HB251 Alabama 2019 Session

Summary

Primary Sponsor

Bill Poole

Republican

Session

Regular Session 2019

Title

Corporations, name of Alabama Limited Liability Company Law revised, duty of partner not to compete before dissolution of partnership, clarified, Secs. 10A-5A-1.01, 10A-8A-1.01, 10A-8A-4.11 am'd.

Summary

HB 251 updates corporate, partnership, and LLC law in Alabama to clarify records access, correct the LLC law name, allow brief continuation of partnerships with few or no partners, and strengthen the duty not to compete before dissolution, with retroactive effect to 2019.

What This Bill Does

It clarifies which rules govern governing-person access to a company’s books and records and outlines how access and information must be provided, including potential court enforcement. It makes technical corrections to the name of the Alabama Limited Liability Company Law of 2014. It strengthens partnership duties by codifying the duty of loyalty not to compete with the partnership before dissolution, and it clarifies that a partnership may continue as an entity for a short period with one or no partners. It applies retroactively to January 1, 2019.

Who It Affects

• Governing persons (such as directors and officers) of corporations and similar entities, who gain clarified rights to inspect, copy, and demand information from the entity's books and records.
• Partnerships and their partners (including general partnerships) and owners/members of Alabama LLCs, who are affected by the non-competition duty before dissolution, potential continuation of a partnership with limited partner presence, and the revised LLC law naming and retroactive date.

Key Provisions

• Clarifies governing-person access to books and records, including inspection, copying, and on-demand information, with potential court enforcement and reasonable copying charges.
• Specifies the governing-law framework for inspection rights, aligning existing and proposed law and allowing court orders and attorney-fee awards in access disputes.
• Corrects the naming/citation for the Alabama Limited Liability Company Law of 2014 (10A-5A-1.01) to reflect proper terminology.
• Adds/clarifies partnership duties of loyalty and care, including a partner's duty not to compete with the partnership before dissolution.
• Allows a partnership to continue as an entity for a brief period with one partner or no partners under the law.
• Sets retroactive effective date of January 1, 2019.

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

Subjects

Corporations