SB174 Alabama 2019 Session

Summary

Primary Sponsor

Sam GivhanSenator

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10A-30-2.05, 10A-30-2.06, 10A-30-2.09, 10A-30-2.12, 10A-30-2.13, am'd; Secs. 10A-2-1.01 to 10A-2-17.02, inclusive, repealed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

SB 174 would replace Alabama's old Business Corporation Law with a modern Chapter 2A, aligning it with the Model Business Corporation Act of 2016 and Delaware law to govern corporations and related entities.

What This Bill Does

It creates a new Chapter 2A to govern formation, governance, mergers, conversions, distributions, and dissolution of corporations and other eligible entities, replacing the old Chapter 2. It sets transitional rules allowing existing corporations to elect to be governed by Chapter 2A, with full transition by January 1, 2021, and it phases out the old Chapter 2 for new filings after 2019. It updates core areas such as stock rights, fiduciary duties, indemnification, appraisal rights, notices, meetings (including remote participation), and recordkeeping to reflect national standards.

Who It Affects

• Stockholders, directors, and officers of Alabama domestic and foreign corporations and other eligible entities (including nonprofits and professional corporations) who would be governed by the new Chapter 2A and whose rights, duties, and protections are updated.
• Filing officers, the Secretary of State, judge of probate, and the court system, which implement and oversee the new filing, notice, and dispute-resolution rules under Chapter 2A.

Key Provisions

• Establishes a new Alabama Business Corporation Law (Chapter 2A) to replace the prior Chapter 2 and align with the Model Business Corporation Act (2016) and Delaware laws.
• Expands and clarifies fiduciary duties, indemnification and advancement for expenses for directors and officers, includes new procedures for conflicts of interest, and clarifies liability and protections, including insurance and court-order remedies.

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