership provisions and replaces them with a comprehensive framework called the Alabama Partnership Law (Chapter 10A-8A), applicable to domestic and foreign partnerships, including limited liability partnerships and limited liability limited partnerships. It sets out how partnerships are formed (via statements of partnership or not-for-profit partnership), how they are governed (primarily by a partnership agreement and governing statute), and how they dissolve and wind up. It also introduces rules for conversions and mergers, special provisions for professional services, a two-agency filing system, and transition rules that take effect January 1, 2019.

Who It Affects

• Partners and members of domestic and foreign partnerships (including LLPs, LPs, and foreign partnerships) who will be governed by new formation, governance, dissolution, and wind-up rules, as well as by new liability and fiduciary duties.
• Creditors, transferees, and other third parties dealing with partnerships (including those involved in enforcing claims, service of process, or acknowledging authority to bind the partnership) who interact with the new filing system, authority statements, and dissolution/merger provisions.

Key Provisions

• Creates a new unified Alabama Partnership Law as Chapter 10A-8A (Alabama Partnership Law) to replace the old partnership provisions and repeals the prior 10A-1-7.33 and Chapter 8; establishes Articles 1–11 covering general provisions through transitions, conversions, mergers, and LLPs.
• Extends formation, governance, and dissolution procedures to both domestic and foreign partnerships, including LLPs and foreign LLPs operating in Alabama; internal affairs for non-LLP partnerships follow governing statutes, while LLP internal affairs are governed by this new framework.
• Introduces a two-agency filing system for filings: certain documents with the judge of probate and others with the Secretary of State; lists filing fees and creates the Secretary of State Entity Fund to handle such fees.
• Imposes name and reservation rules for partnerships and other entities, requiring distinguishable names, approved reservations, and specific naming conventions (e.g., GP, LLP, LLLP, etc.).
• Defines partner duties and rights (loyalty, care, equal profit distributions, access to information, and the ability to enforce the partnership agreement) and allows certain restrictions in the partnership agreement while preserving the implied covenant of good faith and fair dealing.
• Outlines dissolution, wind-up, and distribution rules, including triggers for dissolution, order of distributing assets to creditors, and buyout procedures for dissociated partners with valuation and potential court involvement.
• Provides rules for mergers and conversions between partnerships and other entities, including how assets and liabilities transfer, how interests convert, and how filings and effective dates are determined.
• Adds provisions for limited liability partnerships performing professional services, including specific liability rules for professionals and requirements to ensure professional licensing compliance.
• Sets transition rules effective January 1, 2019, allowing existing partnerships and statuses under prior law to transition to the new framework; preserves certain pre-existing rights and obligations during the transition.

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