HB250 Alabama 2019 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Bill Poole
Republican
Session: Regular Session 2019
Title: Business entities, revising the Alabama Business Corporation Law, to reflect national standards set by the Model Business Corporation Act, Secs. 10A-2A-1.01 to 10A-2A-17.06, inclusive added; Secs. 10A-1-1.02, 10A-1-1.03, 10A-1-1.08, 10A-1-1.12, 10A-1-3.05, 10A-1-3.06, 10A-1-3.32, 10A-1-3.42, 10A-1-4.01, 10A-1-4.02, 10A-1-4.04, 10A-1-4.06, 10A-1-4.11, 10A-1-4.13, 10A-1-4.15, 10A-1-4.21, 10A-1-4.23, 10A-1-4.24, 10A-1-4.25, 10A-1-4.26, 10A-1-4.31, 10A-1-5.01, 10A-1-5.08, 10A-1-6.01, 10A-1-6.02, 10A-1-7.01, 10A-1-7.04, 10A-1-7.11, 10A-1-7.21, 10A-1-7.31, 10A-1-8.01, 10A-1-8.02, 10A-1-8.04, 10A-1-9.01, 10A-4-2.02, 10A-4-4.01, 10A-4-4.02, 10A-4-5.01, 10A-4-5.04, 10A-5A-10.01, 10A-5A-10.03, 10A-5A-10.04, 10A-5A-10.05, 10A-5A-10.07, 10A-5A-10.08, 10A-8A-9.02, 10A-8A-9.04, 10A-8A-9.05, 10A-8A-9.06, 10A-8A-9.08, 10A-8A-9.09, 10A-9A-10.02, 10A-9A-10.04, 10A-9A-10.05, 10A-9A-10.06, 10A-9A-10.08, 10A-9A-10.09, 10A-10-1.09, 10A-10-1.12, 10A-10-1.15, 10A-10-1.16, 10A-11-1.01, 10A-11-1.03, 10A-11-1.04, 10A-11-1.06, 10A-11-1.12, 10A-30-2.01, 10A-30-2.03, 10A-30-2.04, 10A-30-2.05, 10A-30-2.06, 10A-30-2.09, 10A-30-2.12, 10A-30-2.13, am'd; Secs. 10A-2-1.01 to 10A-2-17.02, inclusive, repealed
Summary: HB 250 would replace Alabama’s old Chapter 2 with a new Chapter 2A implementing the Model Business Corporation Act of 2016, modernizing and harmonizing the state's corporate law with national standards and repealing the old framework.
What This Bill Does
It creates Chapter 2A in Title 10A to govern business entities, aligning Alabama law with the Model Act of 2016 and Delaware law, and it repeals the old Chapter 2 (Chapter 2 of Title 10A). The bill updates formation, governance, stock and distributions, fiduciary duties, mergers, conversions, and dissolution, including expanded notice, voting, and appraisal processes. It also prescribes conforming changes to related statutes and broadening protections for directors and officers, as well as modernizing communications such as electronic notices. The act becomes effective in 2020, with the old Chapter 2 repealed on January 1, 2021.

Who It Affects
Domestic and foreign corporations, nonprofit corporations, professional corporations, and other entities governed by Title 10A-2A (including banks and utilities) that will be subject to the new Model Act-based framework.
Stockholders, directors, and officers of these entities, who gain clarified rights and duties (including enhanced indemnification, notice, voting, and fiduciary standards) and new remedies such as appraisal rights for certain corporate actions.

Key Provisions
Creation of a new Chapter 2A (10A-2A) to implement the Model Business Corporation Act of 2016 and to replace the existing Chapter 2; broad conforming changes to related statutes and repeal of the old Chapter 2 (10A-2-1.01 to 10A-2-17.02).
Expanded governance and fiduciary framework, including enhanced director and officer standards, indemnification and advancement of expenses, and insurance provisions for directors and officers; clarified duties and reliance rules for fiduciaries.
Modernized stock, voting, and notice rules (including remote participation, electronic notices, and unified processes for voting groups, quorum, and corporate actions), as well as detailed provisions for stock issuance, distributions, preemptive rights, and transfer restrictions.
Comprehensive rules for reorganizations, mergers, stock exchanges, and conversions across various entity types (including corporations, partnerships, LLCs, and real estate investment trusts), with formal procedures, plan requirements, and appraisal/dissent rights where applicable.

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 and Commerce