SB206 Alabama 2020 Session

Summary

Primary Sponsor

Sam GivhanSenator

Republican

Session

Regular Session 2020

Title

Business and Nonprofit Entities Code, substantially revised to allow corporations to elect to become benefit corporations, update definitions, allow for electronic filing, and provide standards for filing instruments, numerous sections of Title 10A added, amended, and renumbered

Summary

SB206 would let Alabama corporations elect to become benefit corporations and create a comprehensive electronic filing and governance framework for business entities.

What This Bill Does

It adds a new benefit corporation status with definitions, requires directors to act in a responsible and sustainable way, and mandates annual benefit reports and standing for certain stockholders to sue for breaches. It also governs how public benefits must be pursued and measured, and sets voting thresholds for corporations to elect or change this status or merge. It updates the Alabama Business and Nonprofit Entities Code to recognize nonprofit officers and related matters. It also creates a comprehensive electronic filing system for all entity filings, updates filing instrument standards, and allows the Secretary of State to reject filings for nonpayment; includes changes like electronic certificates of existence and electronic name reservations.

Who It Affects

• Group 1: Domestic or foreign corporations doing business in Alabama; they could elect benefit corporation status, adopt public-benefit goals, and be required to file annual benefit reports; governance duties apply.
• Group 2: Shareholders (especially large ones) and communities/environment; they gain standing to sue for breaches of the benefit duties, and the public benefits framework can affect employees, customers, and local communities.

Key Provisions

• Establishes a new article (benefit corporations) with definitions (benefit corporation, public benefit, responsible and sustainable manner) and duties for directors; requires annual benefit reports and provides stockholder standing to sue for breaches.
• Expands electronic filing and related filing instrument standards (electronic filing system, electronic signatures/transmissions, certificates of existence, electronic name reservation, and related updates) and clarifies cross-references and officers; enables faster formation and management of entities.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Business and Nonprofit Entities Code