SB178 Alabama 2019 Session

Updated Feb 24, 2026

Summary

Primary Sponsor: Rodger SmithermanSenator
Democrat
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: SB 178 makes technical corrections to Alabama business law by renaming the LLC statute, allowing a partnership to continue temporarily with one or no partners, and clarifying a partner's duty not to compete before dissolution, with retroactive effect to 2019.
What This Bill Does
It amends key sections to rename the Alabama Limited Liability Company Law as the 'Alabama Limited Liability Company Law of 2014.' It clarifies that a partnership can continue as an entity for a short period even if only one partner remains or there are no partners. It reinforces the duty of loyalty for partners, including not competing with the partnership before it dissolves, and it sets a retroactive effective date back to January 1, 2019.

Who It Affects
General partnerships and their partners: changes in the duty of loyalty, including the non-compete before dissolution, and the ability to maintain partnership status briefly with 1 or 0 partners.
Limited liability companies (LLCs) and their members or partners: updates to the naming of the LLC law and related definitions, affecting how the law is cited and applied.

Key Provisions
Amends Section 10A-5A-1.01 and related provisions to rename the applicable law as the 'Alabama Limited Liability Company Law of 2014.'
Adds/adjusts provisions (Sections 10A-8A-1.02 and 10A-8A-4.11) to allow a partnership to continue as an entity for a brief period with one partner or with no partners remaining.
Clarifies partner duties, including loyalty and not competing with the partnership before dissolution, under the partnership duties section.
Provides a retroactive effective date, 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